Australia's Foreign Debt

Foreign Debt

Good morning ladies and gentlemen. Today I will be speaking to you on a topic that many Australians believe the government should start taking a lot more seriously. Our foreign debt.

Australia’s level of foreign debt is a key economic indicator and one which is widely quoted in the media today. But before we get into what the problems dealing with this issue we must first define exactly what it is, and how it is calculated.

Foreign debt or commonly referred to as external debt can in simple terms be described as the amount of money owed to overseas countries by groups in an economy. There are three main ways of measuring a countries foreign debt. Gross foreign debt is the total amount owed by Australians to overseas lenders. Net foreign debt is equal to gross foreign debt minus amounts of money that overseas investors owe Australia. This figure gives a better indication of Australia’s debt situation as it takes in account what we are owed ourselves. The last,...