Treasurer Says National Debt Cut by $149 Billion

A general view of housing in the suburb of North Sydney facing towards the central business district (CBD) in Sydney, Australia on June 28, 2024. Lisa Maree Williams/Getty Images

The federal government claims it has cut Commonwealth debt by $149 billion (US$101 billion) over two years.

It comes alongside the government’s announcement that it expects a budget surplus in the mid-teens, to be released soon.

Australian Treasurer Jim Chalmers says it’s the first back-to-back surplus delivered by a government in almost two decades.

He said government debt was 10.6 percentage points lower than when Labor came to power, and credits the surplus with less spending.

Final budget outcomes for the 2023/24 financial year show debt has fallen to $906.9 billion, $149.1 billion less than what was predicted in 2022.

“Through responsible economic management and spending restraint we’ve been able to get rid of a big chunk of the debt left to us by the Liberals and Nationals,” Chalmers said.

“Lower debt saves taxpayers on interest costs, helps in the fight against inflation and makes more room in the budget for what matters most like Medicare, aged care and defence.”

The lower debt level should save around $80 billion over the upcoming decade.

“It’s an important way to take pressure off inflation, rebuild fiscal buffers during a time of global economic uncertainty, and build a better foundation to fund our nation’s most pressing priorities,” Chalmers said.

High Commodities, Taxes Contributing to Surplus

Shadow Treasury spokesperson Jane Hume told Sky News she said the data presented by the treasurer was “very selective.”

“How much more would the debt have been reduced by had the government not spent an additional $315 billion over the last three budgets, which is what we’ve seen?” she said.

“In fact, they’ve spent $4 for every $1 that they have saved, and we know that because the revenue that’s come in has essentially been two things—high commodity prices and that insidious bracket creep caused by high inflation, so it hasn’t been the hard work of Jim Chalmers to get the budget under control.”

Hume said economic conditions had deteriorated since the pandemic and that the cost of living was still the number one issue among Australians.

“Just before COVID hit, we had a structurally based budget and that was a really important milestone to make, that was what gave us the flexibility and resilience during COVID to be able to be so generous and to keep ... businesses in business and employees in jobs,” she said.

Hume also said Chalmers had delivered very small surpluses.

Full budget figures are expected to be released at the end of September.