The 2022-23 Mid-Year Financial Report reveals a revised estimated total interest bill of $3.863bn for the financial year

The opposition has blasted the Andrews government for its “culture of waste” as figures show a huge rise in interest repayments.

Victoria’s interest bill is now costing taxpayers $10m a day.

The figure has been revealed for the first time in the 2022-23 Mid-Year Financial Report which shows a revised estimated total interest bill of $3.863bn for the financial year – or $10.58m a day.

It follows a $428m increase in actual interest repayments over the six months to December, compared to the same period 12 months earlier.

Victoria is hurtling toward a record debt level of $165.4bn by 2025-26, with an interest bill tipped to reach more than $7.4bn by that time.

Treasurer Tim Pallas and Premier Daniel Andrews are facing criticism over the record debt. Picture: David Crosling

This figure could blow out further if the cash rate continues to rise.

An estimated $400m was added to the ballooning debt bill as a result of the most recent interest rate rise.

Credit agency Moody’s Investor Services last week flagged Victoria’s interest payments as a major issue.

It found Victoria was set to pay 8.6 per cent of its income on interest payments by 2026, up from 3.9 per cent in 2022.

Moody’s vice president John Manning said in his report last week Victoria’s debt burden was concerning.

“Although high debt burdens pose a risk for all states, NSW and Victoria are more affected than the others given the significant forecast increase in their debt burdens in the period up to 2026 and amid additional expenditure headwinds from high healthcare spending and wage inflation,” he said. “However, the states’ fiscal positions are supported by strong institutional frameworks, which we expect to allow them to adjust capital expenditure as required if borrowing costs continue to rise.”

Shadow Treasurer Brad Rowswell said $10.5m could buy 52 ambulances at $200,000 apiece, 112 maternity nurses or a single breast cancer centre.

“Labor’s $10m a day interest bill is crushing our ability to invest in what really matters – the people of Victoria,” he said.

“Every dollar wasted on interest repayments is one less to get our children’s education back on track, ensuring an ambulance shows up on time or to fix our dangerous and pothole-riddled roads. This is a government mired in debt and with a culture of waste. Unless the state government starts treating taxpayers’ money with respect, everyday services that Victorians depend on will continue to suffer.”

Victorian net debt, as a share of the economy, grew from 5.5 per cent in 2018-19 to 19.3 per cent in 2021-22.

Government forecasts predict it will reach 24.6 per cent in 2025–26 when the state’s debt hits an expected $165bn record. Victoria’s credit score was downgraded by Moody’s, and S&P Global, in late 2020.

A government spokesman said the budget will reflect “prevailing economic conditions”. “Just as Victorians with a home loan are finding their payments are increasing, so are we,” he said.