Federal Budget 2025: Structural Deficit Failure?

Federal Election 2025

Australia is on track for 25 years of deficits – teenagers who started high school this year have never seen a budget surplus and probably won’t until they are through university.

The structural deficit is expected to be about 2 per cent of GDP, or nearly $50 billion every year, by the end of the decade.

And without action, the problem will get worse because population ageing means more spending on health and aged care, and climate change means more natural disasters such as bushfires and floods.

Continually adding to national debt by running sizeable deficits reduces the government’s room to respond to future economic shocks and pushes the cost of today’s spending onto future generations. Grattan Institute

While the US is hoping Elon Musk's "hack and slash" approach will resolve its structural deficit problem, it is unlikely to succeed because the lobby industry will not allow it to tackle the big ticket items like defence spending, agriculture subsidies and cost of healthcare. Think Big Ag, Big Pharma and the Military Industrial Complex.

In Australia, the major parties have opted for the 'head in the sand' approach to resolving its structural deficit problem.

Wedged between lobby group pressure on one side and political expediency on the other, they both opt for 'sugar hit' budgets like the one delivered by Treasurer Jim Chalmers.  

The message is simple. Australia's economic outlook is set to worsen and living standards to fall unless action is taken.

Open democracy provides a new forum for a frank and open discussion and debate on Australia's economic future, away from the trolls and the bots, starting with the most important question the major parties avoid at all costs.

The next Australian government must take immediate and effective measures to address the structural deficit issue and not burden future generations with excessive debt and the current generation with increasing cost of living.

This should start with reigning in government spending and waste, identifying and correcting mismanagement and exposing and dealing with outright corruption?

(AGREE/DISAGREE)

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