Australia spends $60m per day on interest repayments

An eye-watering figure has been named as Australia’s biggest expense as the Treasurer sprints to the budget finish line.

Jim Chalmers is sweating over whether he will deliver a short-lived surplus when he hands down the federal budget next week.

Despite a major improvement to the budget bottom line, the government is warning the interest bill for government debt will top $112bn over the next five years – more than it spends on the family tax benefit or childcare subsidies.

The figure, to be released in Tuesday’s budget, will reveal the government spends about $700 a second – or $60m a day – on interest repayments.

Pounding the pavement early on Friday morning, the Treasurer stressed the budget was in “much better shape” but remained coy on if it could be returned to the black for the first time in 15 years.

“We wouldn't even be having this conversation if we’d taken the same approach to the budget as our predecessors,” the out-of-breath Treasurer told reporters after a 25km run.

Jim Chalmers hit the pavement on Friday as he sprints towards the budget finish line. Picture: NCA NewsWire / Martin Ollman

“We are proud of the distance that we have come in our first two budgets, but we’ve got a long way to travel still.”

The cost of servicing the debt and the National Disability Insurance Scheme are the two largest structural pressures to the budget, followed by aged care, health and Defence.

Asked later how Australians could reconcile a surplus if they were disappointed by cost-of-living relief provided in the budget, Dr Chalmers said his approach would be “vindicated” in the coming days.

“It is already clear that the responsible economic management, which we have made a hallmark of our first year in office, is paying substantial dividends when it comes to what we can then afford to do for people,” he told reporters in Canberra.

“One of our key motivations in making the budget more sustainable is so we can afford to provide cost-of-living relief and target it to the most vulnerable and invest in the future in the industrial opportunities of clean energy.

The budget is expected to show an improvement to the bottom line but only for a short time. Picture: NCA NewsWire / Martin Ollman

“It is so we can do all of the things that Labor governments are elected to do.”

While the Treasurer continued to pace himself, Opposition Leader Peter Dutton was quick off the blocks to declare a surplus all but a done deal.

“I think it’s obvious now and I think it’s predictable that there will be a surplus,” he told ABC RN.

“But we’ll wait to see the details. I think most analysts now would expect there to be a surplus in the budget next Tuesday.”

It comes as the government confirmed it would axe a controversial ParentsNext program that required recipients with kids under six to meet mutual obligations.

Originally published as Australia spends $60m per day on interest repayments