“While the net national debt has increased, expected public debt interest payments are expected to remain around 1.3% of GDP through 2023-24 due to falling interest rates.”
In 2019-2020, the federal government forecast net debt of $ 361 billion and decline over the next three years. Due to the pandemic, it is now expected to reach $ 951.7 billion by 2023-24.
At the state level, Victoria will end up with the largest net debt burden. After reaching $ 16.7 billion in 2018-19, it is now expected to reach $ 154.8 billion in 2023-24.
At the end of last month, the rating agency Moody’s downgraded Victoria’s rating from AAA to AA1, noting that the state was unlikely to stabilize debt in the near future.
Before the pandemic, New South Wales’ net public debt was negative. It is now expected to reach $ 96.7 billion by 2023-24.
Data this week showed the economy was recovering from the pandemic, with national accounts for the December quarter showing a 3.1% increase in GDP. This follows growth of 3.4 percent in the September quarter.
The household savings rate is 12%, with analysts expecting consumers to dip into their savings in the coming months.
But the federal government is continuing with some of its stimulus measures.
Treasurer Josh Frydenberg confirmed Thursday that the fourth package of economic support payments will begin to flow soon. Payments of $ 250 will go to 5.1 million families, retirees, caregivers, veterans and people with concession cards.
In total, the four payments cost the budget $ 12 billion.
“As we move towards a more optimistic and stronger recovery this year, this latest payment will provide additional support to millions of low-income households recovering from the impacts of COVID19,” he said.
Shadow Treasurer Jim Chalmers said the federal government’s debt level was inflated by poor or politically motivated spending decisions.
“The Morrison government doesn’t have enough jobs and opportunities to show off its trillions of dollars in debt because the budget is riddled with rorts,” he said.
“There would be less debt, or more room to support jobs, if the government didn’t treat taxpayers’ money like it belonged to the Liberal Party.
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