The total interest bill on federal government debt is expected to add up to about $110 billion across the next five years — about $700 a second.
This is more than the commonwealth spends on child care or infrastructure, according to figures from the treasurer’s office.
Forecasts for interest payments have improved a bit since October, but this year alone, the commonwealth will pay just under $18 billion in interest on almost $1 trillion of debt.
Australia’s total interest bill is then expected to climb above $20 billion in 2024-25 and reach $26 billion in 2026-27.
Treasurer Jim Chalmers said the interest bill is adding pressure to the Budget, but he has flagged a better bottom line than expected amid speculation of a surplus.
While holding the Budget details close to his chest, Chalmers said the fact there was even speculation of a surplus highlighted the government’s economic credentials after it banked most of its Budget gains.
“By making sure when we get these big upward revisions to revenue that we let most of that flow through to the bottom line,” he said in Canberra on Friday.
“What people will see on Tuesday night is a Budget that strikes a really good balance between what we need to do to help people right now and what we need to do to set this country up for the future.”
But opposition leader Peter Dutton said the better bottom line was driven by high commodity prices and he accused the government of increased spending.
“The revenues ironically from royalties, company, tax receipts are through the roof,” he told ABC radio.
“But we will wait to see the detail. I think most analysts now would expect there to be a surplus.”
In October, the government banked more than 90% of its upward revisions to revenue from high commodity prices.
Chalmers said the cost of servicing debt was one of the fastest-growing pressures on the Budget.
Dutton flagged his Budget reply speech on Thursday would outline his party’s values while refusing to speculate on whether there will be any major policy announcements.
“No opposition has released its full policy manifesto within the first year of being an opposition,” he said.
“The whole idea of opposition is to work on your policy to catch up with stakeholders to reconsider your vision for the country and then present that in an election campaign, which is still 18 months, two years away.
“We will have a few more things to say on Thursday night and detail a bit more about our approach, our values and where we see the direction of the country.”
Other major areas of spending include defence, health, aged care and the National Disability Insurance Scheme.
The government will also extend the Medicare rebate for heart check-ups to mid-2025.
Heart disease is responsible for almost one in 10 deaths and for six per cent of Australia’s total disease burden.
More than 455,000 heart health checks have taken place since they were introduced in April 2019.
Health minister Mark Butler said talking to a GP about heart health not only saved lives but helped to prevent or catch the disease before it was too late.
“Our government’s action on this has the potential to save thousands of lives,” he said.
:
Any feedback or news tips? Here’s where to contact the relevant team.