PETER VAN ONSELEN: Labor’s massive spendathon is getting worse – and anyone with a mortgage, paying rent or trying to keep their business alive is going to pay

Nearly $150 billion in additional debt will be accrued over the next four years, more than $20 billion more than previously forecast. Nearly $60 billion in additional government spending this financial year alone. And despite promises to reduce immigration to 260,000 this financial year, numbers have increased by a further 80,000.

These are the key takeaways from a mid-budget doomsday update provided by Treasurer Jim Chalmers this morning.

Not good news for any Australian with a mortgage, paying rent or relying on stronger economic growth to support their business.

The increase in government spending this financial year alone means Labor is spending more than any previous government in Australia’s history.

The size of the government has therefore reached record proportions. Recurring expenses are not sufficiently covered by tax revenues. The national budget is surviving beyond its means unless someone in power finds a way to curb spending or increase taxes (without hampering economic growth).

Yet Chalmers claims that the expenditure he has made is ‘responsible’.

The increase in spending also makes it harder for the Reserve Bank to cut interest rates because government spending contributes to higher underlying inflation.

As Daily Mail Australia reported yesterday, inflation in Australia is high by the standards of comparable OECD countries.

That means the chances of a rate cut ahead of the next federal election are slim, although the perilous state of the economy means there is an outside chance that rates could fall sooner than expected to try to improve Australia’s economic performance .

According to the latest budget figures, we remain in a per capita recession and will remain so for the foreseeable future.

Right now, each new generation is likely to be worse off than the last unless something changes.

So where do these latest economic numbers leave us politically?

They are unlikely to lead to Labor scaling back its spending promises in the run-up to the election. More than $5.5 billion has been set aside for spending initiatives to be determined. In other words: for more election pork, on top of the announcements already made, such as cutting HECS debt by 20 percent.

For the Coalition’s part, it is critical of Labour’s spending and its refusal to make deeper cuts.

But will it outline how it could do things differently? Given that this is likely to trigger a scare campaign from the government.

Both today and yesterday, Chalmers has claimed that an elected Peter Dutton-led coalition government would cut health care spending and support for Medicare.

Dutton has made no such promises, but scare campaigns in politics are rarely based on facts.

Chalmers claimed today that Australia’s economy is in better shape than “most OECD countries”, but that rhetoric runs counter to The Economist’s analysis of OECD countries’ performance, with Australia ranking 21st out of 37 to land.

The treasurer also said Australia is heading for a “soft landing”, meaning the per capita recession will not turn into a full-blown technical recession, and unemployment is unlikely to rise too much.

He is probably right about that, but it is certainly not a badge of honor that reinforces his economic management qualities.

Australia has avoided a technical recession since 1991, apart from a brief pandemic-induced downturn that affected the entire world. We must no longer run the risk of a recession.

The challenge is to find ways to stimulate economic growth, rein in inflation and limit unsustainable spending as a precursor to reducing the burden of public debt on future generations.

Labor has no plans to do so, and the Coalition, if it has one, has not yet announced it.

Australia continues to live in the moment instead of planning for a better future. Without better political and economic leadership, we will not be the happy country for much longer.