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Two months ago, the Parliamentary Budget Office (PBO) released its 2026-27 National Fiscal Outlook, which forecast that net debt would continue to rise in the coming years:
The PBO also forecast that the share of government revenue spent on interest costs would rise steadily from around 4.1% in 2024‑25 to 6.2% by 2029‑30, “reflecting the combined effects of higher debt levels and borrowing costs that remain above historical averages”.
“This is a significant increase from the recent low of 3.1% in 2021‑22 when interest rates were at an historic low”, the PBO said.
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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