Australia's debt crisis worsens; reform needed urgently

Australia's government debt has increased sharply over the past two decades. According to OECD data, Australia now has the fastest-growing debt among developed countries. Twenty years ago, the country's gross public debt was 15% of its GDP. Today, it has risen to nearly 60%, a significant jump. This rapid increase in debt is partly due to spending during the global financial crisis and the COVID-19 pandemic. While both major political parties contributed to the situation, neither has effectively addressed necessary reforms to the economy. In fact, the upcoming federal budget is expected to reveal ongoing deficits for the next four years. Many Australians support increased government spending to help with the cost of living. Yet, this attitude creates a barrier to implementing measures to control debt. The Albanese government had some budget surpluses, but they are small compared to the predicted debt growth in the coming years. Political pressures make it hard to cut spending, as many Australians rely on government services. Government proposals to cut budgets often face backlash from voters and minor parties in the Senate. These parties tend to block spending cuts but rarely oppose new spending. Former officials have criticized the lack of meaningful reforms in Australia's taxation system. A cooperative approach among political parties is suggested to foster discussion on reform, similar to tax summits held in the past. Without significant changes to debt management and spending, Australia may face economic challenges down the road.