Australia’s governments brace for credit ratings downgrades

Monday 15 September 2025

Data released by the Australian Bureau of Statistics (ABS) last week showed that the combined recurrent spending of the federal and state governments rose by 7.7% in 2024-25, to $1.02 trillion. In contrast, government revenue increased by just 4% during the financial year.

The increase in recurrent spending was driven by a number of factors.

First, government employee costs rose by 8.8%, driven by state governments.

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.