Hockey warns of 'spiralling debt'
TREASURER Joe Hockey is laying the foundations for his second budget, warning all Australians of a "spiralling" debt that needs urgent reform.
Mr Hockey addressed the New South Wales Business Chamber yesterday, outlining what would be revealed in the Intergenerational Report.
The report, already two weeks overdue, is a five-yearly update on the long-term budget outlook, originally created by former treasurer Peter Costello.
As Mr Hockey begins shaping the Abbott government's second budget, as economic conditions deteriorate, he said it was time to act "before the rot sets in".
Mr Hockey said the report, expected to be released soon, would show the number of people aged 65 or older would grow three times faster than the working-age population in the next decade.
"In other words, the number of people in the 'traditional' workforce supporting those who have left the workforce will nearly halve over the next 40 years," he said.
Mr Hockey said the report also would show how the government's current spending was exceeding its revenue by $100 million every day.
"Spiralling debt is not a legacy we can leave for the next generation," he said.
"This is not the compact between generations we want."
But as economists warned of the risks of another tough budget, and the Senate continued to pose a threat to the government's agenda, Mr Hockey said there were challenges ahead.
He also said workforce participation and productivity must be increased for Australia to stay competitive.
Mr Hockey said while "great strides" had been made to increase female workforce participation, "more must be done'.
He cited a Grattan Institute report that showed a potential $25 billion increase in gross domestic product by lifting the number of women in jobs to levels comparable to Canada's.
But he warned of the risks of not passing the government's budget measures from last year.
He said if the measures could not be implemented, or alternatives found, the country would have to keep borrowing to pay for "our day-to-day bills".