FED: Treasurer defends foreign debt levels

AAP General News (Australia)
04-21-2006
FED: Treasurer defends foreign debt levels

SYDNEY, April 21 AAP - Treasurer Peter Costello has defended Australia's surging level
of foreign debt as it approaches half a trillion dollars.

On the day the government became debt free by paying off the nation's bankcard, Australia's
foreign debt levels are continuing to rise into record territory.

But Mr Costello said today the foreign debt was largely driven by Australian banks
borrowing from overseas lenders, not the government taking out off-shore loans.

"Now they (banks) have to watch their balance sheets but I can assure you that those
... Australian banks are enormously profitable," Mr Costello told reporters in Sydney.

"There's no problem at all with the level of borrowings of Australian banks and we
monitor these things."

Mr Costello has declared today "debt-free day" because the government has finally paid
off $96 billion in borrowings.

But Opposition treasury spokesman Wayne Swan says it is pompous to talk about being
debt-free when Australia's foreign debt is today expected to hit half a trillion dollars.

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KEYWORD: DEBT COSTELLO

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