Australia’s former top treasury official has delivered a blunt warning about the nation’s finances and accused successive governments of losing sight of the dangers posed by persistent defecits and rising spending.
Martin Parkinson, who served as treasury secretary and later secretary of the Department of Prime Minister and Cabinet, said both Labor and the Coalition had failed to adequately confront Australia’s long-term Budget position.
He questioned whether the Albanese government could realistically deliver a sustained return to surplus, arguing the economy should be generating stronger Budget outcomes at this point in the economic cycle.
“It’s almost like debt is not an issue for anybody anymore because the concern dissipated during the COVID crisis and nobody’s ever refocused on it,” Dr Parkinson told the Australian Financial Review.
“Where we are in the economic cycle, we should be running significant structural surpluses, and yet we’ve got a structural, and headline, deficit.
“If we take the Budget papers as correct, it takes a decade to get back to a headline surplus. Even then, we get a surplus in part because of the assumptions on terminating expiring programs. But we know terminating programs don’t always terminate.
“We are consuming today, and our children are going to pay for it with their tax burden.”