Australia’s Federal Debt Crosses A$1 Trillion for First Time
CANBERRA, Australia — Australia’s gross federal debt has crossed the A$1 trillion mark for the first time, marking a significant milestone in the country’s public finances.
The debt figure passed the trillion-dollar threshold on Thursday as the Australian Government continued to borrow to finance its budget commitments. Recent figures from the Australian Office of Financial Management showed gross debt approaching the milestone, with additional government borrowing pushing it above A$1 trillion.
Treasurer Jim Chalmers has defended the government’s fiscal management, arguing that Australia’s debt position would have been significantly higher under the former Coalition government.
The government has also pointed to Australia’s continued AAA sovereign credit rating as evidence of the country’s strong economic fundamentals. S&P Global reaffirmed Australia’s AAA rating earlier this month, citing its institutional strength and relatively modest public debt by international standards.
According to the 2026–27 Federal Budget, gross federal debt is estimated at A$1.051 trillion in 2026–27, equivalent to about 34 per cent of GDP. It is projected to rise further in subsequent years before declining as a share of the economy over the longer term.
The milestone has nevertheless triggered renewed political debate over government spending, deficits and the cost of servicing public debt. Opposition politicians have criticised the government for allowing debt to reach the historic level, while the government says its policies have kept projected debt substantially below earlier forecasts.
Australia’s debt remains relatively low compared with several other advanced economies when measured against GDP. However, rising interest costs are expected to place increasing pressure on future federal budgets.
The A$1 trillion milestone is therefore both a symbolic and fiscal turning point, highlighting the growing challenge facing Australian governments as they balance spending commitments, economic growth and long-term budget sustainability.
Source: Australian Government Budget documents; Australian Office of Financial Management; current media reports/7News
