A federal government that stops paying its debts is not just a failure of political leadership but a failure to govern effectively, according to a panel of experts in Australia.
The panel’s report, published by the ABC, is the latest of a series of critical reports by the Federal Opposition on the Abbott Government’s finances, with the panel recommending that the Federal Parliament should have the power to suspend the Government, or remove it from office, if the Treasurer fails to repay debts.
The ABC has already published an editorial in this space that criticises the Government’s failure to meet its financial obligations, including to its pension fund.
But the report is also a response to what the panel said were a series on the government’s finances from the ABC last year and in previous years.
“In 2014, the ABC commissioned a public interest journalism program to investigate the finances of the Federal government,” the report said.
In particular, it found that in the year from September 2014 to December 2015, the federal government’s debt-to-GDP ratio rose from 9.5 per cent to 10.7 per cent.
This is a figure that does not come close to what it was in 2012, when it was 9.6 per cent, and a rise of more than 40 per cent in debt since the last election.
It also found that the debt has grown to an amount of more a $1.8 trillion, an increase of about $800 billion over the same period.
At the time, the government said it was unable to meet the obligations under the Commonwealth’s bailout plan, and the debt would be repaid by 2019.
However, the debt crisis that followed has made the debt a serious issue for the Government.
A debt of more $1 trillion means a debt burden that has not only forced it to continue paying down the debt but has also put the government into a position where it cannot continue to pay its bills.
As the report noted, there is a perception in the Government that the Treasurer is not in charge because the Treasurer can cut his own budget and there is an assumption that the budget will be cut if the debt is not paid.
One of the issues the report raises is that in 2012 the Treasurer cut the Budget by $200 million, meaning the debt burden grew to $1,250 billion.
That would mean that if the Government continues to pay down its debts, it would need to borrow $2,000 billion to meet current expenses.
If the Government can only borrow $1 billion, the report recommends the Federal Treasurer should stop paying the debt and leave the position open to be replaced by a Labor Government.
“A Treasurer who is unable to pay the debt can have the Treasurer take the position that he cannot accept the Treasurer’s position of no payment on the debt,” the paper said.
“If the Treasurer refuses to accept the position, the Treasurer could then be removed from office.”
The report said that if it is the Treasurer who does not pay the bills, then the Government should be able to go to the Federal Court to have the Government replaced.
When asked about the report, a spokesperson for the Treasurer, Scott Morrison, said: “The Federal Government is paying its debt.
Its in a position of balance with its creditors and is making the most of its opportunity.”