Coalition claims we’ll owe $125k per household by 2028 if Labor wins election

The Coalition is ramping up its attack on Labor’s “spending splurge” and economic management with a stark warning on the nation’s debt burden.

The nation’s debt bomb is forecast to reach such extreme levels during the Albanese government’s next term in office that debt and interest payments would equate to more than $125,000 per household come 2028-29, according to Opposition analysis.

The Coalition is ramping up its attack on Labor’s “spending splurge” and economic management, as the figures show debt per household will be more than $32,000 higher than when the former Coalition government were in power.

Last week’s federal budget shows Australia’s gross debt will reach a massive $1.2 trillion in 2028-29, when interest payments will hit $38.2bn.

This means government debt per household would soar to $122,300, and interest payments on that debt would rise to $3822 per household in 2028-29, if Labor secures a second term in office.

Coalition analysis shows debt for each of Australia’s 10 million households will have increased $32,755 – or 36.6 per cent over seven years – and interest up $2080, compared to 2021-22 when the Morrison government was in office during the Covid pandemic.

Opposition treasury spokesman Angus Taylor accused Labor of being “addicted to spending” and sending the country further into debt”.

Opposition treasury spokesman Angus Taylor. Picture: NewsWire / Martin Ollman

Mr Taylor claimed Prime Minister Anthony Albanese was engaging in a “shameless vote-buying exercise for the next five weeks not a plan for the next five years”.

“Spending under Labor is now higher than during Covid, with interest payments set to double compared to the Coalition’s last budget,” Mr Taylor said.

“Labor’s economic mismanagement has not only seen the worst collapse in Australians’ living standards in history, it’s also leading to record debt with no plan to pay it back.

“We will rein in wasteful spending that fuels inflation and reduce tax, red tape and the control of union bosses over small businesses.”

Prime Minister Anthony Albanese on the campaign trail. Picture: Jason Edwards/NewsWire

In 2021-22, debt per household was $89,525 and interest payments per household was $1742 under the Morrison government.

But debt per household had skyrocketed 118 per cent compared to 2014-15 when the Abbott government was in office.

Then, debt per household was only $40,970 and the interest payment per household was $1547.

A Coalition campaign spokesperson said Covid, lower mining tax revenue, and increased structural spending on health, aged and disability care, and defence were behind the debt increase.

A decade on, debt per household is now $94,000 and interest per household is $2441.

Federal Treasurer Jim Chalmers. Picture: NewsWire / Martin Ollman

Treasurer Jim Chalmers said “the Liberals left us a trillion dollars of debt during a decade where they racked up deficit after deficit.

“In less than three years, we’ve turned two big Liberal deficits into two Labor surpluses, shrunk this year’s deficit, reduced Liberal Party debt by $177 billion and saved Australians billions in interest costs, while also delivering substantial cost-of-living relief. Debt is $17,700 lower per household that what was projected by the Liberals.”

Economist Saul Eslake.

Independent economist Saul Eslake said Labor had inherited a debt and interest burden that was on a “rapidly rising trajectory” but had also made decisions that added to the debt.

Mr Eslake said hard decisions to address the nation’s debt should be made sooner rather than later because he struggled to see how you could cut government spending by enough.

“The Coalition wants to sack 40,000 public servants – that would reduce government spending by one percentage point,” he said.

“(The major parties) are both trying to kid the people that they can actually pay less.

“Whereas the reality is, if they want the spending that the public clearly wants, or the spending that they’re going to have to have whether they want it or not, then someone’s got to pay for it.”

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Originally published as Coalition claims we’ll owe $125k per household by 2028 if Labor wins election