While Treasurer Jim Chalmers was spruiking debt in 2023-24 being $904 billion, gross debt is forecast to rise sharply in the years ahead.
Already a subscriber?Annual interest payments on Australian government debt will surge almost 60 per cent to $35 billion in the next four years as deeper deficits add to the borrowing task.
The deterioration in the debt position reflects the forecast underlying cash balance in coming years. The next four budgets forecast cumulative deficits of $112 billion, according to theThe large dip into the red ink reflects continued pressures on the structural budget bottom line from new and “unavoidable”, as described by the government, spending on things such as defence and aged care.
But some economists believe Treasury’s conservative commodity price forecasts, including for iron ore and coal, could keep delivering good results and even a third consecutive surplus for the treasurer. Similarly, if inflation moderates faster than expected and bond yields fall about 1 percentage point below Treasury’s forecasts, the budget estimates an improvement to the underlying cash balance of 0.2 percentage points of GDP by 2034-35.
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