In today’s Economic and Fiscal Update, Treasurer Josh Frydenberg announced that $270 billion in deficits will see Commonwealth gross debt grow to $850 billion by the middle of next year.
“The tragic humanitarian consequences of government-imposed COVID-19 lockdown measures, such as mass unemployment, depression, and social breakdown, will be felt for generations,” said Kurt Wallace, Research Fellow at the free market think tank the Institute of Public Affairs.
“Not only have young Australians disproportionately suffered from the scourge of unemployment, but they now face a colossal debt burden to pay back.”
“The $850 billion of gross debt forecast for the middle of next year will ultimately be paid back buy future Australian taxpayers. It will be young Australians who face reduced services and higher taxes.”
“Over 812,000 Australians between the ages of 15 and 24 are unemployed, underemployed, or have left the labour force since March. Getting Australians back into work by cutting red and green tape, reducing taxes, and making it easier for small businesses to take on new staff must be the priority.”
“Debt and deficits still matter. Interest rates cannot not be suppressed forever and giving up fiscal discipline and printing money to pay for debt will ultimately lead to inflation.”
“The only way to avoid higher taxes for future generations is to significantly reduce spending across all levels of government,” said Mr Wallace.
Recent IPA research estimated the real unemployment rate to be 11.7%, well above the official estimate of 7.4%, when those who have left the labour force since March and those who are employed but working zero hours for economic reasons are included.
IPA research also estimated that 355,000 Australians aged 15-24 years who were not in full-time education were also not working in June, the equivalent to 29.6%.