If ever there's a time for national debt, it's now

THE flood levy debate between the Prime Minister and Opposition Leader is embarrassingly base. Julia Gillard claims a levy is necessary because she isn't prepared to risk delaying a return to surplus by 2012-13: as if that is some sort of key D-Day event on Australia's economic calendar.

Tony Abbott says it isn't necessary to impose a levy because more fat can be trimmed from the budget, saving Australians yet another "great big new tax": forgetting of course that the nation was already "saved" from his maternity leave levy courtesy of the rural independents backing Labor, or that John Howard during his years in office instituted no less than five levies as circumstances required.

For the government, the biggest issue should be whether it can competently spend the levy proceeds; not whether instituting one is a way of satisfying the political objective of a budget surplus in time for the next election.

As for Abbott's notion of trimming the budget further as the better way to afford Queensland repairs: it's not a bad fiscal approach generally, but it shouldn't be a precondition to helping as quickly and effectively as possible.

That both leaders aren't prepared to canvass what should be an obvious method of helping Queensland recover - building up government debt to support fixing infrastructure - is a sure sign that our modern politicians can't separate political opportunism from economic realities.

No quick-fix trimming of the budget (by all means do so in a considered way over time), no artificial deadline dictating a levy.

I have said it before: Australia has low government debt by global standards. At less than 6 per cent of GDP we compare favourably to fellow Western democracies burdened with debt closer to 60-80 per cent of GDP.

When a crisis such as Queensland happens, we can afford to quickly commit to helping the local citizenry without descending into a debate about whether a tax is needed or existing government programs must suffer.

Abbott simultaneously tries to claim that he is railing against another Labor tax yet is prepared to meet with Gillard to discuss alternative ways to fund the rebuilding. But given that his ideas include finding savings by scrapping the National Broadband Network or slicing into what's left of the Building the Education Revolution - flawed schemes to be sure but core Labor pledges - there is no serious attempt at negotiation in Abbott's offer.

While Gillard got sniffy last week when cross-examined on radio about whether her government could be trusted to administer monies coming from the levy, she should reflect on Labor's not so impressive legacy when it comes to spending our money. From pink batts to blowouts on health spending, it's no wonder the public worries when politicians put our tax dollars to work.

The real focus of public discussion, however, should be on the debilitating accepted wisdom that has crept into the national psyche: debt equals poor economic management, surplus equals strong economic stewardship.

While that formula is sometimes the case, debt can be an important mechanism for planning for the future when used effectively. In the short term, such planning includes getting Queensland - one of the twin engine rooms of Australia's modern resource economy - back on track. In the medium and long term, it may mean using debt to boost productivity and infrastructure to prepare for the next mining boom and the challenges of an ageing society, for example.

Because national economies are infinitely lived they can afford to carry more debt for longer than can households - one of the reasons that constant comparisons of the national accounts to household planning is so tedious. If the economy is growing faster than debt is being accumulated, that debt as a percentage of GDP falls even if it isn't being repaid.

In the here and now, the biggest threat to our GDP growth is the damage done in Queensland.

Our leaders aren't prepared to acknowledge one simple fact: debt isn't a cataclysmic concern in this country.

If ever there was a time when it had a role, it is now to repair Queensland.