Net debt and net worth
Net debt was eliminated in 2005-06, falling from a peak of 18.5 per cent of GDP in 1995-96. Since the 2006‑07 MYEFO, the forecast level of net debt has fallen from -$11.0 billion to -$12.0 billion. This reflects a higher than anticipated estimated underlying cash surplus in 2007-08.
As a result of the lower level of net debt, net interest payments are expected to be eliminated in 2007-08. Net interest payments peaked at $8.4 billion in 1996-97, but from 2007-08 the Government will have net interest receipts of $391 million.
Australian Government general government sector net worth is expected to be -$0.6 billion in 2007-08 compared with -$2.6 billion at the 2006-07 MYEFO. Net worth over the forward estimates is expected to improve and is projected to become positive in 2008-09.
Table 5 and Chart 1 provide a summary of Australian Government general government sector net worth, net debt and net interest payments.
Table 5: Australian Government general government sector net worth, net debt and net interest payments
- Net debt equals the sum of deposits held, advances received, Government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.
- Includes the impact of the sale of the Government's holding in Telstra. The net debt estimate in 2007-08 assumes that the Future Fund will increasingly be invested in equities, which are not included in the calculation of net debt.
Chart 1: Australian Government general government sector net debt
and net interest payments
Source: Data are from ABS cat. no. 5501.0, Australian Government Final Budget Outcomes and Treasury estimates.