“The politicians and the media threw a fit over Senator Joyce’s comments on Australia’s debt, to hide the real debt situation, which is over $800 billion worse than he said,” Citizens Electoral Council leader Craig Isherwood revealed today.

“PM Rudd claims his government’s debt is the lowest in the world, but he wants the public to ignore the fact that to bail out the banks, his government has gone guarantor for over $800 billion in bank liabilities, which it is in danger of being forced to honour by the repercussions of the Greek sovereign default crisis.”

Mr Isherwood detailed the debt figures:

$122 billion—Commonwealth government debt, about 10 per cent of GDP.
$1,232 billion ($1.232 trillion)—Australia’s gross foreign debt, over 100 per cent of GDP.
$1,200 billion (1.2 trillion)—Australia’s household debt, 100 per cent of GDP.
$827 billion—foreign debt of Australia’s banks and other financial institutions.
$441 billion—bank and other financial institutions foreign debt with maturity of less than 90 days.

“When politicians and the media go hysterical like they did this week, you know they have something to hide,” Mr Isherwood said.

“This is it: they only want to talk about the 10 per cent of GDP Commonwealth debt, so the public don’t start questioning how much debt we are exposed to by the bank guarantees.

“The fact is, our government effectively faces the same crisis as every other government in the world, because instead of reorganising the bankrupt financial system in 2008 along the lines prescribed by the expert economist Lyndon LaRouche, they bailed it out, and transferred the bankruptcy on to the public.

“The Australian government guaranteed $700 billion in bank deposits up to $1 million, and new foreign borrowings by the banks of more than $140 billion—over $840 billion in total.

“They insist that those guarantees were just a show of confidence in the ‘soundness’ of our banks, and will never have to be honoured, but when those same banks carry a $441 billion 90-day debt exposure to the international money markets, how can they ever pay it back?”

He continued, “They can’t. They have to keep borrowing more and rolling it over, but that means the government’s exposure is not so much to the banks, but to the international money markets.

“The Greek sovereign default crisis threatens to blow those markets up—and if not Greece, it could be Spain, Portugal, Ireland, Italy, even the U.K. and the U.S.—and Australia’s banks will be caught out just like in October 2008 when they faced bankruptcy and the government rescued them with its guarantee, but this time it is the Australian public which will be caught out.

“In these looming circumstances, Australia then joins the ranks of nations crushed under their public debt.”

The CEC National Secretary concluded, “What is proving increasingly impossible to hide, is that the whole system is rotten—15 months of coordinated government bail-outs of the financial system has just created more debt, and bankrupted the governments.

“Now is the time to finally go with LaRouche’s and the CEC’s solution, of bankruptcy reorganisation, a new credit system run by a government-owned national bank, and long-term public investment in infrastructure development and reindustrialisation.”