Australia’s debt is expected to rise in the current financial year, the Treasury has confirmed. Despite this, Treasurer Jim Chalmers has acknowledged the stronger fiscal position the country is in compared to pre-election predictions. According to the latest estimates, Australia’s gross debt is set to increase from $906.9 billion in 2023-24 to $940 billion in 2024-25. This updated figure, to be revealed in the upcoming budget papers on Tuesday, matches the forecast made in December’s mid-year review. It suggests that the national debt will have grown by approximately $45 billion under the Labor government’s first term, from $895.2 billion in mid-2022. Although the debt trajectory since Labor took office in May 2022 is upwards, Mr. Chalmers emphasized the improvement in the budget’s health, noting that the debt hasn’t blown out to the $1.1 trillion that was predicted. This better-than-anticipated outcome is partly due to the stronger-than-expected economic recovery and high commodity prices. The Labor government has chosen not to spend the majority of the revenue windfall gains. Mr. Chalmers stated that in less than three years, they have transformed two big Liberal deficits into two Labor surpluses and reduced the deficit for the current year. Despite this, he indicated that there’s still work to be done and acknowledged the global challenges including geopolitical uncertainty and more frequent extreme weather events that may necessitate increased government spending in the future. Thus, despite Australia’s debt situation being better than many other advanced economies, experts are concerned about the ability of future governments to respond to unforeseen challenges.

Source: https://www.theguardian.com/australia-news/2025/mar/24/jim-chalmers-budget-upbeat-despite-grim-debt-outlook