Australian Federal and State Budgets - An Overview
It is clear that, whereas some countries such as Greece and Iceland are in a more precarious fiscal position (with budget deficits, as a proportion of gross domestic product, of 15.7% and 13.6% respectively - as well as having high levels of gross public debt),82 Australia is in a relatively more secure position (with a budget deficit of 4% of GDP, at least for 2007-08, as well as a lower level of debt).
In the aftermath of the 1990s recession, nearly all jurisdictions in Australia not only adopted charters of fiscal responsibility, or similar codes of financial practice, but have been fairly rigorous in implementing them. Kerry Carne (in her 2007 thesis Fiscal Policy Rules and Public Capital Formation In Australia) wrote that from the late 1990s:
The Commonwealth government met its budgetary balance target. . .in each year except 2001-02. The New South Wales government met its budgetary balance target. . .from 1999-2000, failing to meet the target only in 1998-99. The Victorian government met its target. . .from 2000-01 [onwards]. . .The
The European Union (EU) developed the term “gross public debt” in its European System of Accounts 1995 (ESA 95). The term is also known commonly as Maastracht Debt. According to Ismael Ahamdanech Zarco, “Maastricht debt consists of the liabilities of general government in the following categories: currency and deposits. . .securities other than shares. . .and loans”. See Ismael Ahamdanech Zarco, “Structure of Government Debt in Europe” in Eurostat: Statistics in Focus, no.110, 2008, p.2. The EU definition is similar to that in the IMF’s 2001 version of its Manual on Government Financial Statistics in which the IMF defines gross debt as “All liabilities that require payment or payments of interest”. See International Monetary Fund, Manual on Government Financial Statistics (IMF, Washington DC, 2001), chapter 7. As far as Australia is concerned, Wilson Au-Yeung and his colleagues have written that, “The main component of gross debt on the Australian Government’s balance sheet is Commonwealth Government Securities (Treasury Bonds) outstanding.” See Wilson Au-Yeung, Katrina di Marco and Mitchell Pirie, A History of Public Debt in Australia (Australian Treasury, Canberra, 2009), p.4.