Why a $1 trillion debt and climbing costs are nothing to worry about
The escalating government debt was not something the public should be concerned about despite decades of the issue being used as a political weapon, according to Sunsuper chief economist Brian Parker.
Sunsuper chief economist Brian Parker
A Queensland Media Club lunch was also told that escalating business pressures through increased labour costs and inputs were going to get worse because that was what the Reserve Bank wanted.
BDO chief executive partner Tony Schiffmann said there was not one client-type that had not reported escalating cost pressures, sometimes rising as much as 10 per cent.
“These cost pressures are going to mean the recovery has some question marks,” Schiffmann said.
However, Parker said those increases in business costs, including wages, were going to get worse and would do so because that was what the Reserve Bank had been trying to achieve for the past decade.
Parker also said he was relaxed about government debt and that it should not be compared with household debt, which was finite and needed to be repaid. Government debt only had to be refinanced so the political arguments about when and how it was repaid were dealing with a myth, he said.
He said the Federal Government was probably regretting the fact that it had spent the last 10 years using debt as a stick to beat the opposition when the level of debt was now escalating to record levels of more than $1.06 trillion by 2022-23.
The lunch also heard that the Chamber of Commerce and Industry’s Pulse survey had found that 84 per cent of Queensland businesses were not back to their pre-COVID levels. However, there were high levels of confidence that business would recover.
The survey found operating costs and labour costs were having an impact but profitability was increasing as were employment levels and capital expenditure.
The 12-month national outlook in the survey had risen a record 16 points while the state outlook rose 12 points.
In the panel discussion, the audience was told that the lack of a national app and policies for COVID was inhabiting domestic travel for tourism and business. There was also a need for public discussion about when and how national and state borders would be maintained.
The consensus among the panelists was that the State Government had been proved to be right about its border closures, but businesses now wanted to see the debate move into the next phase of the dealing with outbreaks because they would still occur even after vaccinations.
CCIQ chief executive Stephen Tait said business had to have more clarity because they needed to be able to plan