Every state and territory government bar one will have to start cutting key services because of the size of the interest bill on their debt, which is growing twice as fast as federal debt and is on track to surpass $1 trillion by the turn of the decade.
Data compiled by ratings agency S&P Global for this masthead show the interest on state debt is now so large and growing so quickly that premiers and state treasurers will have to make politically difficult trade-offs that could hit services or infrastructure.
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According to S&P, which tracks gross debt levels, the biggest increase since 2019 has been overseen by Tasmania’s Coalition government. By the 2026-27 financial year, it will have climbed by 357 per cent. It is expected to accelerate to 552 per cent by 2030.