Government debt is currently a little over $463 billion, which is up around $190 billion in the three and a bit years since the Coaltion won the September 2013 election. The pace at which government debt is rising is faster now than during the stimulus measures during the GFC. And this is with Treasurer Morrison trying to hike taxes and cut spending in his quest for a budget surplus.
At current levels, governemnt debt is already at a record high and based on reasonable projections, it is set to exceed half a trillion dollars during 2017. The Mid Year Economic and Fiscal Outlook due next week will confirm this. It is also likely to confirm that debt will approach three-quarters of a trillion dollars around 2022 if it is honest with its projections.
Exactly when debt will exceed $500 billion (half a trillion in other words) is a bit of a tough call, but my money is for this badge of dishonour to be hit during May 2017, about the time Treasurer Morrison will deliver his second budget. It is likely to be when Australia’s credit rating has been downgraded, the unemployment rate is nearer 6% than 5% and when Mr Turnbull will be confronting an internal challenge to his Prime Ministership.