Australia faces $76 billion annual budget crisis, Grattan warns
State government debts have more than doubled since 2019, threatening fiscal sustainability without urgent reform.
State government debts across Australia have soared to levels not seen outside a world war. Interest payments now consume 0.6 per cent of annual economic output.
The problem will worsen as rising interest rates push borrowing costs higher. The Grattan Institute argues governments must act on both spending discipline and revenue.
It proposes a GST increase from 10 per cent to 15 per cent and expanding it to cover fresh food. The plan would raise $76 billion annually.
Close to half should go to income tax cuts, with the remainder supporting welfare and state services. Adults under 30 are already paying the price, with more than half having changed their intentions around having children due to cost-of-living pressures and housing unaffordability.
- more than doubled
- State debt increase since 2019
- 0.6 per cent
- Interest payments as share of output
- 76 billion dollars
- Proposed annual budget repair
- 10 per cent to 15 per cent
- Proposed GST increase
Why it mattersDelayed fiscal repair now will compound into higher taxes or reduced services later, placing the burden on future generations.
AustraliaAustralia's budget challenges directly affect wages, taxes, housing costs, and social services for all working-age Australians and retirees.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
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