Fixing Australia's budget woes means people must wake up to the reality that everyone is likely to face a greater tax burden.
"As a populace we've actually voted for higher taxes, we just don't realise that yet," the outgoing Reserve Bank governor Glenn Stevens said.
In a blunt assessment of the failure of politics to address the now-entrenched budget deficit, Mr Stevens said most interest groups tended to think the problem belonged with someone else.
He said the experience of previous episodes of budget repair had tended to reinforce the idea that the problems were solved by "taxing other people more".
"But I suspect if we're going to close the shortfall with taxes, it's going to mean we're all paying more."
Blunt message
Mr Stevens' blunt message comes amid growing speculation that the Turnbull government is unlikely to be able to repair the budget deficit – forecast to stretch well into the next decade – through spending cuts alone.
Returning spending to earlier norms implies massive reductions in services. For instance, to reduce spending-to-gross domestic product from its near-record level of 25.8 per cent to the 23.1 per cent level in 2007-08, just as the crisis struck, would imply removing $45 billion from expenditure overnight, and every year thereafter.
This would happen at a time when the ageing population continues to put upward pressure on spending, particularly on healthcare and pensions.
Mr Stevens said recent warnings that Australia could lose its AAA credit rating were a reminder that Canberra – and the Senate crossbench in particular – still hadn't resolved the post-GFC budget problem.
"That warning from the ratings agencies is telling us that there's work to do, certainly on the recurrent side of budgets," he said.
"That there's work to do to be on a better path than we're on."
Treasurer Scott Morrison faces considerable internal Coalition pressure to water down what are relatively modest proposals to wind back superannuation tax concessions for very wealthy Australians.
One of the problems, according to Mr Stevens, is that it is up to politicians to find a way of ensuring "everybody is paying their share".
No free stuff
"There's a tendency for a proposal to be put forward and if there's a single person in the country worse off they will be on TV that night.
"It's up to the political process to craft a way forward on all this stuff ... we're all going to have to take part in that.
"That actually means that all of us in some sense have to accept we don't get stuff for nothing."
Asked why the political system appeared to be struggling to repair the budget, Mr Stevens said it wasn't just a problem in Australia.
"It seems to be difficult elsewhere as well," he said. "If we are looking for causes for the difficulty the political process has in getting traction, we probably shouldn't confine our search only to domestic measures."
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