Victoria's debt set to be a third of gross state product by 2027
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The news: Victoria's state debt prediction has jumped more than $6 billion compared to May estimates, and is expected to surge to a third of current gross state product (GSP) by 2027.
The numbers: Victoria's 2023-24 budget update has revealed the state's net debt is expected to reach $135.5 billion by June next year and grow to $177.8 billion by June 2027, a third of FY23's chain volume derived gross state product of $535.5 billion.
The context: The debt spike has been underpinned by high interest rates, rising costs and blowouts in infrastructure projects like the North East Link. The road project was pitched to Victorians to cost $10 billion in 2016, then $15.8 billion in a business case a year later and will now cost $26 billion according to today's budget update. Victoria is the most indebted state in Australia in gross and per capita terms.
The sources: ABS National Accounts, AAP
