Australia’s Government Debt Set to Top $2 Trillion by 2030
Australia’s combined federal, state and territory debt is forecast to reach $2.034 trillion by 2029-30, putting growing pressure on government budgets and taxpayers.
New analysis from the independent Parliamentary Budget Office (PBO) shows state and territory debt could rise to $770.9 billion by the end of the decade, while Commonwealth debt is expected to reach about $1.2 trillion.
Interest costs are also climbing. The share of government revenue used to service debt is projected to increase from 4.1 per cent in 2024-25 to 6.2 per cent in 2029-30.
Tasmania faces the biggest shock
Tasmania is expected to experience the most dramatic increase in interest costs. Annual interest payments could rise from $10 million in 2018-19 to $638 million by 2029-30.
The state’s gross debt is also forecast to jump from $600 million to $11.7 billion over the same period.
Victoria is projected to have the largest state debt, reaching around $244.9 billion, while NSW debt could climb to $219.4 billion by the end of the decade.
At the federal level, Treasury expects annual interest payments to reach $29.5 billion this year and $42.2 billion before the end of the decade.
The growing debt burden has triggered a political dispute, with the Opposition blaming government spending while the government points to Australia’s strong credit ratings and its fiscal measures.
Despite the rising debt, the PBO says Australia’s long-term fiscal position remains sustainable in 24 of 27 scenarios, provided economic growth remains solid and borrowing costs ease over time.
Global debt pressures add to concerns
Australia’s debt challenge comes as the United States passes an even larger milestone, with US government debt exceeding $40 trillion.
Higher interest rates and growing borrowing costs are increasing pressure on the US budget and raising concerns about a potential cycle where higher debt leads to higher interest costs and further borrowing.
Stay tuned with Aus News Lanka – the leading platform for news for Australians.
Source : News.com
Comments