7 Jul 2021
Interest payments on Government debt
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
There are many insights in this 5th Intergenerational Report which aims to forecasts an outlook for the Australian economy and the Federal Government’s budget over the next 40 years.
One piece of good news is that the cost of interest payments on Federal Government debt is likely to be contained for the rest of this decade, however it is then forecast to double into the 2040’s and 2050’s.
Click for Chart 6.11
The solution, reduce the amount of debt and you are most likely to reduce the cost of interest payments but there is a significant issue with this plan, Governments do not earn an income.
Government revenue is derived by taking from one segment to give to another which means that to repay debt and or the increasing interest cost they must take from you.
For a full copy of the 2021 Intergenerational Report please click the following link.
Click to read.
Please contact us if you want advice on how to minimise and reduce your tax liability in the coming decades.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.