Our parliament has failed to address the ‘intergenerational theft’ that has contributed to a public burden totalling a shocking $90 000 debt per child. This seriousness of this debt has risen steadily in the last decade since Kevin Rudd reversed Australia’s budget surpluses and engaged in a massive program of overspending. and will continue to do so until the federal government’s debt is reduced and more sensible government spending is in place. The frivolous spending of the government needs to be cut drastically to scale back to impact and severity of this generational time bomb.
For instance, excessive regulation and wastage of taxpayers’ money on the childcare sector involves unnecessary training and qualifications for an industry not requiring such frequent government intervention.
Graphs from the Budget Papers indicate the alarming rate at which the debt is escalating, with the Commonwealth Gross Debt projected to reach $600 billion, also by 2020. This would account for over 30% of GDP, accumulating over $23 000 worth of debt per capita. Labor’s solution is riddled with taxes on hard working Australians, involving a hike in the capital gains tax and ‘restrictions on tax deductions for negatively geared investment property.’
These revelations come after the IMF’s scathing criticism of the Australian government’s poor management of debt and misguided models of funding. John Kehoe and Jacob Greber of the Australian Financial Review criticise both Labor and the Liberal party for relying far too heavily on the Reserve Bank of Australia. IMF data reveals that predictions made by Australian governments pertaining to budget surpluses in recent years were too optimistic. This is when compared with actual budget figures recorded by the IMF between 2011 and 2016.
Greber and Kehoe are spot on with their analogy to describe the current state of spending and debt in Australia:
‘Like an overweight person on New Year's Day, they slavishly renew their pledge to lose weight without ever saying how they'll do it. A year later, they return to the scales heavier still.’
It is absolutely imperative for Australia to return to budget surplus, as the state of the economy – and consequently, Australians – would be far better off considering the immense benefits our capital-importing country would reap.
The government has a spending problem. It must drastically reduce its spending in order to improve the budget and the health of the Australian economy. Childcare is merely one example of an area where the government can cut its spending, with Leyonhjelm suggesting that the ‘government should “fight” for the $13 billion in savings and its omnibus and childcare package bill.’ This is merely one of Senator Leyonhjelm’s propositions that could end up saving the Australian economy $1.1 trillion by 2027.
Australian governments need to stop the reckless spending that contributes to the increasing burden on each generation of Australians. This is an intergenerational theft that must be addressed to provide a source of stability for the country and financial security for younger generations of Australians.
Marija Polic is a Research Associate at the Australian Taxpayers' Alliance