In Australia, and in countries around the world, government economic support packages in response to the COVID-19 pandemic have led to large increases in government debt. This continues the trend of increasing debt since the Global Financial Crisis (GFC).
Net debt is currently at 22.5 per cent of GDP, or just over a fifth of Australia's total national income. Gross debt is obviously higher, at closer to 40 per cent. Comparing debt to GDP allows Australia's debt to be put in a global context, too.
The annual cost of debt will rise from $17.7bn in 2022-23 to a peak of $27.1bn in 2025-26, before reducing back down to $26bn in 2026-27, according to new estimates in the budget.
Our imports usually exceed our exports, giving us a trade deficit. This deficit has to be funded (paid for) either by borrowing from foreigners or by having them make "equity" (ownership) investments in Australian businesses or properties. Of course, when we borrow from foreigners, we have to pay interest on our debts.
Australian Government debt was progressively reduced after the Second World War and largely eliminated by the beginning of the 1970s.
Can I Leave the Country If I Have Debt? Legally, there is nothing stopping you from leaving the country if you have debt, unless the Australian Taxation Office (ATO) issues a Departure Prohibition Order (DPO) against you.
Australian Government debt is owned by a range of Australian and international investors. The AOFM provides information on the share of AGS on issue owned by non-residents on a market-value basis.
The world's 12th largest economy
Strong growth in 2021 solidified Australia's position as the world's 12th largest economy in 2021. Nominal GDP was around A$2.2 trillion (US$1.6 trillion) in 2021. Australia is home to just 0.3% of the world's population, but accounts for 1.7% of the global economy.
The majority (two-thirds) of our government debt is held by non-resident investors. According to the Australian Bureau of Statistics (ABS), the United States and the United Kingdom are the biggest investors followed by Belgium, Japan and Hong Kong (SAR of China).
Individuals income tax. Individuals' income tax is the single most important source of government revenue. Since the mid 1970s it has consistently raised around half of the Australian Government's tax receipts and continues to be a stable and predictable source of revenue.
Goldman Sachs Group Inc. estimates China's total government debt is about $23 trillion, a figure that includes the hidden borrowing of thousands of financing companies set up by provinces and cities.
Eritrea - Debt: 176.25% of GDP
Eritrea's high debt-to-GDP ratio is due to years of political instability, economic sanctions, and a lack of access to international markets.
Although Australia has avoided the worst effects of a recession for almost 30 years, 2023 may be the year of a recession - if one thing keeps rising. With GDP on an upward trajectory, a 0.6 per cent uptick to be precise, and unemployment at an all-time low at 3.5 per cent - we're in a good economic situation.
The Australian financial system remains strong and well placed to support economic activity. Australian banks are well regulated, well capitalised, profitable and highly liquid; they are in a strong position to continue lending to domestic households and businesses.
This year, Victoria is expected to hold about $170 billion in debt while NSW is forecast to hold about $160 billion. Foo said the states routinely under-delivered on their infrastructure plans.
Australians are the richest people in the world, with a median wealth three times that of the average American, a new report has shown.
Australia is considered a wealthy nation with a market-based economy that has a comparatively high gross domestic product and per capita income. Its economy is driven by the service sector and the export of commodities. [Explore the top universities in Australia.]
Absolutely. Australia is a fantastic place to live, even for foreigners. There aren't only advantages to living in Australia, but they outweigh the disadvantages. I love the climate, work-life balance, safety and the wide range of outdoor activities that I can enjoy every weekend.
The United States has the world's highest national debt with $30.1 trillion owed to creditors as of the first quarter of 2023.
China's debt is nearly 44% of its GDP and its local governments owe nearly $5.14 trillion. With the economic slowdown and collapse of land sales revenue, provinces and local governments in China are facing an embarrassing situation.
Excessive debt can undermine economic performance when it is followed by transfers that are economically suboptimal. More importantly, these transfers can set off financial distress behavior that undermines subsequent growth, in many cases substantially.
Australians are being warned the country's economy is on a “knife-edge“ after the Reserve Bank of Australia's string of interest rate hikes, with a “consumer recession” predicted for 2023.
Australian Government debt was progressively reduced after the Second World War and largely eliminated by the beginning of the 1970s.