Australia’s recently announced 2023 federal budget has raised serious concerns about its impact on the average Australian household. One of the most pressing issues is the mounting government debt, which directly affects the country’s inflation and interest rates. As government debt rises, Australians are starting to feel the pinch. The removal of the middle and low-income tax offset means hard-working individuals will face a significant tax increase at a time when they are already struggling (1).
The surging government debt has ballooned from 4.7% of GDP in 2008 to a staggering 42.5% of GDP in 2021 (2). This alarming increase in debt has a direct impact on mortgage rates, burdening Australian citizens further. While some argue that immigration can help bolster the budget, One Nation opposes using this strategy as it leads to higher rents and mortgage repayments for Australians (3). Instead, the party advocates for expanding the mining sector to generate revenue for vital services such as schools, hospitals, and infrastructure.
The budget surplus projected by the Labor Party is partly based on increased revenue from various sources, including high commodity prices, employment rates, immigration, corporate taxes, higher wages, and inflation. (4). However, the rising popularity of Modern Monetary Theory (MMT) poses concerns. Advocates of MMT claim that government debt is not an issue since the government can print its own money. Historical evidence, however, shows that printing money to finance government expenses leads to hyperinflation and a decrease in the value of citizens’ savings and assets (5). One Nation’s economic plan aims to halt the practice of printing money to support the Australian economy.
In addition to debt and monetary policy concerns, the budget includes wasteful spending on unnecessary projects. Economists have labelled the budget as a “stimulus” budget, which will pressure interest rates (1). One significant expenditure is the Voice referendum, which has been criticized for its high cost and unnecessary divisiveness. Taxpayers will have to bear the burden of over 400 million dollars for a referendum that could have been allocated to more pressing needs (2).
Furthermore, the budget’s lack of funding for vital infrastructure projects is disappointing. Instead, the Treasurer has announced a 3-month review into infrastructure spending, raising concerns that essential projects may be scrapped. This uncertainty risks Queenslanders missing out on crucial infrastructure development. (3).
During parliamentary sessions, Senator Pauline Hanson brought attention to a notable discrepancy in the budget. While there is an allocation of 326.7 million dollars for women’s safety, there is no corresponding support or funding for male victims of domestic and family violence. This omission raises questions about the government’s commitment to addressing domestic violence comprehensively. (4)
Successive governments have been reckless with taxpayers’ hard-earned income. Australia must carefully consider the ramifications of mounting debt, inadequate infrastructure spending, and inflation on everyday Australians. Responsible management of these economic challenges is crucial for the nation’s long-term prosperity.
Sources:
7News, 10/05/2023
Institute of Public Affairs
ABC News, 03/04/2023
Financial Review, 09/05/2023
Forbes Advisor, 18/03/2023