Governments face trillion dollar debt from virus recession

Net debt across all levels of government is forecast to reach more than $1.4 trillion by 2023-24, leaving budgets that will struggle to get back into surplus

24/11/2020 12:30:00 PM

Net debt across all levels of government is forecast to reach more than $1.4 trillion by 2023-24, leaving budgets that will struggle to get back into surplus

Net debt across all levels of government is forecast to reach more than $1.4 trillion by 2023-24, leaving budgets that will struggle to get back into surplus.

Normal text sizeLarger text sizeVery large text sizeThe coronavirus recession will leave state and federal governments with more than $1.4 trillion in net debt by by 2024 and budgets that will struggle to get back into surplus without higher tax collections and unprecedented levels of economic growth.

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As Reserve Bank deputy governorGuy Debelle warned against the early end of public spending to support the economy, the Andrews government unveiled plans on Tuesday to lift its net debt levels by 250 per cent to keep Victorians in work.Premier Daniel Andrews and Treasurer Tim Pallas unveiled plans to lift Victoria's net debt levels by 250 per cent.

Credit:Getty ImagesCombined, the states and territories carried $125.5 billion in net debt in the 2019-20 financial year. NSW was in the strongest position with negative net debt of $10.4 billion.But the response to the pandemic recession has forced the states, territories and federal governments into the biggest increase in public spending since World War II. headtopics.com

AdvertisementVictoria's net debt, which reached $44.3 billion last financial year, is now on track to hit $154.8 billion in 2023-24. It expects to run a $23.3 billion budget deficit this financial year, only second in size to the Morrison government's shortfall of $213.7 billion.

The NSW government's net debt is expected to go from negative to reach $104.3 billion by 2023-24.This year, state and territory net debt is forecast to climb to at least $235.1 billion. That's on top of the federal government's $703 billion in net debt, which is a $212 billion increase on what it had at the end of 2019-20.

By 2023-24, net debt across all levels of government is forecast to reach more than $1.4 trillion, of which $966 billion will be held at the federal level.Queensland and the ACT are yet to release their 2020-21 budgets but they are expected to reveal an increase in debt over the next four years. Only one state, Western Australia, is forecasting to peak and then start reducing its debt level but that won't occur until 2023-24.

Read more: The Sydney Morning Herald »

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Governments have no choice but to support the economy through recession & helping those hardest hit makes sense. Investments in a clean energy transition are sensible as the growing costs of climate change will become a permanent hit to the economy and clean energy a benefit. For perspective on federal debt well before Covid-19. Rapid increase in debt from 2013-2019 with no excuse.

Morrison caused this recession well before COVID19. It’s the morrisonrecession Totally fine to get into debts as long as ROI is achieved. Accounting 101 ..a business cash rich with no debts is a regressive business. Progressive businesses borrow to grow ,it is all about being able to generate huge returns and jobs ,then save the returns to pay off debts.

Get all major economies to print money and pay off debts. It's all about relativity. If every body do thisv at same time , debts is reduced and currencies exchange not affected. Besides bit coin and cyber currencies are taking over. Eventually hard copy currencies are redundant. Oh not that surplus myth again.

Don’t at all care. It is the least important thing at the moment. Labor plans to repay this with loans from China? Stop giving into miners and that deficit becomes a surplus within a decade or less Dan Andrews a Leader for all Morrison is not