Australia’s $911,000,000,000 Debt

[Value Collector]

Certainly agree that the wealth is not normally distributed, or bell-curve distributed where the middle class or the average income earner holds the largest share of nation's wealth.

However, my point is that so much wealth came in in terms of commodity sales, mining royalties etc over the last few decades, that it seems there is not a lot to show for it. As @divs4ever mentioned what we have is old infrastructure most of which was built prior to the biggest mining boom and in most cases in need of repairs or upgrades. And a big pile of debt that will burden generations to come.

In the case of USA, it's pretty much known by the financially literate folks that the debt can never be paid off. Each time they raise the debt ceiling (a term you folks may have heard commonly as kicking the can down the road). Therefore I agree with @tech/a that these debt based systems are an illusion or myth. Therefore, I also suggest that one does not need to suffocate the already enslaved population with excessive taxes as that capital raised each year will be insufficient to extinguish the debt and as time goes by may not even be sufficient to service the interest payments on the ever ballooning debt. So my honest opinion is to reduce the tax burden on the ordinary citizens especially given thet many will be pressured to homelessness levels with increasing interest rates of late. I am doing OK but I speak for the people of the country.

I think there is a golden opportunity for countries like Australia to re-design the monetary system to bring long term stability and fairness to it's citizens. When I say long term, I am talking multi-generational or into thousands of years. I am happy to design and help implement such a system for any forward-thinking nation and available to migrate to implement the project and to become a proud citizen of such a nation. History tells us that no debt-based currency has ever survived in the past, so it'll have the same fate for the current one unfortunately.

Here’s the problem though, you can’t reduce the debt and reduce taxation at the same time without reducing government spending.

Think of the 3 factors as being linked eg

1. Taxation
2. Debt growth / reduction
3. Government spending

Most people want government spending to rise, eg pensioners want larger pensions, people want more free healthcare, more roads, more support during bushfires or covid type situations, more free education etc etc

But you can’t raise spending without increasing taxation unless you raise the debt.

As I pointed out, I don’t really have an issue with some government debt, I think it’s actually immoral to over tax any generation just to try and bring the debt to zero for the next generation when they will inherit a mighty hand of assets.

 

[qldfrog]

Certainly agree that the wealth is not normally distributed, or bell-curve distributed where the middle class or the average income earner holds the largest share of nation's wealth.

However, my point is that so much wealth came in in terms of commodity sales, mining royalties etc over the last few decades, that it seems there is not a lot to show for it. As @divs4ever mentioned what we have is old infrastructure most of which was built prior to the biggest mining boom and in most cases in need of repairs or upgrades. And a big pile of debt that will burden generations to come.

In the case of USA, it's pretty much known by the financially literate folks that the debt can never be paid off. Each time they raise the debt ceiling (a term you folks may have heard commonly as kicking the can down the road). Therefore I agree with @tech/a that these debt based systems are an illusion or myth. Therefore, I also suggest that one does not need to suffocate the already enslaved population with excessive taxes as that capital raised each year will be insufficient to extinguish the debt and as time goes by may not even be sufficient to service the interest payments on the ever ballooning debt. So my honest opinion is to reduce the tax burden on the ordinary citizens especially given thet many will be pressured to homelessness levels with increasing interest rates of late. I am doing OK but I speak for the people of the country.

I think there is a golden opportunity for countries like Australia to re-design the monetary system to bring long term stability and fairness to it's citizens. When I say long term, I am talking multi-generational or into thousands of years. I am happy to design and help implement such a system for any forward-thinking nation and available to migrate to implement the project and to become a proud citizen of such a nation. History tells us that no debt-based currency has ever survived in the past, so it'll have the same fate for the current one unfortunately.

I would happily join your team.
One of the key reason of my early retirement is the fact I see no point building up a new business in the current context and country.
To pay taxes and pay the interest bills on 400 billions of loans for nuclear sibtking tin boxes. Go and get fxxk :-(

 

[bsnews]

I would happily join your team.
One of the key reason of my early retirement is the fact I see no point building up a new business in the current context and country.
To pay taxes and pay the interest bills on 400 billions of loans for nuclear sibtking tin boxes. Go and get fxxk :-(

When a business I own makes half a million in profit and I have claimed anything and everything as a tax deduction. I am more then happy to pay the tax on what profit is left. Yes please!

 

[Value Collector]

When a business I own makes half a million in profit and I have claimed anything and everything as a tax deduction. I am more then happy to pay the tax on what profit is left. Yes please!

Yeah, I am not sure want QLDFrog is on about, taxes haven’t gone up, Tax is the same or less than it’s been for the last 20 years.

I admit that the 47% tax bracket is a bit harsh, but not all your income hits that, and you structure things to keep a decent amount in the 30% area.

 

[moXJO]

Too much debt can lead to a loss of confidence in the country’s dollar.
US lucky enough to have reserve status.

 

[divs4ever]

Too much debt can lead to a loss of confidence in the country’s dollar.
US lucky enough to have reserve status.

the reserve status , so far .

will some nations do trade account balances ( settlements ) by shipping physical gold ( say yearly ) ( some African nations , maybe South American nations as well , could benefit from that )

since the US has weaponized the currency , i see less international trade done in US dollars

 

[qldfrog]

When a business I own makes half a million in profit and I have claimed anything and everything as a tax deduction. I am more then happy to pay the tax on what profit is left. Yes please!

Good on you, every situation is different..I somehow doubt that profit is on your first year ... I have no regrets on starting previous businesses but have no desire left to start again from zero for what: a minimum of 3 years or so before earning a decent income..
Better use of my life and what is left of it, but thanks for your contribution.
Btw, I say thank you, tell me when the ATO or even the government will do same ;-)
Would be very different if I was 20 or even 40 of course, or in a different lower taxed country , or homeless etc..
You keep the GDP ticking
Done my part in the past

 

[aus_trader]

@qldfrog you are spot on. I hate to complain and make excuses for myself, but a lot have to be changed to make this nation great or great again.

It's very difficult as a business owner to operate in the country, especially if you are a sole trader or a small business. Even fellow business owners either running small businesses or operating as sole traders usually bring this up when we have a conversation. It's how fat and obese the nation has become over the years with the ever-increasing red tape and bureaucratic flab.

Retiring business owners tell me there was a golden time you could hire people and pay them a decent weekly wage or for the hours performed based on an hourly rate and that was it, happy days. These boomers tell me the system was still fair even after the introduction of compulsory super back in the days of Keating government, it was still a great business environment to operate in. Basically, if you were an early school leaver with near illiterate math skills who started a business, it wasn't hard to work out a 10% or a 9.5% super contribution on top of their hourly pay to pay your employees when your business grew and had to hire people. So if a person did 10 hours at $35/hr then I would have to pay $350 to his pocket and $35 to his super fund, easy peacey. No F'g headaches !

Since then, what happened ? Every govt or every other one that comes in and slathers on another layer of lard. So now we have to deal with sick leave entitlements, annual leave entitlements, long service leave entitlements, termination pay entitlements, workers compensation, Goods and Services Tax, withholding tax obligations for the employees, employee compulsory super contributions as well as PAYG tax complications etc. Enough to hire a whole payroll department, accountant and a bookkeeper. There'll be nothing left for the one running the business after paying all the entitlements and all the departments with more employees to deal with these obligations, which is why I have remained as a one-man-show sole trader, despite having more than enough work for putting on multiple employees. System might work for larger companies as they have their departments from payroll to HR to compliance etc.

 

[qldfrog]

@qldfrog you are spot on. I hate to complain and make excuses for myself, but a lot have to be changed to make this nation great or great again.

It's very difficult as a business owner to operate in the country, especially if you are a sole trader or a small business. Even fellow business owners either running small businesses or operating as sole traders usually bring this up when we have a conversation. It's how fat and obese the nation has become over the years with the ever-increasing red tape and bureaucratic flab.

Retiring business owners tell me there was a golden time you could hire people and pay them a decent weekly wage or for the hours performed based on an hourly rate and that was it, happy days. These boomers tell me the system was still fair even after the introduction of compulsory super back in the days of Keating government, it was still a great business environment to operate in. Basically, if you were an early school leaver with near illiterate math skills who started a business, it wasn't hard to work out a 10% or a 9.5% super contribution on top of their hourly pay to pay your employees when your business grew and had to hire people. So if a person did 10 hours at $35/hr then I would have to pay $350 to his pocket and $35 to his super fund, easy peacey. No F'g headaches !

Since then, what happened ? Every govt or every other one that comes in and slathers on another layer of lard. So now we have to deal with sick leave entitlements, annual leave entitlements, long service leave entitlements, termination pay entitlements, workers compensation, Goods and Services Tax, withholding tax obligations for the employees, employee compulsory super contributions as well as PAYG tax complications etc. Enough to hire a whole payroll department, accountant and a bookkeeper. There'll be nothing left for the one running the business after paying all the entitlements and all the departments with more employees to deal with these obligations, which is why I have remained as a one-man-show sole trader, despite having more than enough work for putting on multiple employees. System might work for larger companies as they have their departments from payroll to HR to compliance etc.

I only had one go to take employees/sub contractor.as luck was, the customer did not pay his invoice for a year and I promised myself never again.it is one thing not being paid, another to pay someone with your own cash

 

[UMike]

@qldfrog you are spot on. I hate to complain and make excuses for myself, but a lot have to be changed to make this nation great or great again.

It's very difficult as a business owner to operate in the country, especially if you are a sole trader or a small business. Even fellow business owners either running small businesses or operating as sole traders usually bring this up when we have a conversation. It's how fat and obese the nation has become over the years with the ever-increasing red tape and bureaucratic flab.

Retiring business owners tell me there was a golden time you could hire people and pay them a decent weekly wage or for the hours performed based on an hourly rate and that was it, happy days. These boomers tell me the system was still fair even after the introduction of compulsory super back in the days of Keating government, it was still a great business environment to operate in. Basically, if you were an early school leaver with near illiterate math skills who started a business, it wasn't hard to work out a 10% or a 9.5% super contribution on top of their hourly pay to pay your employees when your business grew and had to hire people. So if a person did 10 hours at $35/hr then I would have to pay $350 to his pocket and $35 to his super fund, easy peacey. No F'g headaches !

Since then, what happened ? Every govt or every other one that comes in and slathers on another layer of lard. So now we have to deal with sick leave entitlements, annual leave entitlements, long service leave entitlements, termination pay entitlements, workers compensation, Goods and Services Tax, withholding tax obligations for the employees, employee compulsory super contributions as well as PAYG tax complications etc. Enough to hire a whole payroll department, accountant and a bookkeeper. There'll be nothing left for the one running the business after paying all the entitlements and all the departments with more employees to deal with these obligations, which is why I have remained as a one-man-show sole trader, despite having more than enough work for putting on multiple employees. System might work for larger companies as they have their departments from payroll to HR to compliance etc.

Try using Xero. It works most of this stuff out for you. inc Tax compliance ... ect.

I found red tape such as (excessive) Licenses, Work Cover, Council/local Govt, issues Registrations and the Like much more dificult to comply with.

 

[tech/a]

A little more to ponder.

I agree with some of the Govt debt issues. If the Govy buys ---say ---fighter planes ---then we owe the USA x Billions.
We have a debt that needs to be paid to another party. This deficit can only be written off by the Creditor.

However in cases where money is printed by the Govt for say COVID related Public and Business support---then the debt is owed to the Govt
and they Can write it off.
This happens all the time --- the one major issue is that larger amounts of money circulating in an economy can cause inflation.

The point is that a great deal of deficit is an illusion.

 

[Value Collector]

A little more to ponder.

I agree with some of the Govt debt issues. If the Govy buys ---say ---fighter planes ---then we owe the USA x Billions.
We have a debt that needs to be paid to another party. This deficit can only be written off by the Creditor.

However in cases where money is printed by the Govt for say COVID related Public and Business support---then the debt is owed to the Govt
and they Can write it off.
This happens all the time --- the one major issue is that larger amounts of money circulating in an economy can cause inflation.

The point is that a great deal of deficit is an illusion.

The government would sell bonds to pay for those fighter jets, but if you believe the government is just printing money and spending it, why wouldn’t they just print money to pay for the fighter jets? Any australia dollars they print can easily be converted to US dollars.

As I said before, if you believe the government can just print money and doesn’t need to borrow it, why do they sell bonds to the public in the first place? and why do they have taxation?

I think you are confusing the reserve bank with the government. The government does not decide how much money gets printed the reserve bank does, and if the government wants more money than they receive in taxes they have to sell bonds, which the reserve bank and other investors may or may not want to buy.

 

[divs4ever]

The government would sell bonds to pay for those fighter jets, but if you believe the government is just printing money and spending it, why wouldn’t they just print money to pay for the fighter jets? Any australia dollars they print can easily be converted to US dollars.

As I said before, if you believe the government can just print money and doesn’t need to borrow it, why do they sell bonds to the public in the first place? and why do they have taxation?

I think you are confusing the reserve bank with the government. The government does not decide how much money gets printed the reserve bank does, and if the government wants more money than they receive in taxes they have to sell bonds, which the reserve bank and other investors may or may not want to buy.

the problem is the exchange rate , Zimbabwe can print money as well , but very few people want to handle the currency of Zimbabwe ( they would prefer their gold or platinum )

if Australia prints excessive dollars , trade will happen in iron ore , wheat , gold , and coal

 

[moXJO]

The point is that a great deal of deficit is an illusion.

Until you go Greek.
A lot of countries thought the same thing. Eventually it implodes. Big repercussions when there is loss of faith in a currency.

 

[divs4ever]

Big repercussions when there is loss of faith in a currency.

yep ! , that is a biggie ( and it has happened before , so there are some reference points )

but what happens this time if several major currencies suffer a crisis of faith in the same short time period ( say the UK , EU and Switzerland , with or without Japan )

 

[Gringotts Bank]

Vic has a lot of major infrastructure projects underway. Drive past any of them at any time of day or night and all you'll see is workers standing around, talking or looking at their phones. No activity at all. And the idiots in government wonder why they all run billions over budget.

 

[Value Collector]

the problem is the exchange rate , Zimbabwe can print money as well

The Original poster that I was replying to doesn't seem to see that as a problem.

That is of course my point though, the government can not create money, only the reserve bank can. When the reserve bank creates money it does so in limited amounts to try and prevent inflation going out of control, and it doesn't just gift that created money to the government it loans it in the form of bond purchases.

Hence the government can not just print money to get rid of deficits, it must either raise more taxes or spend less money.

 

[divs4ever]

The Original poster that I was replying to doesn't seem to see that as a problem.

That is of course my point though, the government can not create money, only the reserve bank can. When the reserve bank creates money it does so in limited amounts to try and prevent inflation going out of control, and it doesn't just gift that created money to the government it loans it in the form of bond purchases.

Hence the government can not just print money to get rid of deficits, it must either raise more taxes or spend less money.

it is never a problem ( printing ) until it is

very much like the easy credit era we are currently emerging from for the ordinary folks

BNPL , higher limits on credit facilities , etc etc. ,

now i am not sure what the Australian Reserve Bank is doing currently but the US Fed is the (Treasury and mortgage-backed ) bond buyer of last resort , so bond prices ( in the market ) don't go searching for zero

i note in the US the results of Treasury Bond auctions aren't as easily available as previously , now maybe that is because the data is boring to many , and maybe because the results are uninspiring , as international buyers focus on issues at home , i assume China is calmly turning matured US bonds into gold ( bullion ) rather than selling on market in quantity or reinvesting in newer issuance.

 

[farmerge]

@qldfrog you are spot on. I hate to complain and make excuses for myself, but a lot have to be changed to make this nation great or great again.

It's very difficult as a business owner to operate in the country, especially if you are a sole trader or a small business. Even fellow business owners either running small businesses or operating as sole traders usually bring this up when we have a conversation. It's how fat and obese the nation has become over the years with the ever-increasing red tape and bureaucratic flab.

Retiring business owners tell me there was a golden time you could hire people and pay them a decent weekly wage or for the hours performed based on an hourly rate and that was it, happy days. These boomers tell me the system was still fair even after the introduction of compulsory super back in the days of Keating government, it was still a great business environment to operate in. Basically, if you were an early school leaver with near illiterate math skills who started a business, it wasn't hard to work out a 10% or a 9.5% super contribution on top of their hourly pay to pay your employees when your business grew and had to hire people. So if a person did 10 hours at $35/hr then I would have to pay $350 to his pocket and $35 to his super fund, easy peacey. No F'g headaches !

Since then, what happened ? Every govt or every other one that comes in and slathers on another layer of lard. So now we have to deal with sick leave entitlements, annual leave entitlements, long service leave entitlements, termination pay entitlements, workers compensation, Goods and Services Tax, withholding tax obligations for the employees, employee compulsory super contributions as well as PAYG tax complications etc. Enough to hire a whole payroll department, accountant and a bookkeeper. There'll be nothing left for the one running the business after paying all the entitlements and all the departments with more employees to deal with these obligations, which is why I have remained as a one-man-show sole trader, despite having more than enough work for putting on multiple employees. System might work for larger companies as they have their departments from payroll to HR to compliance etc.

Long agp Aus I realised that just She and Me were the way to be in our contracting business. I have employed people in the past, but it was never really successful. Late starting, no shows don't feel too flash today and so the list went on.
So what I make in a week is entirely ours without the associated worry of where the hired hand might be.

 

[divs4ever]

Late starting, no shows don't feel too flash today and so the list went on.

including tools/gear lost , damaged, forgotten , some are almost like children being packed off to kindergarten

and THEN once some action starts you have to triple-check everything ( although that might happen at your leisure .. call it a tool rescue run ) i wasn't a 'boss ' as such more like a night watchman ( and late-night jobs ) so better to find stuff in the daylight , than bump into it .