What skyrocketing debt?

Japan is not fussed about their net debt – now 134.3% of GDP, according to the IMF, and budgeted to rise by 2018 to 154.8%. So neither should Australia be with 11.6% now, budgeted to fall by 2018 to 5.6%.

Japan, like Australia, has the assets, the economic strength and future cash flows for repayments when the time comes. Now is time, with low interest rates and projected income growth, to borrow more and build an even stronger economy.

Treasury and Finance Department officials who prepared the recent Pre-election Economic and Fiscal Outlook calculate Australia's budget will return to surplus in 2016-17 and enable debt reduction to proceed steadily from then onwards. That is sooner than most comparable nations.

Why Australia would want to pay it back at this stage in the cycle rather than increase borrowings and construct more infrastructure – and keep the jobless rate down – is a bemusement to many.

The third widespread falsehood is that Australia avoided recession after the GFC hit in 2008 because it had no debt and, in fact, had money in the bank. This is frequently asserted by politicians and commentators paid to fabricate.

The evidence supports the opposite contention. The IMF's database of all nations shows nine countries were in net surplus in 2007, apart from a few oil-rich Islamic republics and some small poor African states. These were Australia, Bulgaria, Chile, Denmark, Estonia, Finland, Kazakhstan, Norway and Sweden.

If low debt was a cushion, then we would expect all these nations to have survived particularly well through the GFC. They didn't.

Bulgaria, Kazakhstan and Chile all suffered three quarters with zero or negative GDP growth. Inflation in Kazakhstan soared to almost 20% in 2008. The jobless rates in Bulgaria and Chile rose dramatically and remain high.

Denmark suffered five quarters of negative GDP growth in 2008-10. Growth returned in 2011, but three of the last four quarters have been zero or negative. The jobless rate almost trebled from 1.7% in 2008 to 4.5% in 2010. GDP per capita remains well below the 2008 level.

Sweden also suffered five quarters of negative or zero GDP growth. The jobless almost doubled from 5.6% in 2008 to 9.5% in 2010 and remains 9.1%. GDP per capita has just snuck back to 2008 levels.

Estonia fared even worse with seven negative GDP quarters. Again, some recovery in 2011, but current growth is barely positive. Estonia's jobless exploded from 4.0% to above 20%. Now still above 8%. GDP per capita remains well below its 2008 level.

Finland – which had net savings ten times Australia's level – experienced six negative GDP quarters. Positive growth returned in 2011, but the last year has been negative. The jobless more than doubled from 5.2% to 10.9%. The rate is now 7.8%, but was 10.8% in May. GDP per capita has stayed well below its 2008 level for the last three years.