Federal election 2025: The Advertiser People’s Cabinet sounds alarm on government debt

Another Whyalla-style economic rescue will be hampered by government debt, experts warn, leaving a crippling burden for future generations.

Government debt skyrocketing into the trillions is crippling capacity to deal with “the next Whyalla” bailout and other economic shocks, The Advertiser People’s Cabinet has heard.

Raising alarm about the repayment burden for future generations, People’s Cabinet Treasurer Adrian Tembel and Foreign Affairs Minister Alexander Downer warned governments were left without financial muscle to deal with crises.

Mr Tembel, also the South Australian Productivity Commission chairman, questioned the capacity to fund another rescue package, like the $2.4bn being pumped into Whyalla and the steel city’s crisis-ridden steelworks.

“What it does do is mean that we’ve got less capacity to respond to the next Whyalla. … What happens when Port Pirie is under similar levels of pressure or there’s another financial event or an external shock that impacts on our farmers or on copper or our other exports?” he said.

The Advertiser People’s Cabinet: Department Of Panda Efficiency, Paul Starick, Treasurer Adrian Tembel, Youth Minister Sargunpreet Kaur, Foreign Affairs, Climate Change and Energy Minister Alexander Downer. Picture: Brett Hartwig

Mr Downer, a former federal Liberal leader, accused federal politicians of “reckless indifference” by carelessly making multibillion-dollar promises with borrowed money and leaving the bill for future generations.

The Department Of Panda Efficiency’s calculations show repaying Australia’s $1.22 trillion gross federal debt, even at annual net interest payments forecast in the budget of $28.1bn, would take 44 years – the equivalent of two to three average giant panda lifespans.

The-then foreign affairs minister Alexander Downer (left) with prime minister John Howard during federal parliamentary question time in August, 2002.

Mr Downer, a key member of the Howard government that paid off federal debt, said if he was a candidate for the May 3 election he would “level with the public” and declare there was no money to meet “demands for ever-increasing public sector spending”.

“You know how politicians like to talk about your children and your grandchildren: ‘Blah, blah, blah, prepare for the future’. All they’re preparing for the future is a huge debt bill for these people to pay,” he said.

“Our children and our grandchildren are going to be spending a bigger proportion of public finances simply on servicing the debts that we have run up, for example, at the 2025 election.

“Great. I mean, we all go out and vote for the people who offer us the most money. By the way, be warned, it’s borrowed money, and you love your children and you like to talk about how you’ll care for your children, you are leaving them with this huge debt to pay off one day.”

South Australian Productivity Commission chairman Adrian Tembel. Picture: Matt Loxton

Mr Tembel said his concern, at a state level, was that the government was “almost in a permanent position of borrowing”.

“We’ve got borrowings forecast for at least the next, say, six to seven years based on current projects. I will be shocked if there aren’t further infrastructure needs or hospital needs post that,” he said.

“ … That (borrowing) can’t go on in perpetuity. It will be borne by everyone eventually, through interest charges that just weigh us down to such an extent that it permanently depresses our standard of living.”

Originally published as Federal election 2025: The Advertiser People’s Cabinet sounds alarm on government debt