Former treasurer claims Australian government has ‘no net worth’
Former Treasurer Claims Australian Government Has ‘No Net Worth’
Former Treasurer Peter Costello has reignited debate over Australia’s public finances, claiming the federal government now has “no net worth” — a dramatic shift, he argues, from the strong fiscal position when the Coalition left office in 2007.
Speaking at the Aspire conference, Costello said net debt has climbed to roughly $20,000 per Australian, including every “man, woman, baby, girl, child born today.”
He pointed to the government’s overall balance sheet — including assets such as Snowy Hydro (Snowy 2.0), the National Broadband Network (NBN), and the Future Fund — arguing that even after accounting for these, liabilities outweigh assets.
“Despite all the fancy accounting,” he said, “the Australian government has no net worth.”
Costello also accused Labor of preparing the public for higher taxes, questioning the need given record tax revenues.
Economist: “He Does Have a Point”
Chief Economist Shane Oliver from AMP said Costello’s framing is dramatic — but not entirely without basis.
Oliver noted that when John Howard and Costello left office, Australia had effectively no net debt, with assets offsetting gross borrowings.
Since then, multiple budget deficits — with only two surpluses since 2008 — have steadily added to public debt.
While major assets like the Future Fund and the NBN retain value, Oliver acknowledged that Australia’s overall net worth position is weaker than it was nearly two decades ago.
Structural Problems and Productivity Slump
The broader concern, Oliver argued, lies in structural economic weaknesses.
Beginning in 1983 under the Hawke-Keating reforms, and continuing through the Howard-Costello era, Australia pursued sweeping supply-side reforms — including tax reductions, labour market deregulation, free trade expansion, and productivity-focused policies.
That reform period delivered strong productivity growth and rising living standards.
However, since around 2007–08, Oliver said governments have “let the ball slip”:
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Heavy reliance on mining revenue
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Slowing productivity growth
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Persistent budget deficits
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Rising government spending
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Increasing taxation levels
He warned that bracket creep — where inflation pushes workers into higher tax brackets — is now one of the few mechanisms keeping revenue flowing strongly.
Not a Crisis — But a Missed Opportunity
Oliver stressed that Australia is not in economic crisis and still performs relatively well compared to many advanced economies.
However, he argued the country could be performing far better with renewed focus on productivity reform and long-term fiscal discipline.
As new inflation figures are set to be released, the debate over Australia’s fiscal sustainability — and whether the country has shifted from “no net debt” to “no net worth” — is likely to intensify.
