By Megan Shellie
This article was published by the Sydney Morning Herald here.
Most Australians will be dead before we reach surplus, remarked former treasurer Peter Costello on the ABC’s7.30. Excluded from this sweeping statement are the young people inheriting our country. Young Australians will bear the brunt of the hundreds of billions of dollars of debt incurred before we could even vote, in one of the greatest acts of intergenerational theft committed in this country.
You don’t have to read far or wide to know that the future is uncertain for young Australians. Recent reports highlight the belief that 40 per cent of current university degrees will be obsolete within the decade. With an ageing population, more of Australia’s social welfare pool is being directed towards elderly Australians, arguably away from programs like Newstart and Youth Allowance. Add global issues of climate change, democratic instability and technological disruption, and you could forgive the average young Australian for feeling more than a little anxious. We will live in a very different world, and young people are rightly concerned that we won’t be in a position to face it.
The 2018 budget’s response was deafening silence on these issues. Marked as a budget around tax, the $10 per week tax cut for the average Australian comes with a big price tag, $140 billion over 10 years.
Other measures might eventually put Australia into the black, years after both sides promised it would occur, but the budget comes with a price tag that should sound alarm bells for all young Australians concerned about themselves and their children. Routine budget commentary focuses on the "winners and losers", a snapshot of the good and the bad from that year, feeding into the election-cycle mentality of haggling for votes, with little concern for longer term strategies. Continuous silence on issues concerning young people mean we are the perpetual losers of post-GFC politics. Absent from the budget is long awaited Newstart increases, a change which even John Howard agrees is overdue. The budget had no tangible action plan on reducing youth unemployment or tackling systemic issues in home ownership, nor rental affordability and stability. In giving young people an extra $10 per week in tax cuts, if they pay tax at all, the absence of action on intergenerational fairness issues has yet again left young people short-changed. Debt is a burden passed onto the young, and Grattan Institute research shows that each year the government runs a $40 billion deficit, it increases the lifetime tax burden for households headed by a person aged 25 to 34 by $10,000. There have been no significant tax reforms since the Howard era’s introduction of the GST. Prominent economist Saul Eslake states it’s difficult to see anything fair about the redistribution of income and wealth from younger and middle-aged adults to the old. Taxation policy in Australia is in a slow but marked decline, and is in desperate need of review and rebalancing. Without significant reform, young Australians will continue to be on the back foot, saddled with debt before they’ve even had an opportunity to embrace the future.