States on borrowing binge as Morrison government predicts $1tn in net debt by 2024-25 fiscal year

The NSW treasurer, Matt Kean, says much of NSW’s increased state spending had been necessary to protect ‘the fabric of the economy’. Photograph: Wolter Peeters/AAP

Australia’s states and the ACT have almost doubled their borrowings in the past three years, placing them on track to hit the half-trillion dollar debt mark by mid-year, according to rating agency S&P Global.

The borrowing binge comes as the Morrison government projects almost $1tn in net debt by the 2024-25 fiscal year, with commonwealth outlays on the economy and health during the Covid pandemic amounting to more than 14% of gross domestic product.