MB Fund Podcast: Australian Budget – Do 10 years of deficits matter?

In this week’s investment podcast, MB Fund’s Chief Economist Leith van Onselen, Head of Investments Damien Klassen, and Head of Advice Tim Fuller investigate if 10 years of Australian budget deficits actually matter
Topics covered:
  • Key budget parameters & investment implications
  • No more big New Zealand
  • Labour market tightening and unemployment
  • Immigration
  • How stimulatory is the budget?
  • Debt levels being a political football
  • Bringing back big Australia
  • How the budget impacts asset allocation
  • Land prices, stamp duty & property taxes
View the presentation slides

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Tim Fuller is Head of Advice at the MacroBusiness Fund, which is powered by Nucleus Wealth.

 

Tim Fuller

Comments

  1. pfh007.comMEMBER

    Yes of course they matter if they involve the sale of interest bearing securities or the deployment of the central bank balance sheet to support their prices and depress the yields.

    What part of allocating economic resources to paying interest on debt do people have trouble wrapping their grey matter around.

    Even if you subscribe to the magic monetary tree school where interest and debt can be paid via endless currency devaluation the result remains the same. Economic resources and policy freedom is allocated to the payment of interest.

    The RBA balance sheet needs a large dose of democracy.

    Allow the general public and non banks to operate accounts at the RBA and use those accounts to settle their transactions.

    Make the banks work for a living by ending their monopoly.

    If a government wants to borrow because the economy is at full capacity let them borrow central bank deposits from the general public who hold them.

  2. Hex TexasMEMBER

    So what if other countries debt is worse than Australia’s, why does that justify putting us on the same path ? This debt is never repayable and the assumptions these fellows make are naive, this is only going to get worse and worse. If Australia committed to paying off this debt aT 10 billion a year, and interest rates remained at2% the entire time it would take 100 years and cost more than 2 Trillion. That is never ever going to happen.

    I know you fellows are all very nice, and endlessly polite, but this debt is a fu*king catastrophe, for this country, and future generations, and it was not worth it.

    • My daughter is attending a climate change protest tomorrow. I told her she should be attending a debt protest. What the boomers are doing to the younger generation is immoral.

      • Hex TexasMEMBER

        That is absolutely correct, this is nothing less than intergenerational theft, and it is unforgivable.
        I must apologize for the equation that i posted as it is incorrect. 10 billion a year for 100 years + 1 trillion, which would only have paid back the 1 trillion dollar initial principal, and the un compounded interest of 20 Billion dollars a year would still be outstanding, and that would be twice the amount principal 2 Trillion.

      • drsmithyMEMBER

        The debt can be “fixed” with a tappity-tap at a computer.

        The environment cannot.

        The former is not a process without consequence, but failing to address the latter will be the end of our civilisation at the very least, and quite possibly our species.

        • john6007MEMBER

          Drs, yes that statement is correct however the path of continued growth using increased debt increases the negative environmental consequences. One example, subdivision of an existing house and land leave no trees or greenery and is fatal for any wildlife / bird life, let alone the climate consequences.

          • Replying to DRS comment.
            Don’t think drs gets your subtlety in your 2nd sentence. Perhaps DRS is sent block splitter developer 😆🦠