Australia’s Largest Christian News Site

With rising debt and vague promises, both Labor and the Coalition are sidestepping hard reforms as global threats grow.

The 2025 election campaign has been characterised by two major parties that have completely avoided doing or saying anything that might spook the electorate when it comes to cuts to spending.

Labor was far worse, putting more and more Commonwealth obligations on the $1.2 trillion national credit card, including proposing to pay off student loans, subsidising the energy bills of the rich and the poor, helping out with the wages of private childcare and aged-care providers, and stubbornly refusing to rein in a National Disability Insurance Scheme (NDIS) that is now more expensive than Medicare.

The Coalition was not much better, promising to match every Labor promise, ruling out cuts to services, and even backing down on paring back the public service, instead promising to work at reducing its numbers through natural attrition.

The Coalition is at least flagging major tax reform, but, like Saint Augustine, it is an end goal, not an immediate resolution: not just yet.

John Howard’s was the last government to embark on any serious tax reform, but he had to clean up Labor’s mess first as well.

“A Coalition government will move as quickly as we can to look at long-term reform of the tax system, to give Australians aspiration and reward hard work,” Opposition Leader Peter Dutton declared. “ We will do this at a time where the budget can afford to do so.”

Former treasury secretary Ken Henry and lead author of the major taxation review commissioned by the Rudd government over a decade ago, urged indexation of personal income-tax scales in a speech in February.

“Young workers are being robbed by a tax system that relies increasingly upon fiscal drag,” he said. “Fiscal drag forces them to pay higher and higher average tax rates, even if their real incomes are falling.”

Without indexation, it is estimated that the average tax would rise from around 24 per cent to an all-time high 28 per cent, squeezing living standards and diminishing incentives to work and save, according to economic modeller Chris Murphy at Murphy Economics.

Promises, Promises

Elections in Australia are based on trying to placate every demographic with something, or at least not taking away from them something that they have already.

Labor’s policy of reducing student HECS debt is simply bad policy. Why this cohort? And why should we make future taxpayers pay to reduce their student debts just because they lived during the Anthony Albanese era? And wasn’t it a Labor government that introduced the policy of having university students contribute to the cost of their education?

Labor has recognised that government debt is not a major concern in the electorate and is – like the Victorian and Queensland Labor governments – prepared to put the nation into hock for decades to pay for its programs, including subsidising renewable energy projects.

Meanwhile, the most neglected area of government in terms of serious spending is defence. The Australian’s Greg Sheridan, among a few others, has been sounding the alarm bells for many years, but has become more strident recently faced with the complete lack of interest that the Albanese Government has shown in the issue.

National Insecurity

“Trump has made it clear; allies have to look after themselves to a large extent,” Sheridan said. “Britain has just gone up to 2.5 per cent of GDP, Germany has revolutionised its national debt rules so that it can fund defence, and they’re surrounded by allies.

“Here we are, sitting alone, with a massively menacing China.”

Sheridan has not been complimentary of the Coalition either. He has said that Dutton has been tongue-tied on what Lenin rightly judged to be the only question that matters: “What is to be done?”

The Coalition has made no case for specific defence capabilities. It should at the very least have committed to raise defence spending from its paltry 2 per cent of GDP to at least 2.5 per cent within three years, and 3 per cent by the middle of a second term. (GDP spending is a proxy for commitment.)

Yet Australia has seen China warships brazenly menacing our shores, and Russia wanting to set up an air base in Indonesia, just 1,200 kilometres from Darwin.

Has there ever been a time in recent history when both major parties have their spending priorities so wrong?

___

Republished with thanks to News Weekly. Originally titled ‘The Government of the Undefendable by the Indefensible For… Whom?’. Image courtesy of Wikimedia Commons.