By Jinjing Li and Erick Hansnata
Public Debt in Australia
Since the last surplus in 2008-09, the Australian budget has been in the red. The amount of government net debt has increased on average by $42 billion every year between 2009-10 and 2014-15 on the basis of the latest MYEFO estimates published in December (Treasury, 2015). The net public debt in 2015-2016 is estimated to be $ 278 billion, which is around 17% of total GDP. This means the amount of public debt every Australian carries has increased from just under $2000 in 2009-2010 to more than $11,000 in the financial year 2015-2016. If we exclude young children and the elderly, the average amount of debt for the working age population (15-64) in Australia is around $17,700. This is equivalent to the earnings of nearly 12 weeks of full time work based on 2015’s average weekly earnings (AWE) published by the ABS. In another word, the nation’s debt is about the same size of the total earnings if everyone between 15 and 64 in Australia works full time for 12 weeks and earns an average salary.
How much debt is Australia accumulating?
Sources: NATSEM’s calculation based on MYEFO, ABS Average Weekly Earnings Statistics (ABS, 2016a) and Estimated Residence Population (ABS, 2016b). 2015-2016 data is estimated based on the latest MYEFO.
How does Australia compare internationally?
In international comparison, however, Australia’s total net debt as a percentage of GDP in 2015 is below average among the advanced economies (as reported by the International Monetary Fund in 2016). Relative to the size of its economy, Greece, Japan, Portugal and Italy have the largest public debts which exceed GDP while the size of the Australian public debt is 20% below GDP. However, in terms of the annual fiscal deficit1 as a percentage of GDP in 2015, Australia is accumulating more new debt than most advanced economies as reported by IMF.
Source: International Monetary Fund (IMF) – only advanced economies with a 2015 estimate are included.
1 This is referring to the government net lending/borrowing, which is calculated by revenue minus total expenditure.
Australia, Treasurer of the Commonwealth of Australia and Minister for Finance of the Commonwealth of. (2015). Mid-Year Economic and Fiscal Outlook 2015-2016. Retrieved 29 April 2016, from http://www.budget.gov.au/2015-16/content/myefo/download/MYEFO_2015-16_Final.pdf
International Monetary Fund. (2016). World Economic Outlook Database: April 2016. Retrieved 29 April 2016, from https://www.imf.org/external/pubs/ft/weo/2016/01/weodata/index.aspx
Office, Australian Taxation. Tax Statistics. Retrieved 29 April 2016, from https://www.ato.gov.au/About-ATO/Research-and-statistics/Previous-years/Tax-statistics/
Statistics, Australian Bureau. (2015). Australian Demographic Statistics September 2015 Catalogue Number 3101.0. Retrieved 29 April 2016, from http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3101.0Sep%202015?OpenDocument