Shortly after winning the 2013 election warning of a "debt and deficits disaster", the Coalition projected the value of Commonwealth government securities on issue would climb to $667 billion in a decade as a result of Labor policies. The federal government borrows money by issuing securities. "Were we to proceed on a business-as-usual approach, we would see deficits out forever, and debt ballooning to levels which would impoverish our children and grandchildren,” Malcolm Turnbull warned shortly after the 2014 budget. Since then, the 10-year forecast for government debt has climbed even higher - to $684 billion - on the latest Treasury figures, which will be updated on Tuesday. The figure for net debt is lower, thanks to money stashed in the Future Fund, along with other assets held by government. Mr Shepherd said this debt legacy revealed how the '‘baby boomer’' generation had turned traditional notions of inter-generational fairness on their head.

“I think it’s a sad reflection on my generation. That’s why we’re all going out there to help our kids with their mortgages. We’re leaving them with a colossal state debt. I think we’re doing it more out of guilt than anything else.” “The tradition of previous generations was to be able to say to their children: ‘We’re going to leave this country better for you than what we had’. I’m not sure we can say that now.” “People today are saying: ‘Look, I don’t think my children are going to have as good a life as I did, other than through inherited wealth.’ That’s disappointing.” Loading Replay Replay video Play video Play video Mr Shepherd, who is on the board of the Menzies Research Centre, has previously called for the family home to be included in the assets test for the age pension.

Economist Saul Eslake said the main issue was not the size of government debt - which was lower than in many advanced nations - but the fairness of the current tax and transfer system. “I’d probably be more worried not so much about the debt position, but simply the way the whole system of income, wealth and taxes has all been changed in a way which advantages baby boomers at the expense of their kids.” “More broadly, there has been a very substantial redistribution of income and wealth from older Australians to younger Australians over the last two decades.” Loading In addition to enjoying a free education, older Australians had also been the major beneficiaries of the housing wealth boom.

“It astounds me that there isn’t more anger among young people about that," Mr Eslake said. And Tuesday's budget was likely to do little to wind back a raft of new tax concessions granted to older Australians in recent decades, including on superannuation and the Seniors Tax Offset, Mr Eslake said. “What I find striking is that while older Australians’ - aged 65 plus - share of population, of income and of wealth has risen, their share of tax paid has gone down.” Veteran budget watcher, Deloitte Access Economics’ Chris Richardson, said the government should fully bank any revenue windfalls, rather than cutting income taxes, to restore a budget buffer against future economic shocks. “Baking personal income tax cuts into the budgetary cake could end up being a mistake, saddling us with permanent promises off the back of temporary good news,” Mr Richardson said.