State debt set to hit $1 trillion by 2030
Sub-national government debt will reach $1 trillion by 2030, with states spending nearly 10% of revenue on interest alone.
Federal, state and territory governments combined are heading toward $2.5 trillion in debt by the end of the decade. Standard & Poor's warns that rising interest rates are eating into budgets.
Almost every state except Western Australia will spend close to 10% of operating revenue just paying interest on debt. Victoria is already facing the highest interest cost ratio since 2022, while the ACT is catching up fast.
Tasmania has been hit particularly hard. The era of cheap money is over.
Escalating interest costs will soon eat into cash reserves and destroy the room governments need to respond to emergencies or new priorities.
- $1 trillion
- Sub-national debt by 2030
- $2.5 trillion
- Combined government debt by end of
- ~10%
- Operating revenue spent on interest
- Victoria
- States with highest interest cost ratio
Why it mattersStates will have less money to spend on hospitals, schools, roads and services, or will need to raise taxes or cut spending.
AustraliaAustralians using state schools and hospitals may see quality or funding pressures as states struggle to pay down debt while maintaining services.
✓ Claims checked against the source. checked 2 h ago
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