PUBLIC – AUSTRALIA

$77bn tax grab

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Original article by Greg Brown
The Australian – Page: 1 & 11 : 13-May-26

The federal government’s budget papers show that the nation’s gross debt is set to exceed $1 trillion in 2026-27, while it is forecast to peak at 35.8 per cent of GDP in 2028-29. Net debt is in turn forecast to top $616bn by mid-2027, while the budget includes net tax increases totalling $77bn. Meanwhile, the government is set to post deficits for the next decade and will not deliver a balanced budget until 2034-35, although the latter is based on expectations of higher tax revenue and projected savings from NDIS reforms. The budget also includes a productivity package for the business sector; amongst other things, the instant asset write-off will become a permanent feature of the tax system, while the loss carry back tax offset will be reinstated; however, the government now expects its productivity growth target of 1.2 per cent to be achieved three years later than expected.

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No longer a low-debt country

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Original article by Greg Brown, Matthew Cranston, Lachlan Leeming
The Australian – Page: 1 & 2 : 1-Apr-26

Former NSW premier Mike Baird notes that Australia’s state and territory governments now account for about half of the nation’s total public debt. Baird contends that the states need to be more accountable for the nation’s growing debt; he argues that treasurers should issue a fiscal statement ahead of their annual budgets outlining the consequences of their spending decisions for the coming 10 years, rather than simply the four-year budget cycle. Meanwhile, federal Treasurer Jim Chalmers has declined to make a commitment to produce net saving in the May budget, amid growing speculation that it will feature new government spending measures in response to the oil shock and cost-of-living pressures.

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AUSTRALIA. DEPT OF THE TREASURY

Decade of spending discipline

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Original article by Matthew Cranston
The Australian – Page: 1 & 4 : 3-Dec-25

Official data shows that total borrowing by governments across Australia topped $42bn in the September quarter, which is about 40 per cent higher year-on-year. Meanwhile, the OECD has warned that the federal and state governments will require "fiscal discipline and consolidation" in order to stabilise public debt at about current levels. The Paris-based organisation adds that this fiscal discipline will most likely be needed beyond the current decade, as governments are facing spending pressures linked to factors such as the nation’s ageing population, defence and the transition to net-zero emissions. The OECD has upgraded its GDP growth forecast for Australia in 2026 from 2.2 per cent to 2.3 per cent.

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Investors calm as government debt nears $1trn

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Original article by Cecile Lefort
The Australian Financial Review – Page: 25 : 3-Sep-25

Official data shows that the federal government’s debt currently stands at $961bn, while its monthly interest bill is about $2bn. Meanwhile, gross debt has risen from just five per cent of GDP to 37 per cent in the last 15 years, although this compares favourably with the US (124 per cent) and Japan (216 per cent). Robert Thompson from RBC Capital Markets expects federal government debt to top $1bn in early 2026. However, Oliver Levingston from Bank of America says Australia has low debt and low deficits compared with the majority of advanced countries. He adds that Australian government bond yields are highly attractive at present.

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RBC CAPITAL MARKETS, BANK OF AMERICA CORPORATION

Government debt could hit $1trn by September

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Original article by Michael Read
The Australian Financial Review – Page: 4 : 8-May-25

Data from the Australian Office of Financial Management shows that the federal government’s gross debt is currently about $929bn. Micaela Fuchila, the chief economist at investment bank Jarden, has forecast that the nation’s gross debt will reach $1trn in either September or October of this year. The Treasury in turn expects the government’s net debt – which excludes the value of financial assets such as the Future Fund – to reach $556bn by June. S&P Global recently warned that Australia’s coveted AAA credit rating may be at risk if federal election spending promises are funded via debt rather than revenue or cost savings.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY. OFFICE OF FINANCIAL MANAGEMENT, JARDEN AND COMPANY, S&P GLOBAL INCORPORATED

ALP’s fiscal reckoning

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Original article by Geoff Chambers, Matthew Cranston
The Australian – Page: 1 & 4 : 25-Mar-25

Treasurer Jim Chalmers says the federal budget is in much better shape than when Labor took office in May 2022. He adds that tonight’s budget will help to "finish the fight against inflation" and ease the cost-of-living crisis. The budget papers are expected to show that gross debt will total $940bn in 2024-25, which equates to about 36 per cent of GDP; this compares with the forecast of 35.2 per cent in the 2024 budget. Chalmers has emphasised Labor’s economic credentials, noting that it has delivered two surpluses in its first term and reduced the former Coalition government’s debt by $177bn. However, the budget will be in deficit for 2024-25, and Chalmers has conceded that it is unlikely to return to surplus for at least a decade.

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AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY

S&P loses patience, warns of state downgrades

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Original article by Michael Read, Jonathan Shapiro
The Australian Financial Review – Page: 3 : 5-Feb-25

A report from S&P Global Ratings has concluded that the expenditure of Australia’s state and territory governments was $212bn higher between 2020 and 2023 than had been forecast in their 2019 budgets. This significantly offset the $146bn in revenue over the same four-year period. S&P forecasts that the combined debt of the states and territories will top $780bn by 2027, and the firm has warned they may face credit ratings downgrades unless action is taken to rein in spending.

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S&P GLOBAL RATINGS

Deficit disorder: spending blows budget

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Original article by Jack Quail
The Australian – Page: 1 & 4 : 26-Nov-24

Deloitte Access Economics expects the federal government to post a budget deficit of $33.5bn for 2024-25, following a surplus of $15.8bn for the 2023-24 financial year. The Treasury itself had forecast a 2024-25 deficit of $28.3bn, and a cumulative deficit of $122.1bn over the four-year estimates period; Deloitte now expects the latter figure to be $149bn. Deloitte partner Stephen Smith adds that both the government and the Opposition will face pressure to provide further cost-of-living relief ahead of the 2025 election. Deloitte also notes that there has been a sharp increase in ‘off-budget’ spending, while the firm expects net debt to reach $727.6bn by mid-2028.

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DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Chalmers to fight inflation, then spend

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Original article by Ronald Mizen
The Australian Financial Review – Page: 1 & 4 : 7-May-24

The federal government’s budget on 14 May will show that Australia’s gross debt has risen to $904bn in 2023-24; this is about $152bn lower than was forecast ahead of the 2022 federal election. However, the nation’s debt-to-GDP ratio is expected to rise from 33.7 per cent in the current financial year to 35.1 per cent by 2025-26. Meanwhile, Treasurer Jim Chalmers has signalled that combating inflation will be the key focus of the 2024 budget, while he has flagged an increase in government spending over the forward estimates period.

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AUSTRALIA. DEPT OF THE TREASURY

Chalmers to fight inflation, then spend

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Original article by Ronald Mizen
The Australian Financial Review – Page: 1 & 4 : 7-May-24

The federal government’s budget on 14 May will show that Australia’s gross debt has risen to $904bn in 2023-24; this is about $152bn lower than was forecast ahead of the 2022 federal election. However, the nation’s debt-to-GDP ratio is expected to rise from 33.7 per cent in the current financial year to 35.1 per cent by 2025-26. Meanwhile, Treasurer Jim Chalmers has signalled that combating inflation will be the key focus of the 2024 budget, while he has flagged an increase in government spending over the forward estimates period.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY