Australia’s national debt hits $1 trillion milestone

Australia is marking a “sad day”, opposition economy spokesman Tim Wilson has said as the national debt ticks over $1 trillion.

Federal debt is set to briefly pass the milestone on Thursday morning as the Australian Office of Financial Management borrows another $4bn, before dipping back down on Friday when other loans are settled.

“Today is ultimately a sad for the country,” Mr Wilson said, claiming that “this government is addicted to spending”.

“It’s addicted to inflation, and it’s constantly focused on how it spends that spending and … stokes the economy, stokes the inflation, then they go and tax the inflation and they spend the inflation in a vicious cycle, which is why Australians are falling further and further behind.”

He warned that future generations would ultimately bear the cost, saying that “today’s debt is tomorrow’s taxes”.

“This is why the task is so important, to confront debt, to make sure it doesn’t continue to be part of an intergenerational legacy that’s being left behind,” Mr Wilson said.

Labor has pumped billions into cost-of-living relief since its elections in 2022, as wars across the globe strain supply chains and drive up energy costs.

The Albanese government initially delivered two back-to-back surpluses before slipping back into deficits for the last two federal budgets, with further deficits forecast until the mid 2030s.

However, it has found more than $100bn in savings and reprioritisations.

A spokesperson for Treasurer Jim Chalmers pushed back against Mr Wilson’s claims, saying that “gross debt would have crossed the trillion dollar mark three years ago”.

“If the Coalition had been in power today gross debt this year would already be approaching 1.2 trillion dollars,” they said.

“The government’s responsible economic management has got debt down from what we inherited from the Coalition and Australia is avoiding more than $70bn in interest.”

Australia has one of the lowest debt burdens when compared to other advanced economies, including the G7 countries.

Moody’s and S&P Global, two of the world’s biggest credit rating agencies, earlier this month upheld Australia’s triple AAA credit ratings.