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Debt isn't necessarily bad if it's used to acquire or build assets. It's a different story if it's used to fund ongoing consumption, that's when it leads to serious trouble.There needs to be a much broader debate in Australia about debt, particularly where state governments are concerned. The approach of the past 20 years has essentially been to say that the mortgage was a problem, so we sold the house in order to repay it. Trouble is, we got rid of the assets as well as the debt, in many cases making the net position worse rather than better over the longer term.So far as something like building a road is concerned, there's a question. What is the total cost over the life of the road if it's done by some arrangement involving private ownership? And what is the cost if it's owned by the state and financed by debt?
Debt isn't necessarily bad if it's used to acquire or build assets. It's a different story if it's used to fund ongoing consumption, that's when it leads to serious trouble.
There needs to be a much broader debate in Australia about debt, particularly where state governments are concerned. The approach of the past 20 years has essentially been to say that the mortgage was a problem, so we sold the house in order to repay it. Trouble is, we got rid of the assets as well as the debt, in many cases making the net position worse rather than better over the longer term.
So far as something like building a road is concerned, there's a question. What is the total cost over the life of the road if it's done by some arrangement involving private ownership? And what is the cost if it's owned by the state and financed by debt?
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