The International Monetary Fund warned last week that the Commonwealth might have to bail out state and territory governments because of soaring post-pandemic spending and ballooning debt levels.
It was a reminder that although much attention has focused on rising federal expenditure, which will soon hit 27 per cent of GDP (the highest mark outside of the pandemic since the late 1980s), state governments play a significant role in the budget predicament that risks normalising ever-higher spending, taxes, and debt in Australia.
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