$2 trillion of debt and climbing – Australia’s great big IOU is getting bigger

The nation’s governments will owe a combined $2 trillion by the end of the decade as the states and territories borrow at extraordinary rates that will force them to spend more of their budgets servicing their debts.

Analysis released today by the independent Parliamentary Budget Office shows that in the case of Tasmania, interest repayments are on track to soar by more than 6000 per cent because of a blowout in debt levels while NSW and Victorian taxpayers face an increase of more than 400 per cent.

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According to the budget office, the states and territories had a combined $158.3 billion in gross debt in 2018-19. Federal gross debt was almost $650 billion.

By the end of this decade, state and territory gross debt is forecast to reach a combined $770.9 billion – a 387 per cent increase. Federal government debt is expected to reach $1.2 trillion, a 92 per cent lift.

Victoria faces the biggest debt load, forecast to reach $244.9 billion, an increase of 635 per cent. NSW’s debt is expected to climb by 440 per cent to $219.4 billion.

But the largest increase is in Tasmania, where debt is on track to soar by 1850 per cent, from $600 million to $11.7 billion. Not only is debt expected to soar, but the state’s interest bill is forecast to explode by 6280 per cent from $10 million in 2018-19 to $638 million in 2029-30.

Before COVID, the federal government accounted for 80 per cent of all government debt. By 2029-30, the states and territories will account for almost 40 per cent of the expected $2 trillion in outstanding debt.

Only the federal government and Western Australia are expected to keep their increase in gross debt to double figures over the period, although all parts of the country are facing a lift in the share of their revenue that goes to paying their interest bill.

https://www.smh.com.au/politics/federal/2-trillion-of-debt-and-climbing-australi...

Great catch. Get Boris Yeltsin another bottle of potato vodka.






Paul Keating delivered his famous "banana republic" warning on May 14, 1986, during a radio interview with John Laws on 2UE Sydney.  Then-Treasurer Keating stated that if the government failed to manage the country's severe current account deficit (which had reached 6% of GDP) and implement economic reforms, Australia would become a "third-rate economy" and a "banana republic."

Keating also famously said that excise on petrol was not a tax.