Millionaire Mark Bouris has warned the Albanese government’s borrowing will leave Australians’ children and grandchildren with the debt, arguing a recession may be the only way to bring inflation under control.
uncertain
recession → warn → control
Australian Bureau of Statistics figures released on Wednesday showed inflation had climbed to 4 per cent, just a day after the Reserve Bank lifted interest rates for the fourth time this year.
asserted
Bank → release → time
In response, Bouris said the Labor government was living beyond its means by spending more than it collects in tax and borrowing billions to cover the gap, as Australia’s gross debt exceeded $1 trillion in August for the first time.
asserted
debt → say → time
'The government is spending 26.9 per cent of GDP, that's the highest share of the economy any Australian government has ever spent,' he told Nine's Today show on Wednesday.
asserted
he → spend → Wednesday
Yet it only raises 24.1 per cent of GDP through tax.
asserted
it → raise → tax
So there's a gap every year and, you know how we fill that gap...We borrow it.'
asserted
We → be → it
The entrepreneur argued government deficits were adding demand to the economy at the same time the Reserve Bank was trying to cool inflation through higher interest rates.
asserted
Bank → argue → rates
'What if I said to you, "Why are you out there spending all your family's money, all the money you earn, buying televisions, going on trips to Bali, having barbecues in the backyard, and there's a gap between what you earn and what you spend, so you borrow the money?"' Bouris said.
asserted
Bouris → say → money
'And when you pass away, your kids are going to inherit that debt.
asserted
kids → pass → debt
What do you think that means for your kids?
asserted
that → think → kids
That means your kids are going to have to pay off your debt for the rest of their life.
asserted
kids → mean → life
Mark Bouris (pictured) has warned the Albanese government's borrowing will leave Australians' children and grandchildren saddled with the bill
asserted
borrowing → picture → bill
The Albanese government argues spending measures are helping households manage cost-of-living pressures, while funding commitments in health, aged care, defence and the NDIS have pushed expenditure higher
'
asserted
funding → argue → expenditure
That's what's happening in our country right now.
asserted
what → happen → country
Our government is spending more than it receives, so it has to borrow.
asserted
it → spend → more
'And my kids, my grandchildren, your kids, your grandchildren, they're going to be paying off this debt for the rest of their lives.
asserted
they → go → lives
The Albanese government argues spending measures are helping households manage cost-of-living pressures, while funding commitments in health, aged care, defence and the NDIS have pushed expenditure higher.
asserted
commitments → argue → expenditure
The latest inflation rate remains well above the Reserve Bank's 2 to 3 per cent target band and has strengthened expectations of another rate rise in November.
asserted
rate → remain → November
Australia now has the second-highest cash rate among comparable advanced economies, behind only Iceland at 8 per cent.
asserted
Australia → have → cent
Bouris said he was concerned Australia's inflation problem could ultimately require a recession to solve, as happened during the early 1990s downturn, which was famously described by then-treasurer Paul Keating as 'the recession we had to have'.
uncertain
we → say → recession
In other words, the only way to cure this galloping inflation, which has come about as a result of too much spending, which is exactly what happened after the Hawke-Keating government, too much spending, was to have a recession to fix the inflation problem.
asserted
what → cure → problem
RBA governor Michele Bullock (pictured) on Tuesday stopped short of ruling out another rate hike before Christmas if fresh shocks hit the economy
'
asserted
shocks → picture → economy
And the recession came about as a result of the Reserve Bank hiking interest rates to the highest interest rates we've ever had.
asserted
we → come → rates
Bouris argued 'galloping inflation', driven by excessive spending, could only be brought under control through a significant economic slowdown.
uncertain
inflation → argue → slowdown
'And I fear that might be the only way out, having listened to the Reserve Bank governor yesterday.
uncertain
that → fear → governor
She's in a bit of a pickle,' he said.
asserted
he → say → pickle
She says, "I don't have any other tools.
asserted
I → say → tools
If you know something else I can do, tell me what it is.
asserted
it → know → me
But right now, my only job is to cure inflation.
asserted
job → cure → inflation
And the only way I can do it is to keep putting interest rates up, and we're going to break the back of the economy".'
asserted
we → do → economy
The Aporia
