Australian states face soaring interest costs

Thursday 17 September 2026

Australians face soaring interest repayments on government debt due to a combination of growing debt loads and rising interest rates.

As a result, the Parliamentary Budget Office (PBO) forecasts that interest costs will rise from 4.1% of government revenue in 2024-25 to 6.2% in 2029-30:

The PBO has forecast that the combined debt of the state and territory governments will top $771 billion by the end of this decade, while total federal and state debt will reach $2 trillion.

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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.