Australia federal debt reaches A$1 trillion

The Australian federal government’s debt has reached A$1 trillion. Projections suggest this figure will continue to climb, potentially exceeding A$1.2 trillion by 2030, which would represent approximately 35% of Australia’s gross domestic product (GDP).

When including debt from state and territory governments, the total exceeds 50% of the national GDP. This marks a significant shift from a generation ago; for instance, in 2002, net debt was approximately 5% of GDP. The increase is attributed to various factors, including the global financial crisis and the COVID-19 pandemic, which required increased government spending.

Interest payments on public debt have become the fastest-growing area of federal spending according to the 2026 budget. While Australia's debt-to-GDP ratio is comparable to New Zealand and South Korea, it remains lower than the average for advanced economies.