<i>Illustration: michaelmucci.com</i>

Illustration: michaelmucci.com

Sweeping judgments about generations are dubious but the statistics do tell a story about one generation which stands out for all the money it has spent and all the debt it has racked up - the baby boomers. I am a member of that generation and I'm not happy about the boomers cost-shifting to generations X, Y and Z. Never before in peacetime have we seen one generation spend so much. Generation Spend. Generation Debt. Generation Second-Home.

Australia's first boomer prime minister was Kevin Rudd, and what a spendthrift he turned out to be. Yes, he ''saved Australia from recession'' during the global financial crisis, but in the process he wildly overreacted. Hansard is full of accurate warnings at the time. Rudd inherited zero debt and a budget surplus but his legacy is a $300 billion debt and a mountain of unfunded legislative commitments.

Peter Costello, the boomer treasurer who left behind zero debt, is now free to engage in frankness. He wrote recently about the challenge facing the Abbott government: ''I doubt we'll ever get back to where we were in 2006. I doubt the Commonwealth will ever pay off this debt.''

The collective record of the baby boomers in the wealthy economies is alarming. Boomers, those born between 1946 and 1964, who are thus aged from 49 to 67, have been running the world for a decade. In that time, the European Union has collectively accumulated a public debt of more than 90 per cent of gross domestic product. Japan has a public debt of more than 200 per cent GDP. The US has seen the growth of absurd disparities in wealth, a hollowing out of the middle class, an economy floating on massive money-printing and a federal debt now more than 100 per cent of GDP.

This is the defining challenge facing the Abbott government, yet only a small fraction of the political reporting is even looking at the challenge. Instead there is a din about spending, with a clamour about more, more more. Where is the money for Gonski? For the National Disability Insurance Scheme? For the infrastructure to deal with 240,000 immigrants a year? For cutting carbon emissions? For health? Indigenous disadvantage? Asylum seekers?

The one question rarely asked is the one that really matters: where is the money going to come from?

Reality: Australia cannot afford the Gonski spend, plus the NDIS spend, plus the carbon reduction spend, plus the paid parental leave spend, plus the infrastructure surge, plus the promised increase in defence spending, plus the cost of unfunded retiring boomers, plus reducing indigenous disadvantage, plus $1 billion a year for asylum seekers. The revenue is simply not there. It is never going to be there under the present mix of existing tax arrangements, budget commitments, social welfare obligations, low productivity growth, ageing population and the debt-service burden. Yet the critique is all about spin and social equity.

It's not as if the challenge is insurmountable. It's just that the surmounting requires grit and focus from the government and a recognition by the media and the public that either there has to be policy triage, or much higher taxes, or both.

Last week the Productivity Commission, eyeing the demographic storm ahead, recommended raising the eligibility age for pensions to 70, though only by the distant year of 2035 (the Gillard government had already raised the eligibility age to 67 by 2023). This was greeted with howls of outrage by Labor and numerous interest groups. Treasurer Joe Hockey responded by saying the government had no plans to increase the pension age.

In that case he'd better have a plan for plenty of other tough decisions. Last May Hockey said we had a budget emergency, and the problem was not too little revenue but too much spending. There is indeed a budget emergency pending unless taxes rise and spending is slashed. A good strategic reference point is a 28-page paper put out last week by the Centre for Independent Studies, entitled Target 30, which sets out nine major savings which would cut federal spending by $20 billion a year.

Just two of the biggest proposed cuts would save $14 billion a year: ending corporate welfare by eliminating industry assistance payments, saving $8 billion a year. And abolishing the Family Tax Benefit Part B, which goes to middle-income families, plus ending the Schoolkids Bonus, and means-testing the Family Tax Benefit Part A, saving almost $6 billion a year.

It is the moral obligation of the Abbott government to avoid what boomer governments have done all over the developed world, and avoid becoming a Me Generation of unsustainable social spenders. The surrounding clamour about more, more, more pales besides this imperative of protecting the next generations from profligacy by the generation now in power.

This always has been the moral imperative of democratic governments. The boomers are the first generation to act as if it is not.

Twitter: @Paul_Sheehan_

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