Aussies to save more than $60bn in interest payments over the decade
The Albanese Government’s fourth federal budget on Tuesday will show a $177bn improvement to gross debt for 2024-25 compared to forecasts three years ago before Labor took office.
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Australia’s debt will reach $940 billion this financial year, with Labor’s efforts to rein in the eye-watering figure expected to save taxpayers more than $60bn in interest payments over the decade.
The Albanese Government’s fourth federal budget on Tuesday will show a $177bn improvement to gross debt for 2024-25 compared to forecasts three years ago before Labor took office.
After delivering two surpluses, this financial year’s budget bottom line is expected to only marginally improve on the $26.9bn deficit forecast from December.
The budget is due to remain in the red across the forward estimates, with the opposition criticising Labor for being unwilling to say when it might return to surplus.
Asked if the Coalition would get back in the black in its first term if successful at the election, opposition finance spokeswoman Jane Hume said there should be a “credible pathway” in the medium term.
“Doing it in the short term will be very hard, even for a Coalition government, which will instil back that fiscal discipline into our budgetary processes”, she said.
“There is so much baked in Labor spending that unwinding that and walking away from that or growing the economy to defeat that is going to take some time.”
Treasurer Jim Chalmers said the reduction in debt — previously forecast to hit $1.1 trillion by now under the Coalition — would save taxpayers tens of billions of dollars by 2032-33.
“In dollar terms, Labor’s responsible economic management has delivered the biggest budget turnaround in a parliamentary term in history,’ he said.
“By getting the budget in better nick, we’ve been able to find room to help with the cost of living, strengthen Medicare, and invest in the future.”
Gross debt as a share of Gross Domestic Product (GDP) is now forecast to peak at 37 per cent, which will be 7.9 points lower than forecast when Labor came to government in 2022.
Mr Chalmers said the budget was in “much better nick now than when we inherited it,” but conceded there was “more work to do”.
“This budget puts a premium on responsible economic management, helps finish the fight against inflation and ease the cost of living for Australians,” he said.
Mr Chalmers said Labor had shown it was possible to make progress on inflation “without sacrificing jobs”.
“Inflation is down, real wages and living standards are growing again, unemployment is low, debt is down, interest rates have been cut and growth is rebounding solidly,” he said.
On Monday Anthony Albanese announced the government done a $2.8bn deal with Queensland that will ensure public schools are fully funded, meaning all states and territories are now signed up to similar agreements.
“This money is tied to real reforms like evidence based teaching practises, phonics and numeracy checks, catch up tutoring and more mental health support,” the Prime Minister said.
Commonwealth funding to state schools will rise by about $16.5bn over the decade to 2034, which Mr Albanese said represented the “biggest new investment in public schools by an Australian government ever”.
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Originally published as Aussies to save more than $60bn in interest payments over the decade
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