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Why Australia's $1 trillion debt isn't as bad as it sounds
At 32 per cent of GDP, Australia ranks well below Germany, UK, US and Japan in the debt league.
Australia's government debt hit $1 trillion this week. But the real story is that our debt is just 32 per cent of GDP.
Germany sits at 70%, the UK at 95%, the US at 125%, and Japan at 250%. So we're in a strong position.
The real risk: older loans borrowed cheaply are expiring and must be refinanced at higher rates. If governments keep running deficits when the economy is booming, that cost will keep rising.
Why it mattersHigher interest rates on refinanced loans will cost taxpayers more, especially if governments keep spending rather than cutting deficits.
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