Young Australians will certainly be feeling this budget for decades to come – but not in a good way | Caleb Bond

There are about one trillion reasons this will actually prove to be a budget for the ages, writes Caleb Bond.

Jim Chalmers’ third budget delivered big for young people.

Debt, deficit and higher taxes, that is.

Within 30 seconds of opening his mouth on Tuesday night, Dr Chalmers was delivering trite statements.

“This is a budget for the here‑and‑now and it’s a budget for the decades to come,” he said.

It’s barely a budget for the next few months given it is so bereft of any vision or futureproofing beyond the next election.

But you can argue that it is a budget for the decades to come.

It’ll take at least that long to pay off the government’s ever-growing gross debt – now set to exceed $1 trillion within a year.

Dr Chalmers will be long out of parliament when my generation has to wrestle with this debt.

There’s nothing wrong with debt that delivers a long-term return on investment.

Most of us do it in the form of home loans.

Federal Treasurer Jim Chalmers delivers his post-budget address at the National Press Club in Canberra. Picture: Tracey Nearmy/Getty Images

But you cannot keep growing that debt and expect it to come without consequences.

It has to be repaid at some point.

Interest repayments alone will grow 57 per cent from $22.7 billion this financial year to $35.6 billion in 2027-28.

And that comes at the same time as extraordinary growth in tax receipts.

Total tax revenue jumped 12.1 per cent last financial year and is expected to be up 6.2 per cent by the end of this financial year.

It is expected to grow another 15.5 per cent between 2024-25 and 2027-28 – up $100 billion.

Income tax grew $30 billion from last financial year and will actually go backwards by $2.4 billion next financial year due to stage three tax cuts.

But that is quickly made up, with another $80 billion added by 2027-28.

This is where the budget hits young people in particular.

Labor’s stage three tax cuts do, to some extent, address bracket creep – whereby your income goes up but the tax brackets don’t move with it – but nowhere near as much as the tax cuts they promised before the 2022 election.

The original stage three cuts would have abolished the 37 per cent tax bracket, putting every dollar earned between $45,000 and $200,000 at a flat rate of 30 per cent.

The revised version has been sold as a tax cut for everyone, which it is – for now.

In reality, it ensures that bracket creep continues, thus the government increases its tax receipts while pretending it has delivered a tax cut.

Those most hurt by that are young people building their careers, whose income will rapidly increase with promotions in the next 15 years.

They will, thanks to unaddressed bracket creep, end up paying a larger proportion of their lifetime income in tax than anyone else.

So we’ll have to pay more tax than those who came before us and we’ll have to saddle their debt on our shoulders.

At least the worst case scenario when your parents die is that they’ve spent all the money and you get no inheritance.

If there’s any debt leftover once the assets have been sold, it’s no skin off your nose – the bank has to cop the loss.

When a government dies, you discover they’ve spent all the money and then they hand you the maxed-out credit card to repay.

Thanks for nothing.

Originally published as Young Australians will certainly be feeling this budget for decades to come – but not in a good way | Caleb Bond