Australia’s $1trillion debt disaster: How Labor and the Coalition blew the nation’s fortune – and have left young Aussies to pay the staggering bill for decades: Peter van Onselen
Daily Mail columnist Peter van Onselen argues that Australia's federal debt is set to surpass $1 trillion, describing this as the result of decades of fiscal mismanagement by both the Labor and Coalition parties. He contends that successive governments of both persuasions have prioritised short-term spending and vote-winning measures over budget discipline, leaving younger generations to shoulder the long-term cost of servicing the growing debt burden.
The piece frames the debt trajectory as a bipartisan failure rather than the fault of any single party, pointing to years of deficits, big-ticket spending commitments and reluctance to make unpopular structural reforms. Van Onselen warns that the scale of the liability will constrain future budgets and disproportionately affect younger Australians, who will be paying it down for decades to come.
- Australia's national debt is approaching $1 trillion.
- Columnist blames both Labor and Coalition governments for the blowout.
- Younger Australians will bear the cost for decades.
New here? Start with this
Australia's federal government, like most developed nations, borrows money to cover the gap between what it spends and what it collects in tax, and this accumulated borrowing is known as government debt. Successive governments, led by both the Labor and Coalition parties, have overseen years of budget deficits, meaning spending has regularly exceeded revenue, causing this debt to grow steadily over time.
The two major parties dominate Australian federal politics: Labor is generally seen as centre-left, while the Coalition, made up of the Liberal and National parties, is generally seen as centre-right. Both have held government at various points over recent decades and have made decisions on spending, tax and borrowing that have contributed to the current debt level.
This matters because government debt has to be repaid with interest, and that cost is typically met from future tax revenue, meaning it can affect budgets and living standards for years to come. As the debt figure approaches a significant milestone, questions about who bears the burden of repaying it, and how it affects different generations of Australians, have become a wider point of public debate.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Those alarmed by the trajectory argue that persistent deficits and mounting interest costs are not abstract accounting problems but a genuine transfer of burden onto younger and future taxpayers, who will fund debt servicing instead of services they might otherwise benefit from. They contend that both major parties have avoided hard structural reforms to tax concessions, spending growth and entitlements because such reforms are politically costly, and that this bipartisan reluctance to confront the problem now risks a much harder reckoning later, including reduced fiscal flexibility to respond to future shocks such as recessions, pandemics or defence needs.
The case against
Others argue the '$1 trillion debt disaster' framing overstates the danger, noting that Australia's debt-to-GDP ratio remains comparatively low by international standards and that borrowing has funded productive investment such as infrastructure, healthcare and pandemic-era income support that protected households and businesses from deeper harm. They contend that responsible governments must run deficits during downturns or crises rather than pursue austerity that could damage growth, and that focusing on debt totals in isolation, without weighing what the spending achieved or Australia's capacity to service it, produces a misleadingly bleak picture.