“If you or your children plan on being alive in 40 years, you may want to start working on a backup plan.”
That is the grim warning issued by Dr John Humphreys, Australian Taxpayers’ Alliance Chief Economist and University of Queensland economics lecturer.
New modelling reveals Australia’s debt is growing at an increasing rate and is on track to trigger national bankruptcy by 2065.
Based on current information, the debt model indicates the country’s total net debt will rise to match-and then surpass-GDP in 45 years.
Dr Humphreys said the numbers represented a bigger threat to Australia’s prosperity than either Covid or climate change.
“These numbers can seem abstract and far removed from everyday life but it’s a significant and alarming situation,” Dr Humphreys said.
He said the debt was expected to hit $916 billion by June 2022.
“This amounts to 42% of Australia’s GDP, or just over $35,000 for every man, woman, and child in the country,” he said.
The modelling is based on current data, including the latest budget papers from state and federal governments.
“During the past week alone, Australia’s net public debt has increased by $2.7 billion,” he said.
“Next week it will increase by another $2.7 billion and this trend is set to continue.”
Dr Humphreys said the situation was urgent.
“The longer we wait to address our debt problem, the harder it will be,” he said.
“Yet politicians seem content to put this issue in the “too hard” basket for now, safe in the knowledge they will have retired from politics before the debt bomb explodes.
“It is often noted how we are leaving a growing amount of debt for the next generation to repay.
“The more dramatic interpretation is that we may be leaving them with so much debt they will never be able to repay it, resulting in an eventual financial crisis and economic collapse.”
Since 2011, the Australian Taxpayers’ Alliance has advocated for everyday Australians against everything from irresponsible to downright corrupt government moves.
The ATA is a grassroots advocacy group fighting for smaller government, more transparency and less bureaucracy.