Everyone needs to read this — It is no exaggeration to say that we are on the road to Greece.
An extract from Nick Caters column in today’s Australian, The Future We Cannot Afford
“….The proportion of the population who work and pay tax is shrinking while the number of retirees claiming pensions is growing. The day would come, the report predicted, when the government would have to pay for hospitals, care homes and pensions on credit.
When would that day arrive? “After about 15 years,” the report said. In other words, right now.
The Shepherd Review released yesterday confirms that government is already borrowing to pay its daily bills. The time for self-delusion is over; seven consecutive budget deficits and an eighth around the corner cannot be explained away as a mere fluctuation in the cycle.
We are running out of time to make the hard choices, the ones we’ve been putting off through wilful blindness or because of populist political headwinds that so far have proved impossible to overcome.
It all looked so easy in 2002 when Kevin Rudd was just another irritating Queenslander on the backbench, Wayne Swan had yet to release his inner Keynesian, and Julia Gillard was not yet a hostage of the service unions
The true cost of Labor’s six years of irresponsibility may never be known.
But it is clear we will be paying for its policy indiscretions long after the covered outdoor learning areas have crumbled.
Rudd’s vanity renewable energy targets more than doubled the price of electricity and eroded reliability, causing pain to households and driving businesses to the wall.
By the time Abbott came to power in 2013, the window for structural repairs was rapidly closing. Shepherd’s audit commission offered the Abbott government a choice: act on the evidence or wait for the tooth fairy.
And so, having spent the kids’ inheritance, the baby boomers are set to fleece them in their retirement by living off borrowed public funds they cannot possibly repay.
The reckoning is coming and, one way or another, it will be ordinary working Australians who pay. The Business Council of Australia says taxes would need to rise by an average of more than $5000 a household just to plug a gap of that size, and even higher taxes would be needed to start paying off debt.
Or we could slash government services by $50bn, the equivalent of one-third of today’s social security budget or almost the entire education and defence budgets combined.
Or we can carry on as we are, brushing past the facts, chipping away at the sources of our prosperity, immersed in fashionable delusions and raiding the teapot…”
Nick Cater is executive director of the Menzies Research Centre. The Shepherd Review: Statement of National Challenges is available at menziesrc.org.