Scott Morrison has blasted Labor for endorsing an “intergenerational theft” that has quadrupled the public debt burden on Australia’s children to more than $90,000 each since the financial crisis a decade ago.
Federal government debt for every Australian aged under 18 — the generation that will shoulder much of the burden of repayment — is on track to exceed $100,000 within three years, according to analysis by The Australian.
The Treasurer slammed Labor’s refusal to back the government’s reforms to childcare and family payments yesterday, which would make $3 billion of savings over four years.
“The option put forward by those opposite is intergenerational theft,” he said in answer to a question from opposition Treasury spokesman Chris Bowen.
“What they are saying is they want to keep expenditure higher — higher — and they want to send the bill to their children.”
Australia’s gross public debt is on track to rise from $474bn as of last month to more than $600bn within the next three years — even including the government’s reform measures — which will amount to around $23,500 a person. Such calculations include swaths of the Australian population who will shoulder little of the debt repayment.
There are 5.5 million Australians aged under 18 who can’t yet vote, and 3.3 million aged over 65, who can, according to Australian Bureau of Statistics population estimates. The debt burden per capita and per Australian under 18 has exploded since the financial crisis from $2600 and $11,100, respectively, to $20,300 and $90,300.
Teenager Lily Utteridge said the idea of a debt burden creeping above $100,000 each for the next generation was “like, scary thinking that that’s what we’re eventually paying off,” she said.
The 18-year-old, entering her second year of a business degree at the University of South Australia, said she would already be burdened with a $50,000 personal HECS debt once she graduated and would probably have to look interstate or overseas for work opportunities.
“If anything, I’m one who comes from a background of privilege,’’ she said, adding that the debt burden would have an impact on the futures of children from disadvantaged backgrounds. DOWNLOAD THE GRAPHIC: Generational time bomb
The government’s 2015 Intergenerational Report projected that federal net debt would continue to rise over the next three decades to more than 50 per cent of GDP, up from 18 per cent this year, while budget deficits would blow out to almost 6 per cent of GDP.
“We are going to continue to pursue budget repair that ensures that the current generation that receive benefits can also be the ones who pay for those, ensuring that expenditure is affordable,” Mr Morrison said. “Those opposite just want to keep on spending and spending and spending.”
Labor’s counter proposals to restore the budget to surplus rely largely on increases in capital gains tax, and restrictions on tax deductions for negatively geared investment property.
While the government’s omnibus bill aims to save money in net terms, it proposes higher spending on childcare, the cost of which is projected to swell 50 per cent to $12bn a year by 2020, according to the government’s budget figures.
Total spending on family tax benefits, meanwhile, will shrink from $19.3bn to $18.5bn.
Interest payments on federal government debt are projected to increase to $18.7bn a year by 2020, up from $3.7bn in 2007, but could prove higher if interest rates continue to rise. The government’s borrowing costs have already risen since November from about 1.8 per cent to 2.7 per cent.
The savings debate follows criticism of the government’s budget management framework by the International Monetary Fund, which said revenue had failed to live up to expectations since the financial crisis. The promised return to budget surplus is not due until 2021.
