How sustainable is sub-national public debt in Australia??

Anthomy J. Malkin and Julian Pearce

Economic Analysis and Policy, 2014, vol. 44, issue 4, 364-375

Abstract: Since the Global Financial Crisis the public indebtedness of Australiaùs States and Territories has risen significantly due to sizeable fiscal deficits. This paper examines the stability of sub-national governmentsù indebtedness before gauging the fiscal effort needed to scale back public debt to GSP ratios to ten-year average levels. To do this, we first derive key debt sustainability formulae which are then applied to relevant sub-national data. The analysis reveals that under macroeconomic conditions and fiscal settings in 2012ó13, debt levels were unstable for all State and Territory general governments. Moreover, virtually all sub-national governments in Australia need to turn existing primary budget deficits into substantial surpluses to restore public debt to levels experienced on average over the previous decade. This is not in prospect without even more substantial fiscal consolidation than currently envisaged in State and Territory budgets.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592614000587
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:44:y:2014:i:4:p:364-375

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().