Australian government debt

[8] Around two-thirds of Australian government debt is held by non-resident investors – a share that has risen since 2009 and remains historically high.

If the market did not finance all the debt on offer, then the treasury was able to borrow the outstanding amount from the Reserve Bank of Australia at a concessionary rate of 1%.

He also remarked that this form of funding implied "reduced fiscal discipline" on the government's side, leading to likely inflationary consequences, as well as adverse implications to the private bond market.

[13] During the Howard government, large budget surpluses resulted in a reduction of treasury bonds on issue.

In the context of the budget, general government sector net debt is equal to the sum of deposits held, government securities (at market value), loans and other borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.

[17][18] The net debt to GDP ratio over time is influenced by a government surplus/deficit or due to growth of GDP and inflation, as well as movements in the market value of government securities which may in turn be influenced by movements in general interest rates and currency values.

Australia's net government debt as percentage of GDP in the 2016–17 budget was estimated at 18.9% ($326.0 billion); much lower than most developed countries.

However, despite continuing to rise in aggregate terms, growth in the economy means the government expects the proportion of debt to GDP to peak at 19.2% in 2017–18 before starting to fall thereafter.

The Australian government had net positive bond holdings) in the 2006–07-year for the first time in three decades, from an original peak of 18.5% of GDP ($96 billion) in 1995–96.

The federal budget is the main mechanism that determines the government's net debt position from one period to the next.

The debt ceiling was contained in section 5(1) of the Commonwealth Inscribed Stock Act 1911[25] until its repeal on 10 December 2013.