EDITORIAL: Debt mountain a heavy burden on our future
Australia has crossed a staggering debt milestone, but Labor shows little sign of changing course. The bill will ultimately be handed to future generations.
There are a few old adages that remain useful to keep in mind along life’s journey.
Such as don’t put off until tomorrow what you can do today. Actions speak louder than words. Save for a rainy day.
All very handy for personal life. And many have wider relevance, including for those in government who hold the purse strings.
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By continuing you agree to our Terms and Privacy Policy.Sadly, it seems the need to save for a rainy day has been forgotten in the Labor hallways in Parliament House.
Treasurer Jim Chalmers appears quite content with his lot even as our national debt soars.
On Thursday gross Commonwealth Government debt surpassed $1 trillion for the first time.
And yet despite the prospect of higher government debt interest payments, Dr Chalmers issued a statement claiming Labor are great economic managers.
But shadow treasurer Tim Wilson got it right.
“More debt is being used to stoke inflation, increase interest rates, and increase the price at the supermarket,” he said.
The Federal Government’s gross debt is projected to climb from 33.3 per cent of gross domestic product this financial year — with a gross debt burden of $1.031t — to 36.5 per cent of GDP by the end of the decade as Commonwealth debt climbed to $1.279t.
The Parliamentary Budget Office forecasts that national public debt interest payments will climb from $54.2b, making up 1.8 per cent of GDP during this financial year, to $77.2b in 2029-30, making up 2.2 per cent of GDP.
National debt is becoming a national disaster.
Australia is blessed with resources and opportunity — only limited by our willingness to embrace it.
But we are frittering away our advantages, which are being tied down by red and green tape and outdated and discredited ideology. All pushed on us by a Government addicted to taxing and spending.
It is now just over two decades since former treasurer Peter Costello paid off the country’s remaining $96b in public debt on April 21, 2006, dubbed “Debt Free Day”. That financial freedom has been thrown away.
Yes there were severe shocks along the path, such as the global financial crisis and COVID, both of which saw government spending pumped up. And that is exactly why longer-term spending discipline is needed — to be prepared for such shocks. But failure to be ready and just putting more spending on the nation’s credit card means money is wasted on interest payments, rather than being put to productive use.
As Mr Costello noted in April, it’s making the future for young Australians harder. “The debt doesn’t disappear, you’ve got to pay the interest bill on that every year. It comes out of their taxes,” he said.
All of which runs counter to the Albanese Government’s stated aim of promoting “intergenerational equity” through changing the housing tax policy mix to give more opportunity to first-homebuyers ahead of investors.
The best thing Dr Chalmers could do for future generations would be to ensure they are not saddled with a debt burden or high taxes and interest rates. Changing course would offer up another thought to add to the collection of phrases the Treasurer might find useful. Better late than never.
We won’t hold our breath.
