Australia's national debt is projected to exceed $1 trillion by 2025-26, according to a mid-year fiscal update by Treasurer Jim Chalmers. The update highlights a significant increase in budget deficits and government spending, coupled with ongoing revenue pressures.
The nation’s gross debt will surpass $1 trillion in 2025-26. Treasurer Jim Chalmers revealed a $21.8 billion blowout in budget deficits and commonwealth debt crashing through $1 trillion in the coming year. The update reveals a lift in government spending, much of it in areas such as childcare and aged care, but also confirms ongoing revenue pressures with collections of one key tax expected to slump by a quarter.
It also shows that the economic outlook for the Albanese government headed to an election by May of next year remained tough, with household spending likely to grow slower than the population even as inflation remains steady and real wages lift. Chalmers, who in May forecast a deficit of $28.3 billion for the current financial year, now expected it to ease slightly to $26.9 billion. But beyond 2024-25, the situation is much worse. From the current financial year until 2027-28, Chalmers had forecast cumulative deficits of $122.1 billion. He is now forecasting $143.9 billion in red ink. The deficit in the coming financial year is now tipped to reach $46.9 billion, a deterioration of $4.1 billion over the May forecasts. It would be the sixth-largest deficit in cash terms on record. The 2026-27 deficit is tipped to be $11.7 billion worse at $38.4 billion, while in 2027-28 the deficit is expected to be $31.7 billion, a $7.4 billion blowout on what had been forecast. The bigger deficits mean more debt. Gross debt, currently $911 billion, is expected to finish the financial year at $940 billion. It is forecast to climb to $1 trillion next year, $1.1 trillion the year after that and hit $1.16 trillion by 2027-28
AUSTRALIA DEBT ECONOMY BUDGET FISCAL UPDATE
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