Australia’s trillion dollar debt problem is an ‘intergenerational tragedy | Caleb Bond
The people who will have to pay for this mess have had no say in creating it, writes Caleb Bond.
Let’s talk about debts, baby.
Let’s agree that nothing’s free.
Let’s talk about all the good things (but mostly bad things) done with our money.
OK, Salt-N-Pepa probably won’t record that one – but we do need to talk about it.
Federal opposition treasury spokesman Ted O’Brien tried this week at the National Press Club, where he argued that passing on big government debts and deficits to the next generation was unfair and the greatest driver of intergenerational inequity.
Of course, he’s right – he described it as an “intergenerational tragedy” – but does anyone care? It doesn’t seem so.
We’re hurtling towards $1 trillion of federal debt this financial year and no one is talking about it. Well, not quite literally, there is Mr O’Brien, but almost no one.
When, in any political conversation you’ve had with someone in the past six months, have you heard someone talk about our ballooning national debt?
They might talk about their own debt and the cost of living but $1 trillion barely rates a mention. Even more extraordinary is that for the first time in its 38-year history, the Australian Election Study has found Australians rate Labor as better economic managers than the Coalition.
The one thing the Coalition has always been able to hold on to – that they don’t go berserk with the credit card – has suddenly evaporated.
It’s like we’ve all forgotten that debt exists.
Or perhaps we’ve all decided that we’re going backwards financially anyway, so who cares if we just keep running up the bill? I’ll tell you who cares – me.
Even if I’m the only one who still cares, I will kick and scream until you all come along with me because it’s all good and well to put everything on credit now, but do you know whose door on which the debt collector will be knocking?
Mine. Or my future children’s, the poor little tackers.
The great thing about personal debt is that upon death, once all your assets have been liquidated, it disappears into the ether.
Not so with government debt, which passes from generation to generation.
In 2007, when John Howard and Peter Costello wound up their reign over the books, we had $53.2bn of gross government debt, equal to 4.7 per cent of GDP. Today it is $928.6bn, 32.7 per cent of GDP.
As much as you might like to think that the money never runs out, eventually it does and people expect their loans to be repaid.
Why should a kid born in 2007, when the debt to GDP ratio was seven times smaller, now be forced to face an adult life in which the government will have to find a way to pay off this ballooning debt?
They had no choice in the matter – that is the fundamental unfairness of spending for the now without any regard for the future.
And while Mr O’Brien may talk about this “intergenerational tragedy” and the need to rein in debt, talking the talk is one thing and walking it is another.
Not since Tony Abbott and Joe Hockey tried it on in 2014 has there been any whiff of austerity – principally because the greedy masses complained about the cost cutting and the government was forced to scrap most of its budget measures.
So some go on merrily enjoying the welfare state, while others pay more and more tax due to bracket creep and we make up the difference with ever-growing debt.
But if you care about your children and grandchildren, you need to demand something is done about debt. Our collective selfishness must end.
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Originally published as Australia’s trillion dollar debt problem is an ‘intergenerational tragedy | Caleb Bond
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