We Need a Treasurer Better than Costello
September 2026As great a man as he was and still is, we need a treasurer (far) better than Peter Costello to tackle the task ahead.
Compare Costello's Conundrum to Canavan's
Costello, when he entered the job as minister for the first time, faced a Federal Government debt of just over $100 billion. The GDP of the nation was around $500 billion. Gross debt was officially 20% of GDP.
In this financial year 2026/27, Labor and Chalmers' cabal will kindly leave Australians with $1,051 billion in Federal debt obligations. That's $51 billion above $1 trillion, or almost 35% of GDP. Yes, that is just the federal debt.
Labor has also kindly left us with ten years of forward-looking budget commitments (deep deficits), and that debt is on a current trajectory heading towards north of $1.5 trillion.
Other things that have a huge impact on the Australian budgets moving forward.
Productivity:
It was booming in the mid-1990s thanks to the microeconomic and structural reforms that both Labor and the Coalition agreed to in the early 1980s to the mid-1990s. In dismal contrast, the last decade, 2016 to 2026, was like a dead horse — it has not moved. We are in a productivity crisis. The efficient and productive economy Costello inherited was taking off in a fast way as he took over, not because he took over the treasury. The mining boom, the royalties (states), the best-ever commodity prices and terms of trade, and company tax revenue made tax cuts possible as he ran up surpluses. The next decent treasurer won't have that benefit to walk into, as there has been next to no decent economic reform in decades.
Federal Government Assets:
It was easy (financially, not politically) for Costello to sell around $100 billion of federal government assets (Telstra, Commonwealth Bank, airports and lots more) in order to pay off the $100 billion of previous governments' debts and be debt-free in April 2006. He also created budget surpluses through spending restraint, but the bulk of the work was through asset sales.
Today, there are next to no assets the Federal Government can sell. (I am not arguing for a sell-off of any Defence land or the Future Fund — but that is the majority of the assets).
State Government Assets and Liabilities:
Back in the mid-to-late 1990s, states' debts were close to zero after leaders like Victorian Premier Jeff Kennett sold off their electricity grid and other assets to pay down debts. States ran a tighter ship back then.
In 2026/27, the states and territories are collectively in over $700 billion of debt, with few assets left to sell to pay down their enormous obligations and no dividend returns each year to pay for ongoing services. Crippling annual interest costs take money away from roads and hospitals.
Victoria takes up the bulk of all state debt, and according to our Constitution, the Federal Government (therefore all Australian taxpayers) takes on the responsibility of a state's debt if they are unable to pay and default. Because of how many federal seats are in Victoria, no federal government will let them suffer when so many seats are at play — there will be an expensive bailout on the way.
Demographic Time Bomb:
In 1996 and the decade following, all of the largest, most impactful generation in Australian history, the Boomers, were in the workforce earning peak incomes and paying Costello a lot of income tax. Gen X were almost all adults by that year and were also adding to the supply, and the Greatest Generation were still a strong influence in the workforce.
In 2026, the oldest Boomer is 81, and almost all the Boomers will have left the workforce, with all their skills and income tax disappearing. We are replacing a generation that had 3.5 births per woman with the current generation of 1.4 births per woman.
With an ageing population, the health and aged care costs are growing at a rapid rate. At the same time, the tax base is shrinking. According to the 2010 Intergenerational Report, Australia had 7.5 workers per retiree in 1970 — a figure projected to fall to just 2.7 workers per retiree by 2050.
The budget blowout from this demographic time bomb has already begun.
Culturally:
Compared to 1996, the population now has an overwhelmingly greater expectation of the government to pay for more things, rather than paying for them themselves. Dependence, mental health problems, education standards, and so many other measures are very concerning.
It could be argued we are in a much worse state than we have ever been. Roy Morgan and other polling reported in 2026 that between 64–70% of Australians think we are on the wrong track.
The collective motivation of a nation's labour force is the best predictor of future standard of living. For many, it is so much easier to sponge off the government than to start something and financially support yourself, your family, and your wider community, like I have.
It has never been easier or more popular for those with the "ABCDE" — ambition, belief, capital, drive, to emigrate — to set up a new business and move to a lower-taxed country. There goes a chunk of the tax base, where 15% of taxpayers pay about 70% of all income tax.
In Conclusion:
There are problems facing Australia, and the future is a deep concern. But there are opportunities, ideas, solutions, and people willing and able to implement them. Pay close attention to the next two weeks of my campaign, which shows Nathan Jones is the best-placed person to represent the NSW National Party in the Senate.
Nathan Jones