Australia’s fiscal challenges are getting harder. Over two decades, the overall budget position – state and federal – has slipped into sustained deficit. Debt is higher after two global shocks, and governments have struggled to rebuild fiscal buffers for the next one. There is no imminent debt crisis, but with renewed pressures ahead – like an ageing population and slow productivity growth – Australia’s fiscal options are narrowing. The nation’s capacity to weather future shocks, and fairly share burdens across generations, is at risk.

This e61 report, supported by McKinnon, documents the medium- to long-term fiscal pressures facing the general government sector over the next 20–30 years. The analysis points to the need for policy change, likely involving some combination of spending restraint and tax reform, to place public finances on a more sustainable footing. Such adjustments require broad community engagement and informed public discussion about policy trade-offs. Delaying these choices risks increasing the scale of future adjustments and placing a disproportionate burden on younger and future generations of Australians.