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The Victorian government’s financial report for 2025-26, released last week, shows that the state’s net debt rose to $160.7 billion during the financial year. Operating expenses rose $8 billion from the previous fiscal year to $112 billion, and $891 million above the budget forecast, driven mainly by rising wage costs.
The state’s net debt is forecast to increase to around $200 billion by the end of the decade.
Moody’s warned that by the end of the decade, Victoria could spend roughly 10% of revenue raised on interest repayments.
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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.
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