Federal and state governments careen off debt cliff

Tuesday 22 September 2026

Australia is heading into a steep debt‑refinancing cliff that will impact both federal and state governments.

Federal gross debt surpassed $1 trillion (33% of GDP) in August and is projected to reach $1.25 trillion by 2030 due to persistent deficits.

As reported by Michael Read at The AFR, $165 billion of ultra‑cheap COVID‑era federal debt will roll over from a 0.5% interest rate to more than 5% by 2030, which will increase interest repayments by $7.7 billion every year.

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

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.