FRIDAY 16 OCTOBER 2026 – Australia’s states are sliding deeper into debt, with new analysis showing that while Victoria is comfortably leading the race to the bottom, other states' debt bills are catching up fast.
Analysis of 2026-27 state budgets shows Victoria has the highest debt in the country on every key measure:
- Net debt: $176 billion
- Net debt as a share of its economy: 24.9% of Gross State Product
- Net debt per person: $24,148
- Interest burden: 14.9% of Victorian Government revenues goes to paying interest
AMPLIFY’s state budget analysis also examined the amount of debt per person forecast to be added by each state over the next 4 years. The analysis shows that while Victoria is clearly in a league of its own, other states are adding to debt at an even faster rate.
Over the next 4 years, Victoria is expected to add $4,022 in additional debt per person. By comparison, NSW will add $4,102, South Australia $7,075 and Queensland $9,386 per person.
AMPLIFY Executive Director Martin Codina said Victoria’s position is not one that other states should be rushing to emulate.
“The Reserve Bank of Australia’s latest Financial Stability Review cautions that financial risks and borrowing costs are rising, limiting governments’ ability to respond to economic shocks,” Mr Codina said.
“This is the position Victoria finds itself in today. Victoria's debt is approaching $200 billion, and is more than NSW, Queensland and Tasmania combined. Interest alone is costing Victorians $24 million a day.
“Alarmingly, our analysis shows NSW, South Australia and Queensland are piling on debt at an even faster rate.
“As debt mounts Federally and across the states, it risks undermining Australia's competitiveness, resilience and future prosperity. With global uncertainty growing, now is the time to be getting on top of government finances, not making them worse.
“Victoria is leading a national race to the bottom. The scale of Victoria’s debt demands that every party contesting the upcoming state election on 28 November commit to a credible plan to stop borrowing and start paying down the debt.”
Independent economist David Williams-Chen of Positive Economics Advisory, which analysed the budget data, said: "Victoria enters this period with the highest debt of any state relative to its economy, at 24.9% of gross state product, and the largest interest bill against its own revenue. Global interest rates are rising, so the cost of carrying that debt is going up. If another event on the scale of 2020 hit, Victoria would have less fiscal room to respond than most of its peers, and its finances look stretched. With the economy at full employment, now is the time to put the budget into better shape rather than running further cash deficits."
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