Australia has no net worth, and people can no longer fend for themselves
Australia finds itself at a familiar crossroads: the tension between what a society wants to build and what it can sustainably afford. Former Treasurer Peter Costello has returned to public life with a warning that the nation's fiscal foundations are eroding, while veteran economic voices like ex-RBA Governor Bernie Fraser are pressing for structural tax reform to address the deepening inequity of housing ownership. These are not new arguments, but their convergence — across political lines and generations of economic stewardship — suggests the reckoning may no longer be deferrable.
- Peter Costello's declaration that Australia has 'no net worth' lands as a sharp alarm, framing excessive public spending not merely as a budget problem but as a threat to individual independence.
- Shadow Treasurer Jim Wilson's agreement with Costello signals rare cross-partisan consensus: the current debt trajectory is unsustainable and demands urgent correction.
- Bernie Fraser's call to abolish the capital gains tax discount injects a reform proposal into the housing debate — one carrying the credibility of a former central bank governor, not a political agitator.
- Even as fiscal warnings mount, the government is weighing a $5 billion annual high-speed rail commitment, sharpening the contradiction between infrastructure ambition and budgetary restraint.
- The collision between long-term capital investment needs and short-term fiscal discipline is fast becoming the defining policy tension of the current political moment.
Peter Costello, the architect of Australia's surplus years during the mining boom, has re-entered public debate with an unsparing verdict: the country is spending beyond its means and the consequences are structural, not cyclical. In his telling, government has grown so large that it is crowding out the capacity of ordinary Australians to achieve financial independence — and rising taxes are making that worse. His summary of the nation's position was characteristically blunt.
His concerns found unlikely reinforcement from the opposition benches. Shadow Treasurer Jim Wilson echoed the alarm about climbing net debt, creating a moment of rare alignment between a Coalition elder and a current Labor opponent — both agreeing the fiscal path is unsustainable.
On a separate but connected front, Bernie Fraser — who once guided the Reserve Bank through turbulent decades — told a Senate committee that abolishing the capital gains tax discount would meaningfully improve housing affordability. The discount, which shields half of investment gains from taxation, has long been seen as a structural advantage for property speculators over first-home buyers. Fraser's voice carries the weight of institutional experience rather than ideology.
Set against these warnings, the government is nonetheless contemplating a major new commitment: a publicly released business case for high-speed rail proposes annual investment of around five billion dollars. The juxtaposition is striking — senior economic figures urging fiscal restraint while the state considers one of its largest infrastructure bets in years. How Australia navigates that tension will define its economic policy for the decade ahead.
Peter Costello, who steered Australia's finances through the mining boom of the early 2000s, has returned to public commentary with a stark assessment: the country is living beyond its means, and the bill is coming due. Speaking publicly this week, the former Liberal treasurer painted a picture of structural fiscal decay—one where government spending has grown so large that ordinary Australians have lost the capacity to fend for themselves. Higher taxes, he argued, are compounding the problem, making independence harder to achieve. The phrase he used to describe the nation's financial position was blunt: Australia has no net worth.
Costello's warnings found an echo in the opposition. Jim Wilson, the shadow treasurer, agreed that the current budget trajectory is unsustainable and that net debt is climbing in ways that demand attention. The consensus among these senior economic voices—one from the Coalition's past, one from Labor's present opposition—suggests a rare moment of alignment on a fundamental problem: the government cannot spend at its current rate without consequences.
Meanwhile, another former heavyweight in Australian economic management has weighed in on a different but related problem: housing affordability. Bernie Fraser, who led the Reserve Bank of Australia, told a Senate committee that abolishing the capital gains tax discount would be a meaningful step toward making property ownership more achievable. The CGT discount—which allows investors to exclude half their capital gains from taxation—has long been criticized as a subsidy for property speculation. Fraser's endorsement of its removal carries weight; he is not a radical voice but a technocrat speaking from decades of experience managing monetary policy and observing how tax settings shape asset prices and economic behavior.
The Royal Commission into the Bondi Junction attack held its first public hearings this week, turning its attention to the definition of antisemitism itself. Justice Virginia Bell, presiding, noted that even the term is contested—different communities and nations define it differently, and those differences matter when trying to understand how hatred spreads and how to counter it. The commission is tasked with examining what happened on that day and the broader context of antisemitism in Australia, and the definitional question is not academic; it shapes what the inquiry can see and what it can recommend.
In Sydney's northwest, the search for Chris Baghsarian, an 85-year-old man who had been missing, ended with the discovery of human remains believed to be his. The case had drawn public attention, and the discovery brought closure to a family's uncertainty, though the circumstances remained under investigation.
Looking ahead, the government is considering a substantial commitment to rail infrastructure. A business case for a high-speed rail project, released publicly for the first time, suggests an annual investment of around five billion dollars. The proposal sits against the backdrop of the fiscal warnings from Costello and others—a reminder that even as senior figures warn of unsustainable spending, the government is contemplating major new capital commitments. How those two pressures resolve—the demand for infrastructure investment and the warnings about fiscal sustainability—will shape policy for years to come.
Citas Notables
People are more reliant on government due to higher public spending, and tax increases are making it harder to be independent— Peter Costello, former Treasurer
Abolishing the capital gains tax discount would be a step in the right direction toward making housing more affordable— Bernie Fraser, former RBA governor
La Conversación del Hearth Otra perspectiva de la historia
Why does Costello's warning about net worth matter now, in 2026? Hasn't Australia always carried debt?
The difference is the structure. Costello is saying the debt isn't funding productive assets anymore—it's funding consumption. When people lose the ability to earn and save independently, they become dependent on government transfers. That's a different kind of vulnerability.
And Fraser's push to abolish the CGT discount—is that really about housing, or is it about tax revenue?
Both. The discount does subsidize investors, which pushes up prices. But Fraser isn't arguing for higher taxes in general; he's arguing that this particular tax break distorts the market in ways that hurt first-time buyers. It's a structural argument, not a revenue grab.
So we have warnings about spending being too high, but the government is considering five billion a year for rail. How do those fit together?
That's the tension no one's resolved. You can argue rail is productive investment that pays for itself, or you can argue it's exactly the kind of spending Costello is warning about. The business case will matter—whether it actually generates returns or just becomes another line item.
What does the Royal Commission's focus on defining antisemitism tell us?
It suggests the inquiry understands that you can't investigate what happened without first agreeing on what you're investigating. The definition shapes the scope. If antisemitism is narrowly defined, you miss context. If it's too broad, you dilute it. That's why Justice Bell flagged it early.
Is there a common thread through all these stories?
Yes—they're all about what we owe each other and how we measure it. Fiscal sustainability, housing access, the definition of hate, infrastructure investment. They're all questions about resources, fairness, and what a functioning society requires.