Govt defends use of debt nearing $500b

Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

When Commonwealth government debt soared towards $300 billion under Labor, it was described as a “budget emergency” by the coalition.

This week, gross debt is set to top half a trillion dollars for the first time under the coalition, but Treasurer Scott Morrison insists there is a difference.

While gross debt will continue to grow, it will no longer be for funding pensions, schools and hospitals.

For the first time in a decade, new Commonwealth government securities from 2018/19 will pay for infrastructure and defence while ensuring the Future Fund is not drawn down.

“That is how gross debt is being used by the government in 2018/19 and beyond,” Mr Morrison told ABC radio on Wednesday.

According to the Australian Office of Financial Management, the agency that runs the government debt portfolio, $499.2 billion government securities are on issue.

There are bond tenders worth $950 million this week.

On budget day, Mr Morrison raised the debt ceiling to $600 billion from $500 billion, even though the budget papers showed debt reaching $606 billion in four years time and $725 billion by 2027/28.


Like This