Our pollies did not even bother to get insured in the first place. If they cannot spend the money to get votes, they won't spend it at all unless they have no option at all.
Royal Australian Navy Discussions and Updates
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t68
Well-Known Member
In local dollar terms New Zealand is running a $5.5B surplus and has had surpluses for since FY15 and GDP debt is now under 20% of GDP. Australia is running an $18.2B deficit and is in its 12th year of deficits with GDP debt up to $42.5%.
NZ has a $305B GDP yet we only spend $2.6B (nett) on the NZDF defence which is only 0.87% of GDP. Even with the $20B top up over 15 years for CapEx. We will still be spending under 1.0% of GDP.
So thanks and Merry Christmas the Aussie taxpayer. You are doing a great job of keeping the wider region safe so we don't have to bother and of course help us feel morally cleansed and spend more time virtue signalling from our high snowy mountains of sanctimony.
Thanks Joe Black for the lovely offer to gift us some free Hunters Class Frigates (I am assuming you are an Aussie taxpayer). We need more generous Aussie taxpayers like you because as you can see by the numbers above we are really really poor, like live in shoe box in middle of road poor, cannot afford to spend tuppence on defence. Special thanks to the gullible Aussie politicians. Thank god you guys cannot read a balance sheet thus have not being able to workout what really going on for the last couple of decades.
Well apparently we are getting a surplus next year, just in time for a change of government
so that surplus will last about 6mths
'We really are close': Budget predicted to return to surplus next financial year
The NZ budget management has been enviable since Auntie departed Wellington so despite some grumbling by some your pollies need to be thanked.In local dollar terms New Zealand is running a $5.5B surplus and has had surpluses for since FY15 and GDP debt is now under 20% of GDP. Australia is running an $18.2B deficit and is in its 12th year of deficits with GDP debt up to $42.5%.
NZ has a $305B GDP yet we only spend $2.6B (nett) on the NZDF defence which is only 0.87% of GDP. Even with the $20B top up over 15 years for CapEx. We will still be spending under 1.0% of GDP.
So thanks and Merry Christmas the Aussie taxpayer. You are doing a great job of keeping the wider region safe so we don't have to bother and of course help us feel morally cleansed and spend more time virtue signalling from our high snowy mountains of sanctimony.
Thanks Joe Black for the lovely offer to gift us some free Hunters Class Frigates (I am assuming you are an Aussie taxpayer). We need more generous Aussie taxpayers like you because as you can see by the numbers above we are really really poor, like live in shoe box in middle of road poor, cannot afford to spend tuppence on defence. Special thanks to the gullible Aussie politicians. Thank god you guys cannot read a balance sheet thus have not being able to workout what really going on for the last couple of decades.
We in Oz are too dumb to see the benefits of a universal 15% GST with no exemptions and that has surely served you well.
Here we have just about returned a balanced budget and could start to pay down debt but that may all change next year.
In the meantime I hope we can cooperate closely and provide meaningful contributions in the Pacific and balance the insidious creep of Chinese influence, that will require some extra funds for all our taxpayers.
John Fedup
The Bunker Group
Canada has a 5% GST and several provinces has opted to combine their provincial sales tax with the GST to have a harmonized tax (HST). HST then ranges from 12-15%. Needless to say our pollies squander this revenue stream on all sorts of pork unrelated to defence.
Most reports have Australia's net government debt at about 19% of GDP which is pretty low by global standards.
A huge difference though, is that Australia's domestic defence industries make spending 2% of GDP on security affordable and sustainable, as most expenditure will return in the form of tax receipts. That those industries also provide a political incentive to spend at those levels, is another incentive.
Without reasonably robust and capable local industries supported by local builds, through life sustainment would be impacted though. Even projects like the ANZAC AMCAP would need to be completed by overseas yards, like the double hulling of Success a few years ago.
Takao
The Bunker Group
Only if you look at it from a single, narrow angle.
Defence industry in Australia gives options. Mobilisation, scaling, flexibility, rapid modernisation - all of those are more possible with a factory in Australia. Take a soap box of mine - ammunition. At the moment I need a ship to come from Europe or the States just to bring all ammo bar 5.56, 7.62 and 155mm. So for me to stock enough AGM-114 (as an example), I need either a big warehouse that is full (expensive, runs out of life in 10 years, needs guards / facilities / etc) or constant (and guaranteed) sea lines of communication.
Or, I can stockpile the fancy electronics (no life, small) and build the EO / body in Australia. Now if I need a dozen / year I can just run a batch every 24 - 36 months. And if I need hundreds because of a conflict, I can surge - all in Australia. No multiply that across all our ammunition fleets. Sure my ammo may cost a little extra per round in peacetime, but when I need it (and in numbers that are mind-boggling to most of Defence, let alone the rest of the country) I have a much better chance of getting it. And, overall, I can do it for cheaper. Now take that across all our fleets. We still need key parts stockpiled, but it's less.
Now take another approach. As @RDB states, upgrades are easier. ANZACs are known by Australian industry, so the upgrades were easier. The same goes for all of our fleets (note this does not prevent project screw-up's a'la M113AS4). We build stuff in Australia means that we know the fleet, the platforms and the sub-systems. That enables us to spiral upgrade better. It also means we may be able to expand our economy. Australia becomes a hub for the fastest grown militaries in the region. We become the preferred security partner as per the DWP16. Indonesia, Fiji, Malaysia, Singapore, Thailand, PNG - all using materiel made in (and maintained) in Australia.
All of that - it's worth a few extra bucks.
Jack Wyatt
Member
Making multinationals pay their fair share of tax and tackling superannuation loopholes for millionaires are far fairer way of raising revenue than increasing the GST to 15% and increasing the cost of everything for everyone.
As a related issue, under this Government we have witnessed net debt roughly double. "At July 1 2018, the budget estimate of net debt in Australia was about A$341.0 billion, up from A$174.5 billion in September 2013, when the Coalition took office. That’s an increase of A$166.5 billion, or roughly 95%, over almost five years". Perhaps Slomo should be tackling this issue rather than hollow boasts about a balanced budget.
FactCheck: has Australia's net debt doubled under the current government?
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@Jack Wyatt be very careful you are standing into danger by wandering into that hell hole which really upsets Moderators - politics, so I strongly such a quick change of course and head for safer waters.
Thanks T, you saved me a post.
AndyinOz
Member
I have been following the discussion, as it has gone in the last few posts I thought I would put in my two cents. I admit to not really having any great deal of knowledge as to acquisition or maintaining of military equipment be it naval or otherwise. I am because of my previous career choices familiar with the fact that despite Australia not making use of nuclear fission as power source we do have a single reactor to produce items for nuclear medicine not just for use but also for use elsewhere as I think there are only about a dozen reactors used for nuclear medicine production worldwide. Much like having a nuclear medicine industry or facility, having a defence industry gives you options and can make you less dependent on supply chains which you may have little control over,
From my perspective, there is little question of the validity of maintaining such a capability.
To go back to for a moment my example, because of a fault with the reactor at Lucas Heights Australia found itself in the position of needing to send precursor isotopes to the US for further processing so that we could maintain the ability to provide nuclear medicine options to patients here (that has resulted in calls for us to build a replacement facility for the ageing one we have).
Defence in my mind should be much the same, we maintain an industry because of a critical need for the nation and because it gives us options to provide a national capability that we do not need to totally outsource to countries outside of our own. I for one sure to hell hope I never need to need radiotherapy or alike but I feel better knowing that we can make the stuff here ourselves and are able to maintain for want of a better word a stockpile.
From my perspective, there is little question of the validity of maintaining such a capability.
To go back to for a moment my example, because of a fault with the reactor at Lucas Heights Australia found itself in the position of needing to send precursor isotopes to the US for further processing so that we could maintain the ability to provide nuclear medicine options to patients here (that has resulted in calls for us to build a replacement facility for the ageing one we have).
Defence in my mind should be much the same, we maintain an industry because of a critical need for the nation and because it gives us options to provide a national capability that we do not need to totally outsource to countries outside of our own. I for one sure to hell hope I never need to need radiotherapy or alike but I feel better knowing that we can make the stuff here ourselves and are able to maintain for want of a better word a stockpile.
Net debt does not effect the liability position of outstanding loans that have to be paid and in Australia's case exacerbated by structural deficits.
I would add to that tempered by the extent of borrowing because in a macro sense the PAYE and GST receipts will likely be substantially chewed up servicing the debt. The flip side is that there is a case for the NZ approach in which it goes to the global market with a business case for the best contracted defence solution. However on the gross debt fundamentals taking into account its current favourable liability position in terms of outgoings from borrowing there is at least in New Zealand's case ample fiscal headroom to borrow a bit more with respect to defence spending. Which should be encouraged and embraced by Australia.
Why is net debt not relevant? A lot of statistics for national debt are net rather than gross, even if not labelled as such.
One of the GoA investment funds, the Future Fund, has about $180 billion under management. The return on those invested funds is significantly higher than the rate of interest payable on GoA debt, so its economically not rational to use those monies to pay off debt.
Jack Wyatt
Member
Consistently across this forum comments suggesting the Coalition are better economic managers are allowed to pass without moderation or question. The fallacy that the Coalition reduce debt is captured in the supporting facts I provided. Nothing is political about it except the truth is hard for some to accept.
HMAS Hobart is back in FBE having completed all her trials on the US West Coast.
It’s good to see her alongside and hopefully available for full operational duties after the Christmas break.
HMAS Hobart returns home, mission achieved, systems ready
It’s good to see her alongside and hopefully available for full operational duties after the Christmas break.
HMAS Hobart returns home, mission achieved, systems ready
I imagine the US would have been interested in looking at this ship and assessing its capabilities. It would be very close to what they are looking at for in their FFG(x) program.
If you have a problem with how a Moderator moderates, take it up with that Moderator or with another Moderator via a Personal Message, not by coming the raw prawn on the open forum. The green ink was used as a reminder not as warning. This the grumpy Moderator mode.
Net debt can be relevant matrix to financial analysts and economists. However, what you need to understand is that Net Debt and Gross Debt tell a different economic story.
New Zealand's net debt and gross debt are both generally very good particularly in comparison with the northern hemisphere western economies. Australia's net debt is on par with New Zealand. A chocolate fish for that. However with Australia's Gross Debt at circa 42% of GDP is as I indicated above still leaves the real liability position unchanged regardless of a governments allocation of assets, many of which are illiquid asset classes, or have legislative encumbrances placed on them. Of course when calculating Net Debt one has to bear in mind that there are also Crown and SOE assets and funds placed in trust that governments do not use or apportion as revenue offsets from Gross Debt. In other words they are ring fenced. An example the New Zealand Government Earthquake Commission in which was designed through statute to never let any Finance Minister / Treasurer near enough to get their grubby hands on it.
You are correct that it is economically not rational to use monies from specific purpose revenue generation funds (like the Future Fund you mentioned) to wipe out or pay down a debt liability when that fund has positive alpha characteristics. In fact as I mentioned above they are often legislatively precluded from doing so anyway. Which underpins the rationale why a Gross Debt comparison between NZ and OZ was used by me to tell a particular fiscal story of New Zealand's latent fiscal capacity to increase its defence spend and demonstratively expose the myth unaffordability.
Thus returning to my principle point. New Zealand has significant fiscal head room - to spend more on defence even if it did involve the necessity to take on some debt to do so. Which would be advantageous for both countries in the strategic sense and in the sense that Australia would not worsen its gross debt position nor fail to attend to its structural deficits.
Jack Wyatt
Member
This information was included in the Member for Corio's (Richard Marles MP, Shadow Minister for Defence) address to the Submarine Association in Canberra on 7 November 2018. The observations from the Opposition make very interesting reading.
"The bipartisan commitment to the renewal of Australia’s military equipment and the 2% of GDP defence spend has been critical to this renewal occurring. The commitment is given sincerely and will be honoured".
http://www.richardmarles.com.au/wp-content/uploads/2018/11/18.11.07-SPEECH-TO-SIA-CONFERENCE.pdf
"The bipartisan commitment to the renewal of Australia’s military equipment and the 2% of GDP defence spend has been critical to this renewal occurring. The commitment is given sincerely and will be honoured".
http://www.richardmarles.com.au/wp-content/uploads/2018/11/18.11.07-SPEECH-TO-SIA-CONFERENCE.pdf
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