The interest bill on federal government debt is expected to rise to $20 billion in 2024-5 on a debt of almost $1 trillion. The federal government borrows by issuing bonds. The domestic banks and overseas banks are big buyers .
According to A/Prof. Humphery-Jenner in newsroom.unsw.edu.au the buyers were: banks (50 %); asset managers (25 %) including super funds and sovereign wealth funds; hedge funds (17 %); and central banks (5 %). Central bank buyers comprised the Bank of Japan, European Central Bank, Federal Reserve and the Reserve Bank of Australia.
The professor says precise details of the asset managers and hedge funds“are not forthcoming”. However the most significant bond funds are controlled by JPMorgan, T Rowe Price and Vanguard. These massive international financiers are interconnected.
Vanguard together with Blackrock (the world’s largest asset manager) are among the top three investors in Australia’s big four banks.They also own large stakes in insurers QBE, Suncorp and Insurance Australia Group, and in fuel retailers Woolworths and Caltex.
These massive finance corporations are deeply integrated into the Australian economy.
To pay for all the services provided by governments, money is borrowed, and interest paid to domestic and foreign banks. Borrowing is expensive. A mounting share of federal revenue, money that could be used for the benefit of the Australian people, goes right back out the door in the form of interest payments to investors who purchase government bonds. Rather than collecting taxes from the wealthy corporations, the government is paying them to borrow their money.
This is why there no money for all the problems that beset the people – housing, health, welfare, infrastructure and education.
A peoples’ government would control and tax the billionaire and trillionaire corporations and use the money for the peoples benefit and not allow international usury.
