Australia avoids ‘iceberg’ but debt on track to hit $1.4 trillion

A stronger-than-expected economic rebound following the pandemic has enabled Australia to avoid a worst-case-scenario for government debt, but more spending restraint is needed according to a research paper that shows total debt is on track to hit $1.4 trillion this financial year.

Sustained spending on big-ticket infrastructure and other major health, education and defence projects has put total government debt on track to be worth as much $1.75 trillion and 58 per cent of GDP by 2027, according to a Centre for Independent Studies survey on post-pandemic debt.