Apparently the Rudd government has around $26 billion in its Building Australia Fund but a $700 list of projects. There is no budget surplus. So from whom is the money going to be borrowed to finance the state's infrastructure projects?

It cannot be the US, Britain or Europe can it. They ain't lending. China?

Guy Rundle
puts it well in Crikey Daily re the US on the auto industry:

Hardy laissez-faire souls have been issuing calls to let the big three sink -- but they're few and getting fewer, as people really start to think about what such a collapse would do to the industrial north-east, and then to the whole country. Detroit is already an urban ruin -- holding a third of the population it had in 1960, and with whole deserted suburbs being reclaimed by nature. With a mass lay-off, it would pretty much collapse entirely, and dozens of smaller places through Michigan and Ohio wouldn't be much better off. At this point the Chicago boys can talk creative destruction all they like -- but people with the longer view can see that destructive destruction is the more likely outcome. That is, an economic problem will quickly become a political one, as people respond with crime and civil unrest.

The country is on the skids.

Wasn't the massive swing from extremes of free market to extremes of protectionism and sweetheart agreements a major feature of the nineteen thirties?
All the isolation leading up to the rise of totalitarianism and finally war ( of civilisations)?
Ps, like cartoon.
The Great Man takes control in a crisis. The patient does appear to have lost a little weight rather than quicker than ther underlings- just as well the experts are about!
Or so we are told.
In interim prior to posting above, have just watched 7.30 Report on windpower, renewables etc, really questioning the new governments's will, employing Portland Victoria as an example.
Here the treatment the windpower factory seems diagonally opposed to the favoured treatment afforded the Smelter. Could we be facing the bogging down of the "Battle of the Mar'n"?

China, Japan and a whole bunch of Middle East countries are sitting on huge foreign exchange surpluses.

Wayne Swan and Simon Crean made a lighning 2-day visit to China last weekend, ostensible to discuss the free trade agreement.

There may be political sensitivities about large slabs of foreign investment into Australia from less traditional sources but once things become calmer in financial markets there should be plenty of money available.

Australian infrastructure with sovereign guarantee should be a very salable type of investment.

Paul,
yes, the failure of the Rudd Government to invest in renewable energy---nay kicking the props away--- is disturbing in the light of the need to shift to a low carbon economy.

MikeM,
the Rudd Government has a problem. Its ability to raise private funds to pay for the billions dollar infrastructure projects has been curtailed by the credit crisis and the disenchantment with private public partnerships. Debt funding for the latter has dried up.

The Victorian Government's ambitious transport plan depends on Commonwealth funding to act as leverage not on private sector funding. No commonwealth funding no car tunnel, no regional rail line and no metro rail system.

Gary,

The big opportunity is with the sovereign wealth funds, not so much private investors. There are now plenty of unemployed investment bankers looking for something to do and foreign investors wishing some diversification from US government bonds might well be attracted to a few tens of billions of 20- or 30-year Australian government AUD bonds, especially now that the AUD has dropped to a more reasonable level.

The proceeds could then be on-lent to the states.