Treasurer Jim Chalmers has lost control of the budget
The Albanese government’s decisions on net have added to the national debt as a share of GDP well over three times that of the former Coalition government over the same period.
In the Ernest Hemingway novel The Sun Also Rises, Bill Gorton asks Mike Campbell, “How did you go bankrupt?” He replies: “Two ways. Gradually and then suddenly.” As it is with governments.
While the unfunded levelling up of government spending since the pandemic has stoked the inflation fire, the threat it poses will remain long after inflation burns out.
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Steven Hamilton is assistant professor of economics at George Washington University and visiting fellow at the Tax and Transfer Policy Institute at the ANU.
