The Debt Avalanche, Why Australia’s Spending Addiction Is Burying the Middle Class Under Inflation

Australia is sliding into a financial abyss, and the middle class is bearing the brunt of the collapse. The federal government’s addiction to borrowing has spiralled out of control, with gross debt projected to balloon to $1.22 trillion by 2028-29, a staggering $283 billion increase from today’s levels. This isn’t just a number on a ledger, it’s a slow-motion avalanche burying families under rising grocery bills, crippling mortgage rates, and an inflation monster fed by reckless fiscal policy. The 2025 budget, touted as a lifeline for the vulnerable, is instead a syringe of temporary relief masking a deeper sickness, an insatiable appetite for spending that sacrifices long-term stability for short-term applause.

At the heart of this mess are policies that sound noble but deliver only pain. Take the unchecked public sector wage hikes, $2.6 billion for aged care nurses and $3.6 billion for early childhood educators in 2025 alone. These aren’t evil ideas, as care workers deserve fair pay. But when public sector wage growth outpaces the private sector’s (2.0% versus 1.2% in 2024), it sets dangerous precedent and the divide continues to grow. The government isn’t creating wealth to fund these increases, it’s borrowing it, piling onto a net debt forecast to hit 23.1% of GDP by 2028-29. This has nothing to do with compassion, it’s a Ponzi scheme dressed up as justice, where the bill lands on taxpayers already stretched thin.

Then there’s the green energy obsession. The Future Made in Australia Act pumps billions into hydrogen, solar, and battery manufacturing, all clearly unreliable, with $2 billion for “green aluminium” alone in 2025. The pitch is seductive, jobs, sustainability, a cleaner tomorrow. But the reality is a bloated subsidy machine that continues to distort markets and drives up energy costs. Electricity prices, even with $1.8 billion in extended rebates through 2025, remain a dagger in household budgets. Subsidies suppress prices artificially, sure, headline inflation dropped 25.2% in 2024 thanks to these handouts, but they don’t fix the underlying supply issues and the subsidies are from borrowed money. They’re a Band-Aid on a broken system, and when the money runs dry, the reckoning will hit hard. The subsidise on further placing inflationary burdens on tomorrow, and the debt on exacerbates it.

Inflation is the silent thief robbing the middle-class blind. Treasury forecasts it at 3.0% in 2025-26, but that’s a rosy guess hinged on global stability and commodity prices holding steady. Good luck with that. The government’s own spending, projected at $785.7 billion in 2025-26, outpaces GDP growth substantially, pushing public sector spending to 28.5% of GDP next year, up from 24.1% in 2018-19. This isn’t prudence, it’s profligacy. (Ok I’m just being pedantic, its bloody reckless!) Every dollar borrowed today is a tax hike or service cut tomorrow, and it’s the middle class, those too “rich” for welfare but too strapped for comfort, who foot the bill. Grocery prices have soared, with supply chain chaos and natural disasters jacking up costs by double digits in many sectors. A loaf of bread or a carton of milk isn’t just pricier, it’s a daily reminder of a government that spends like a gambler chasing losses.

Mortgage rates are the other blade of this guillotine. The Reserve Bank of Australia (RBA) has held rates steady, but the threat of hikes looms as inflation lingers above the 2-3% target. Households with variable-rate mortgages, about 70% of borrowers, feel every twitch in monetary policy. Since 2022, repayments on a $500,000 mortgage have jumped by hundreds monthly, and with unconscionable increases in net migration fuelling housing demand (395,000 in 2023-24, slightly easing to 260,000 in 2025-26), prices aren’t cooling anytime soon. The government’s “Help to Buy” scheme (scam), with $6.3 billion to co-purchase homes, might shave a few points off deposits, but it’s a drop in a bucket of inflated property values. Middle-class families aren’t just locked out of homeownership, they’re chained to debt servitude. Let me make this abundantly clear, this is by design, not something to blame on the spectre of climate change.

The moral case for this spending spree doesn’t hold water either. Handouts like the $150 energy rebate in 2025-26 or the invisible $300 from 2024-25 sound generous, but they’re crumbs compared to the structural rot. They don’t shield the vulnerable, they pacify them while the real problem festers. The National Disability Insurance Scheme (NDIS), a sacred cow of compassion, got $175.4 million more over five years, yet last year’s reforms promised $144 billion in savings by curbing growth. It’s a shell game, borrow to fund empathy, then claw it back later. Meanwhile, the middle class, ineligible for most aid, watches their purchasing power erode. Real disposable income per capita has tanked, with consumption flatlining in 2024’s second quarter. The savings ratio crept up to 3.2%, but that’s not thrift, it’s obvious fear.

This isn’t just an attack on economics, it’s psychology. People aren’t dumb, not every Australian has been indoctrinated in overly funded, public schools, most see through the façade. When a government promises relief but delivers deficits ($42.1 billion in 2025-26, per Treasury), trust evaporates. Contrary to the Houso in charge’s continuous dribble. the middle class isn’t a monolith of privilege, it’s a fragile ecosystem of aspiration and responsibility. They’re the ones who pay taxes, raise kids, and keep society humming. Yet they’re treated like an ATM for utopian experiments.

The ban on non-compete clauses for low- and middle-income workers might boost wages, maybe 3.3% in the private sector, as seen in 2024, but it’s a gamble that assumes businesses won’t just cut jobs instead. Risk without reward is a lousy deal. Fair work commission caseloads increased by between 5% to 10% around the country, which on administrative costs alone would have completely wiped out any theorised wage increase benefits.

As a Security professional I would call this a threat assessment gone wrong. The government’s borrowing binge is a vulnerability, exposing the nation to economic predators, rising interest rates, currency shocks, or a commodity bust. The coming American Tariffs could be devastating. Iron ore, pegged at $60 per tonne by Q1 2026, is a potential lifeline, but if China sneezes, Australia catches pneumonia. Debt servicing costs are already climbing, with interest payments eating 9.9% of the budget over the next decade, down slightly from 11.7% pre-2024 but still a beast. Every percentage point rise in global rates could add billions more. This isn’t resilience, it’s a house of cards waiting for a breeze. I suppose when in happens they’ll blame it on climate change.

Philosophers of fairness and justice would argue there’s a duty to balance today’s needs with tomorrow’s burdens. Fairness isn’t borrowing from kids who can’t vote to buy votes today. Liberty isn’t shackling families to inflation while preaching green dogma. And integrity isn’t papering over deficits with platitudes about “fiscal responsibility.” The 2025 budget’s $17.1 billion tax cuts, dropping the base rate to 15%, then 14% by 2026-27, might juice consumption, but at what cost? Treasury says it won’t spike inflation, but the RBA’s not so sure, eyeing a cash rate drop to 3.6% by mid-2026 only if the stars align. If they don’t, the middle class gets another squeeze. The costs to productivity and innovation have already been predicted in the Billions, as the brain drain continues and Australia’s best feel the pain and jump on a plane.

Crowd behaviour tells the tale, discontent is brewing. Polls show Labor’s primary vote dipping below 30%, a slide from its 32.5% in 2022. People aren’t buying the spin, living standards have cratered, the worst in 50 years, and working-class folks skip meals or live in cars while the government crows about surpluses ($9.3 billion in 2023-24) that vanish into deficits tomorrow. The opposition’s immigrant-bashing is no fix either, just noise to drown out the real issue, Australia has a spending addiction. When trust frays, society frays. Crime ticks up, stress festers, and the social contract wobbles. Third parties look to gain far more seats Australia Wide than in previous years. The problem is, many of these third parties are extremist groups or activist teals heavily influenced by foreign funding and globalist elites. Nearly all of them parasitic leeches that have profited from the pain of Australians through NGO’s or non-profits, some for decades.

Economists who’ve studied human nature would nod grimly. Markets thrive on discipline, not handouts. Subsidies distort signals, green energy boondoggles chase ideology, not efficiency. Wage hikes without productivity gains are a sugar high before the crash. And debt? It’s a bet on future growth that’s looking shakier by the day, GDP growth limps at 0.8% in 2024, below the 2.25% hoped for in 2025-26. History whispers warnings, as nations that borrow beyond their means don’t end well. Australia’s not there yet, but the cliff’s edge is closer than we think. Nauru’s collapse in the 90s a complete surprise to the citizens themselves although predicted by outsiders for years prior.

Profilers of human folly might peg this as hubris, a government convinced it can spend its way to salvation, blind to the wreckage. Personality traits matter, resilience is fading, replaced by anxiety as bills pile up. The middle class isn’t greedy, they’re bloody exhausted. Many working 2 or three jobs, (both partners) just to stay afloat. Temporary fixes like student debt cuts ($19 billion off HELP loans) or childcare subsidies ($5 billion for 160 centres) don’t heal the wound, they’re morphine for a broken leg. Real healing demands sacrifice, not largesse and greater interventionism.

The antidote isn’t sexy, fiscal restraint, targeted aid, and a hard look at what works. Cut the fat, it’s time to go on a diet, public sector bloat, not nurses, before it chokes us. Ditch subsidies that prop up losers and let markets breathe. Protect the truly vulnerable, not every voter with a power bill. And for God’s sake, stop pretending debt doesn’t matter, it’s a chain around our necks, and the middle class is drowning in it. Australia’s spending addiction isn’t noble, it’s a betrayal of the people it claims to serve. Time’s running out to kick the habit before the avalanche buries us all. From the author.

The opinions and statements are those of Sam Wilks and do not necessarily represent whom Sam Consults or contracts to. Sam Wilks is a skilled and experienced Security Consultant with almost 3 decades of expertise in the fields of Real estate, Security, and the hospitality/gaming industry. His knowledge and practical experience have made him a valuable asset to many organizations looking to enhance their security measures and provide a safe and secure environment for their clients and staff.