The Fin and others like to quote Australia’s gross debt which is expected to be $1,022 billion or 35.5% of GDP at the end of 2025-26. By contrast the government, the IMF and OECD tend to concentrate on net debt which is expected to be much lower at $620 billion or 21.5% of GDP. This is a big difference.

Why the difference? A lot of the gross debt is covered by liquid financial assets such as cash and deposits, advances paid and investments, loans and placements. These can be easily liquidated to repay debt if needs be. These account for the difference of $402 billion leaving the net debt at $620 billion.

It is also worth noting that the

·         net debt is expected to finance $185 billion in equity-like investments (lots of that in the Future Fund). Basically this amount of debt supports the FF and other equity investments, and

·         a big part of the debt includes “unfunded” employee and superannuation liabilities of $374 billion. The latter is a purely notional amount reflecting amounts the government pays each year from consolidated revenue. It is not an actual fund used to pay super entitlements. For more click here.

Anyway adjusting for those two, leaves just $61 billion or 2.1% of GDP.