Why state government debt matters to struggling households

While the government wants its most recent budget to be in our rearview mirror, objects in that mirror are closer than they appear and can’t really be left behind.

One such object is the interest owed on state debt.

For the last two years, government interest expenses have been higher than the total funding of the Department of Human Services (DHS) – the government agency charged with providing services to the state’s most vulnerable and disadvantaged people. In 2026-27, government interest payments are forecast to be $1.9 billion, triple the budget of the Department of Human Services – or more than the budgets of the Departments of Human Services and Child Protection combined.

That is a big concern for an under-funded social services sector, but the picture is bigger than that with total interest expenses now accounting for nearly 6 per cent of general government expenditure – increasing to 8 per cent in 2029-30.

For that reason, those who rely on government services – which is all of us in one form or another – have reason to be concerned about rising state debt,........

© InDaily