Australia's debt service costs surge to $50,000 per minute as debt nears $1 trillion

Australia’s national debt is driving record interest costs, with the Commonwealth disbursing about $24.4 billion in interest in the last financial year. That figure translates to roughly $67 million a day, about $3 million an hour, $47,000 a minute and around $774 a second, underscoring how quickly debt service is consuming budget space.

Analysts say the interest bill is among the fastest-growing items in the federal budget and is projected to swell beyond $38 billion by 2028-29. The rising cost comes on top of a gross federal debt that sits near $959 billion and, according to projections, could reach about $1.2 trillion by 2028-29. The numbers illuminate the scale of the challenge facing policymakers as debt levels press against record highs.

Australia’s opposition and critics have seized on the figures to call for tighter fiscal discipline. In her first major economic speech, Opposition Leader Sussan Ley warned that the debt is already “around $959 billion and climbing” and that, by the government’s own projections, it will hit $1.2 trillion by 2028-29. “Our gross federal debt is already around $959 billion and climbing,” she said, arguing that the government’s spending trajectory risks leaving less room for essential services.

The sheer scale of interest payments has prompted questions about what else that money could fund. James Paterson, the Coalition’s finance spokesman, told the Daily Mail that with that cash, the government could, for example, buy thousands of homes or fund other high-profile expenditures. He suggested the debt could finance 28,760 homes at today’s median value, or allow a much broader set of capital projects. He also pointed to lists of eye-catching hypotheticals, such as furnishings and other items, as a way to illustrate the opportunity costs of sustained debt growth.

The debate reflects broader concerns about the budget’s composition. The interest bill, viewed by many economists as a fast-growing expense, is increasingly competing with priorities like hospitals, schools and tax relief for attention and resources. If debt service continues to rise, critics warn, a growing share of revenue will be unavailable for services and investment in growth-enhancing measures.

Top economist Stephen Koukoulas, a former chief economist at Citibank, has argued that much of the debt increase over recent decades occurred under Coalition governments. In a recent analysis for Independent Australia, he noted that over the past half-century, Coalition governments added about $605 billion to gross government debt, while Labor governments added about $406 billion. The accounting underscores how fiscal trajectories, not merely policy choices, have shaped the country’s debt load and its servicing costs over time.

Economists and policymakers alike acknowledge that the trajectory requires careful stewardship. While projections vary depending on growth, interest rates and policy decisions, the numbers on debt and debt service have become central to political debate ahead of budget cycles. Supporters of stronger fiscal restraint argue that bringing down the debt-to-GDP ratio could, over time, reduce the burden of servicing debt, freeing up room for targeted investments that support jobs and productivity. Critics, meanwhile, warn against cutting essential services or investment in response to rising debt costs, urging a more nuanced approach to spending reform, growth, and revenue.

As the discussions unfold, the country watches the interaction between debt levels, interest costs and the capacity of the budget to fund everyday services. The debate is likely to intensify in the months ahead as economic forecasts evolve and political lines harden, with both sides prioritizing fiscal resilience and the potential trade-offs of any consolidation plan.