Australia expects an underlying budget deficit of $47 billion, or 3% of GDP, this year. It’s the sixth consecutive budget deficit.
Over the past 40 years government spending, adjusted for inflation, has increased from around $6,000 per person per year to $15,000 per person today.
Tony Shepherd, chairman of the Commission of Audit, says it’s unfair to saddle today’s children with the debts of their parents.
“With an ageing population, there will be fewer people of working age to look after the retired,” he says.
“They should not inherit our debt as well as the burden of looking after us.”
This chart shows where government spending is heading without intervention:
And this is where the revenue comes from and where it’s spent:
This shows growth in federal government spending on each of us:
And here’s how the large and fast growing spending programs impact:
Here’s what net debt looks like without taking any action to cut spending:
And here’s what revenue and spending looks like under the recommendations of the Commission of Audit:
And the improvement in net debt under the recommendations:
The Commission of Audit says:
“Without tightening, net debt will stay above its current level for the next decade. Having deteriorated by around 15 per cent of GDP since the global financial crisis, the danger is that a future macroeconomic shock would see Australia’s net debt level rise to levels not experienced for the past four decades.”
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