Australian Politics Forum - Its not s surplus when you don't account for costs

NBNMyths

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Re: Its not s surplus when you don't account for costs
Reply #15 - May 5^th, 2012 at 8:17pm

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

Because the NBN is treated as an investment, not expenditure.

Quote:

http://www.zdnet.com.au/govts-nbn-accountability-correct-economist-339329928.htm

Govt's NBN accountability correct: economist

In the budget, the NBN is treated as an asset rather than an expense to the government.

"Money transferred to NBN Co cannot be classified as an expense under currently accepted accounting standards. It is accounted for as a financial asset on the balance sheet (an 'investment in other public sector entities'), as opposed to an expense item on the operating statement. An eventual gain or loss on the government's equity investment in NBN Co is accounted for in the operating statement as an expense, but this does not affect the fiscal balance measure."

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Armchair_Politician

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Re: Its not s surplus when you don't account for costs
Reply #16 - May 5^th, 2012 at 8:37pm

adelcrow wrote on May 5^th, 2012 at 1:54pm:

Lets just be grateful that its not a real surplus or we would be plunged into a deep recession that will take years to dig ourselves out of.
Not one economist alive thinks pushing for a surplus while the world economy is slowing and various western countries are falling into double dip recessions is a good idea.

You don't think it'll take decades for the debt racked up by the ALP to be paid off? Howard paid off Keating's debt in 11 years and it was just under $100bn if I remember correctly. The debt from Rudd/Gillard/Swan's incompetence is many times that!

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Armchair_Politician

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Re: Its not s surplus when you don't account for costs
Reply #17 - May 5^th, 2012 at 8:41pm

NBNMyths wrote on May 5^th, 2012 at 8:17pm:

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

Because the NBN is treated as an investment, not expenditure.

Quote:

http://www.zdnet.com.au/govts-nbn-accountability-correct-economist-339329928.htm

Govt's NBN accountability correct: economist

In the budget, the NBN is treated as an asset rather than an expense to the government.

"Money transferred to NBN Co cannot be classified as an expense under currently accepted accounting standards. It is accounted for as a financial asset on the balance sheet (an 'investment in other public sector entities'), as opposed to an expense item on the operating statement. An eventual gain or loss on the government's equity investment in NBN Co is accounted for in the operating statement as an expense, but this does not affect the fiscal balance measure."

By that logic, new aircraft, ships & submarines for the defence force are investments and therefore are not required to be included in the budget. A new hospital is an investment and does not need to be included in the budget. Get my drift???

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buzzanddidj

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Re: Its not s surplus when you don't account for costs
Reply #18 - May 5^th, 2012 at 8:49pm

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

It's pretty SIMPLE, really
REGARDLESS of NBN criticism and OPINION, Swan has presented the budget figures CORRECTLY

buzzanddidj wrote on May 2^nd, 2012 at 10:14pm:

http://www.gifs.net/Animation11/Words/New/newsflash.gif

The Federal Opposition has again incorrectly alleged that it could save money by cutting the Labor Federal Government’s multi-billion dollar National Broadband Network project, despite financial projections which show the project is likely to make the Government billions.

The NBN is not listed in the Federal Budget as an expense because it is technically a government investment and will consequently not divert money away from other projects.
This accounting technique has been verified by economists from the Parliamentary Library of Australia as an “internationally accepted accounting standard”

In addition, in the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.

http://delimiter.com.au/2012/02/08/coalition-missteps-on-nbn-budget-savings/

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Your Christians are so unlike your Christ.'

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Armchair_Politician

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Re: Its not s surplus when you don't account for costs
Reply #19 - May 5^th, 2012 at 8:53pm

buzzanddidj wrote on May 5^th, 2012 at 8:49pm:

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

It's pretty SIMPLE, really
REGARDLESS of NBN criticism and OPINION, Swan has presented the budget figures CORRECTLY

buzzanddidj wrote on May 2^nd, 2012 at 10:14pm:

http://www.gifs.net/Animation11/Words/New/newsflash.gif

The Federal Opposition has again incorrectly alleged that it could save money by cutting the Labor Federal Government’s multi-billion dollar National Broadband Network project, despite financial projections which show the project is likely to make the Government billions.

The NBN is not listed in the Federal Budget as an expense because it is technically a government investment and will consequently not divert money away from other projects.
This accounting technique has been verified by economists from the Parliamentary Library of Australia as an “internationally accepted accounting standard”

In addition, in the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.

http://delimiter.com.au/2012/02/08/coalition-missteps-on-nbn-budget-savings/

Actually, the money could be put to far better use upgrading hospitals, training doctors/nurses, finishing the Pacific Hwy upgrade, fixing decaying schools and so on.

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adelcrow

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Re: Its not s surplus when you don't account for costs
Reply #20 - May 5^th, 2012 at 8:58pm

Armchair_Politician wrote on May 5^th, 2012 at 8:37pm:

adelcrow wrote on May 5^th, 2012 at 1:54pm:

Lets just be grateful that its not a real surplus or we would be plunged into a deep recession that will take years to dig ourselves out of.
Not one economist alive thinks pushing for a surplus while the world economy is slowing and various western countries are falling into double dip recessions is a good idea.

You don't think it'll take decades for the debt racked up by the ALP to be paid off? Howard paid off Keating's debt in 11 years and it was just under $100bn if I remember correctly. The debt from Rudd/Gillard/Swan's incompetence is many times that!

Keatings debt...Labor was the first govt to have a surplus so the debt we paid off was accumulated debt including 2 world wars, Korea, Malaya, Vietnam, the Snowy Mountain Scheme and all of Menzies and the Libs post war debts.
But I forgot the Libs reckon they would have had surpluses, growth, record employment and low interest rates all through the Global financial crises Grin

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Armchair_Politician

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Re: Its not s surplus when you don't account for costs
Reply #21 - May 5^th, 2012 at 9:04pm

adelcrow wrote on May 5^th, 2012 at 8:58pm:

Armchair_Politician wrote on May 5^th, 2012 at 8:37pm:

adelcrow wrote on May 5^th, 2012 at 1:54pm:

Lets just be grateful that its not a real surplus or we would be plunged into a deep recession that will take years to dig ourselves out of.
Not one economist alive thinks pushing for a surplus while the world economy is slowing and various western countries are falling into double dip recessions is a good idea.

You don't think it'll take decades for the debt racked up by the ALP to be paid off? Howard paid off Keating's debt in 11 years and it was just under $100bn if I remember correctly. The debt from Rudd/Gillard/Swan's incompetence is many times that!

Keatings debt...Labor was the first govt to have a surplus so the debt we paid off was accumulated debt including 2 world wars, Korea, Malaya, Vietnam, the Snowy Mountain Scheme and all of Menzies and the Libs post war debts.
But I forgot the Libs reckon they would have had surpluses, growth, record employment and low interest rates all through the Global financial crises Grin

Interesting (and very warped) view of history! Grin

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buzzanddidj

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Re: Its not s surplus when you don't account for costs
Reply #22 - May 5^th, 2012 at 9:04pm

Armchair_Politician wrote on May 5^th, 2012 at 8:53pm:

buzzanddidj wrote on May 5^th, 2012 at 8:49pm:

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

It's pretty SIMPLE, really
REGARDLESS of NBN criticism and OPINION, Swan has presented the budget figures CORRECTLY

buzzanddidj wrote on May 2^nd, 2012 at 10:14pm:

http://www.gifs.net/Animation11/Words/New/newsflash.gif

The Federal Opposition has again incorrectly alleged that it could save money by cutting the Labor Federal Government’s multi-billion dollar National Broadband Network project, despite financial projections which show the project is likely to make the Government billions.

The NBN is not listed in the Federal Budget as an expense because it is technically a government investment and will consequently not divert money away from other projects.
This accounting technique has been verified by economists from the Parliamentary Library of Australia as an “internationally accepted accounting standard”

In addition, in the long term, NBN Co’s projections show the network is slated to make a return of between 5.3 percent and 8.8 percent on the up to $44.6 billion that will be invested in the network — meaning it will return an amount ranging from $1.93 billion to $3.92 billion, as well as delivering Australia a fibre optic telecommunications network to replace Telstra’s aging copper infrastructure.

http://delimiter.com.au/2012/02/08/coalition-missteps-on-nbn-budget-savings/

Actually, the money could be put to far better use upgrading hospitals, training doctors/nurses, finishing the Pacific Hwy upgrade, fixing decaying schools and so on.

POSSIBLY ...

But it's hardly appropriate for investment funding raised by
NBN Co
to be siphoned off to ANY other project other than where the funding was RAISED for

IS IT ?

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MOTR

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Re: Its not s surplus when you don't account for costs
Reply #23 - May 5^th, 2012 at 9:06pm

progressiveslol wrote on May 5^th, 2012 at 3:39pm:

adelcrow wrote on May 5^th, 2012 at 1:58pm:

progressiveslol wrote on May 5^th, 2012 at 1:46pm:

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

Because he is full of shite. This will be pointed out by the liberals party I am sure. Australians will not get fooled again by labor BS.

A surplus at the expense of the economy is not only dumb...its criminal.
If you want to push for mass unemployment and record house foreclosures push for a surplus at all costs.
Only an idiot like Abbott would want to destroy the economy by playing political games in exchange for what he sees as his birthright.

I am not going to argue if a surplus is good or bad. I would argue calling a deficit a surplus is downright deceitful.

You poor little cherub. It's always upsetting when you find out the fiscal bottom line is not really the fiscal bottom line. Must be like finding out the tooth fairy is just your Dad in drag. Don't worry though, lols, there is no doubt Costello's Surpluses were as pure as the Virgin Mary.

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adelcrow

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Re: Its not s surplus when you don't account for costs
Reply #24 - May 5^th, 2012 at 9:08pm

Armchair_Politician wrote on May 5^th, 2012 at 9:04pm:

adelcrow wrote on May 5^th, 2012 at 8:58pm:

Armchair_Politician wrote on May 5^th, 2012 at 8:37pm:

adelcrow wrote on May 5^th, 2012 at 1:54pm:

Lets just be grateful that its not a real surplus or we would be plunged into a deep recession that will take years to dig ourselves out of.
Not one economist alive thinks pushing for a surplus while the world economy is slowing and various western countries are falling into double dip recessions is a good idea.

You don't think it'll take decades for the debt racked up by the ALP to be paid off? Howard paid off Keating's debt in 11 years and it was just under $100bn if I remember correctly. The debt from Rudd/Gillard/Swan's incompetence is many times that!

Keatings debt...Labor was the first govt to have a surplus so the debt we paid off was accumulated debt including 2 world wars, Korea, Malaya, Vietnam, the Snowy Mountain Scheme and all of Menzies and the Libs post war debts.
But I forgot the Libs reckon they would have had surpluses, growth, record employment and low interest rates all through the Global financial crises Grin

Interesting (and very warped) view of history! Grin

So you honestly think that Keating was responsible for the debt incurred from both world wars and the accumulated post war debt incurred by Menzies, Holt, Gorton and McMahon?

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NBNMyths

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Re: Its not s surplus when you don't account for costs
Reply #25 - May 5^th, 2012 at 10:38pm

Armchair_Politician wrote on May 5^th, 2012 at 8:41pm:

NBNMyths wrote on May 5^th, 2012 at 8:17pm:

BlOoDy RiPpEr wrote on May 5^th, 2012 at 1:43pm:

How can Swan claim a surplus when he does not account for costings like the NBN?

Because the NBN is treated as an investment, not expenditure.

Quote:

http://www.zdnet.com.au/govts-nbn-accountability-correct-economist-339329928.htm

Govt's NBN accountability correct: economist

In the budget, the NBN is treated as an asset rather than an expense to the government.

"Money transferred to NBN Co cannot be classified as an expense under currently accepted accounting standards. It is accounted for as a financial asset on the balance sheet (an 'investment in other public sector entities'), as opposed to an expense item on the operating statement. An eventual gain or loss on the government's equity investment in NBN Co is accounted for in the operating statement as an expense, but this does not affect the fiscal balance measure."

By that logic, new aircraft, ships & submarines for the defence force are investments and therefore are not required to be included in the budget. A new hospital is an investment and does not need to be included in the budget. Get my drift???

What utter rubbish.

You really don't understand? Let me make it as simple as possible:

The NBN is slated to earn a positive return. That is, it generates income because people pay a fee to use it. Like a toll road. Because it earns income, its value will exceed its cost, hence the return. That's what makes it an investment.

Aircraft, hospitals etc do not earn a positive return. If the Govt buys an F35, it earns no income and a year later it's worth less that they paid for it.

To create an analogy....

If you spend $200,000 on a new BMW, that's an expense/liability. Because in a year's time it's worth less than $200,000.

But if you spend that $200,000 on a housing unit, which you lease out for a monthly rent which exceeds your loan repayment, then it's an asset, not a liability. Its value will most likely appreciate (or at least remain static), and it generates sufficient income to repay its own debt.

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