Who Added the Most to Australia’s National Debt? The Governments, Treasurers and the COVID Debt Explosion
- Brian AJ Newman LLB
- Aug 31
- 13 min read
By Brian AJ Newman, LLB
I am no financial expert, and we should all do our own research, but if I am reading the documents correctly, this is my take on things.
Australia’s Commonwealth gross debt is approaching $1 trillion and is forecast to exceed that level.
That naturally raises a question which should be capable of being answered with numbers rather than political slogans:
Which Australian Government actually accumulated the most debt?
The answer is reasonably clear.
Measured by the nominal increase in Commonwealth gross debt, the largest increase occurred while the Liberal–National Coalition was in government between 2013 and 2022.
A particularly large component of that increase occurred during the COVID-19 pandemic under Prime Minister Scott Morrison and Treasurer Josh Frydenberg.
That does not mean every dollar of debt can simply be attributed personally to a Prime Minister or Treasurer. Governments inherit existing expenditure commitments, economic conditions and debt, while recessions, disasters and pandemics can dramatically affect revenue and expenditure.
But the historical numbers tell us which governments were in office when the debt was accumulated.
And those numbers are worth examining.
First: what do we mean by “national debt”?
For this discussion I am primarily using Commonwealth gross debt, represented by the face value of Australian Government Securities on issue.
That is broadly the headline debt measure commonly referred to when politicians and commentators talk about Australia reaching “$1 trillion of debt”.
The Parliamentary Budget Office explains that gross debt principally represents Australian Government Securities issued by the Commonwealth and does not deduct financial assets held by government.
Net debt is a different measure and can provide a better picture of the government's overall financial position.
For international comparisons, another broader measure — general government debt as a percentage of GDP — is more useful.
So these figures should not be mixed together indiscriminately.
The starting point: the Howard Government
When the Howard Coalition Government left office following the November 2007 federal election, the face value of Commonwealth Government Securities outstanding was approximately:
$53.6 billion
Treasury confirmed that figure for 30 November 2007. (Australian Parliament House)
Government
Howard Coalition Government
Party
Liberal–National Coalition
Prime Minister
John Howard
Treasurer
Peter Costello
It is therefore fair to say that the incoming Rudd Labor Government inherited a Commonwealth gross-debt position of only around $54 billion.
That provides a useful starting point.
Labor: 2007–2013
The Rudd Government came to office in November 2007.
Not long afterwards Australia confronted the Global Financial Crisis.
The Commonwealth responded with substantial fiscal stimulus and subsequently ran continuing budget deficits.
By 30 June 2013, Commonwealth Government Securities outstanding had reached approximately:
$257 billion
The Reserve Bank records total Commonwealth Government Securities at about $257 billion at June 2013. (Reserve Bank of Australia)
That means that from approximately November 2007 to June 2013, Commonwealth gross debt increased by approximately:
$203 billion
or roughly:
380%
from its relatively small starting base.
Governments responsible during this period
Rudd Labor Government
Prime Minister: Kevin Rudd Treasurer: Wayne Swan
Gillard Labor Government
Prime Minister: Julia Gillard
Treasurer: Wayne Swan
Second Rudd Government
Prime Minister: Kevin Rudd
Treasurer: Chris Bowen
Chris Bowen became Treasurer in June 2013 and held the position until Labor lost government in September 2013.
So the overwhelming majority of the debt accumulated during the 2007–2013 Labor period occurred while Wayne Swan was Treasurer.
Coalition: 2013–2022
This is where the biggest nominal increase occurred.
When the Coalition returned to government in September 2013, Commonwealth Government Securities were approximately $257 billion at the end of the preceding financial year.
By the end of 2021–22, they were approximately:
$895 billion
Treasury/AOFM data contained in the October 2022 Budget records the face value of Australian Government Securities at approximately $895 billion for 2021–22. (Treasury)
That means gross Commonwealth debt increased by approximately:
$638 billion
during the period encompassing the Abbott, Turnbull and Morrison Coalition governments.
In percentage terms:
$257 billion → $895 billion
represents an increase of approximately:
248%
That is substantially more new debt in dollar terms than was accumulated during the preceding Rudd–Gillard–Rudd governments.
Which party therefore accumulated the most debt?
Using these approximate government-transition figures:
Period | Government | Approx. starting gross debt | Approx. ending gross debt | Increase |
2007–2013 | Labor | $53.6b | $257b | +$203b |
2013–2022 | Coalition | $257b | $895b | +$638b |
2022–2025/26 | Labor | ~$895b | $982b estimated | +$87b |
On that basis:
The Coalition accumulated the largest nominal increase in Commonwealth gross debt.
The approximate increase during the 2013–2022 Coalition period was more than three times the nominal increase recorded during Labor’s 2007–2013 period.
That statement requires an important qualification, however.
A very large part of the Coalition increase occurred during an extraordinary event:
COVID-19.
The Coalition Treasurers during the debt increase
Three Coalition Treasurers presided over the 2013–2022 period.
Joe Hockey
Treasurer: September 2013 – September 2015
Prime Minister: Tony Abbott
Gross debt continued increasing after the Coalition took office.
Historical Budget data records Commonwealth gross debt at:
$319.5 billion in 2013–14
$368.7 billion in 2014–15
Scott Morrison
Treasurer: September 2015 – August 2018
Prime Ministers: Malcolm Turnbull and, briefly, Tony Abbott immediately before the leadership transition.
Gross debt continued rising.
Historical Budget figures record:
2015–16 — $420.4 billion
2016–17 — $501.0 billion
2017–18 — $531.9 billion
Debt therefore rose substantially before COVID existed.
That point is important.
It is inaccurate to attribute the entire Coalition-era debt increase to the pandemic.
Josh Frydenberg and the COVID debt explosion
The biggest single acceleration occurred while:
Prime Minister
Scott Morrison
Treasurer
Josh Frydenberg
Government
Liberal–National Coalition
The Parliamentary Library records Commonwealth gross debt at:
$534.4 billion in March 2019
By April 2022 it had reached:
$885.5 billion
That is an increase of approximately:
$351.1 billion
in just over three years.
The Parliamentary Library directly attributes the major pandemic-era increase to government economic support associated with COVID-19. (Australian Parliament House)
The percentage increase was approximately:
65.7%
This occurred while the Morrison Coalition Government was in office.
Why did debt rise so dramatically during COVID?
COVID was not an ordinary economic downturn.
Governments effectively closed significant sections of the economy.
Borders were closed.
Businesses were restricted or ordered to stop trading.
Workers were unable to work.
Government consequently introduced enormous fiscal support programs including:
JobKeeper;
increased JobSeeker payments;
cash-flow support for businesses;
health expenditure;
vaccine expenditure;
support for affected industries;
stimulus payments;
state and territory support; and
numerous other pandemic programs.
Tax revenue was simultaneously exposed to an extraordinary economic shock.
Borrowing therefore increased dramatically.
The Parliamentary Library concluded that Australian Government debt reached levels not seen since the 1950s as economic support during COVID produced significantly larger budget deficits. (Australian Parliament House)
So although the Morrison Government accumulated an enormous amount of debt, the circumstances must form part of any intellectually honest assessment.
But COVID does not explain all of the Coalition increase
This is where the numbers become particularly interesting.
Before the pandemic, Commonwealth gross debt had already increased considerably.
Using the Parliamentary Library's figure:
2013: approximately $257 billion
March 2019: approximately $534.4 billion
That means debt had already increased by around:
$277 billion
before COVID.
Then between March 2019 and April 2022 another approximately:
$351 billion
was added.
In broad terms, therefore, the Coalition-era debt increase can be separated into two large components:
Before COVID
Approximately +$277 billion
COVID period
Approximately +$351 billion
So it would be incorrect to claim that Australia's Coalition-era debt accumulation was solely a product of COVID.
More than a quarter of a trillion dollars had already been added before the pandemic.
Who was Treasurer when the most debt was accumulated?
If the question is narrowed from government to individual Treasurer, the answer is more complicated because debt does not neatly move with ministerial appointment dates.
However, the largest and fastest increase clearly occurred during the period in which:
Josh Frydenberg was Treasurer
Frydenberg served as Treasurer from August 2018 until the Coalition lost office in May 2022.
The COVID response occurred almost entirely during his tenure.
Gross debt was approximately $542 billion at 30 June 2019, shortly before COVID, according to historical Budget data. (Budget Archive)
By the end of the Coalition Government it was approaching approximately $900 billion.
That represents an increase of roughly:
$350 billion
over the period dominated by the pandemic response.
Accordingly, measured simply by the increase in the stock of Commonwealth gross debt occurring while a Treasurer held office:
Josh Frydenberg presided over the largest nominal debt increase of any Australian Treasurer.
But context matters enormously: he was also Treasurer through the largest government economic intervention in modern Australian peacetime history.
Labor returns: Anthony Albanese and Jim Chalmers
Labor returned to office following the federal election on 21 May 2022.
Prime Minister
Anthony Albanese
Treasurer
Jim Chalmers
Party
Australian Labor Party
The Commonwealth gross debt stock inherited at around that time was approximately:
$895 billion
for 2021–22. (Treasury)
The 2026–27 Budget estimates gross debt at:
$982 billion at the end of 2025–26
and forecasts:
$1.051 trillion at the end of 2026–27.
Using $895 billion as an approximate starting benchmark, debt has therefore increased to the 2025–26 estimate by about:
$87 billion
or:
9.7%
under the Albanese Labor Government.
If the 2026–27 forecast of $1.051 trillion eventuates, the increase from the approximate 2022 starting point would be around:
$156 billion
or approximately:
17.4%
But the latter figure is a forecast, not debt already incurred as at today.
That distinction matters.
Labor has also reduced the debt trajectory it inherited
There is another fact that should be included if the analysis is going to be balanced.
Although the nominal stock of gross debt remains high and is forecast to increase, the current Labor Government has benefited from stronger revenue and has produced materially better debt outcomes than were forecast around the time it took office.
Treasury's 2026 analysis says that at the 2022 Pre-Election Economic and Fiscal Outlook, gross debt was projected to peak at approximately 44.9% of GDP in 2024–25.
Under the 2026–27 Budget projections, gross debt is instead expected to peak at approximately:
35.8% of GDP in 2028–29
before declining over the medium term. (Treasury)
Treasurer Jim Chalmers also stated in the 2026–27 Budget speech that gross debt at the end of 2025–26 would be approximately $982 billion and that the Budget position had improved substantially compared with the position inherited in 2022. (Treasury Ministers)
Those are Government claims based upon Treasury Budget figures, and they should be understood as such.
Nevertheless, the underlying Budget data support the proposition that the debt trajectory has been substantially revised downward relative to the forecasts existing around the change of government.
The full political picture
If we look only at nominal Commonwealth gross debt, the broad progression is striking:
Howard Coalition
November 2007
Approximately:
$53.6 billion
Treasurer: Peter Costello
Rudd/Gillard/Rudd Labor
2007–2013
Approximately:
$53.6b → $257b
Increase:
+$203 billion
Principal Treasurer:
Wayne Swan
Final Treasurer:
Chris Bowen
Abbott/Turnbull/Morrison Coalition
2013–2022
Approximately:
$257b → $895b
Increase:
+$638 billion
Treasurers:
Joe HockeyScott MorrisonJosh Frydenberg
Albanese Labor
2022–2025/26 estimate
Approximately:
$895b → $982b
Increase:
+$87 billion
Treasurer:
Jim Chalmers
Put visually: which government added the most?
Approximately:
Rudd/Gillard/Rudd Labor:+$203 billion
Abbott/Turnbull/Morrison Coalition:+$638 billion
Albanese Labor to 2025–26 estimate:+$87 billion
The Coalition-era increase therefore represents by far the largest increase in nominal Commonwealth gross debt among these periods.
And within that Coalition period, the greatest acceleration occurred under Scott Morrison as Prime Minister and Josh Frydenberg as Treasurer during COVID.
But percentage increases can tell a different story
There is an interesting statistical problem here.
Labor's increase between 2007 and 2013 looks much larger when expressed as a percentage because it began from an exceptionally low debt base:
$53.6b → $257b
approximately:
+380%
The Coalition:
$257b → $895b
approximately:
+248%
Albanese Labor to the 2025–26 estimate:
$895b → $982b
approximately:
+9.7%
So:
Largest percentage increase
Rudd/Gillard/Rudd Labor
Largest dollar increase
Abbott/Turnbull/Morrison Coalition
That is why political claims about “who increased debt the most” need to specify exactly what is being measured.
The Treasurer table
Government | Party | Treasurer | Approximate gross debt movement during relevant era |
Howard | Coalition | Peter Costello | Left approximately $53.6b |
Rudd/Gillard | Labor | Wayne Swan | Majority of rise toward $257b |
Rudd | Labor | Chris Bowen | Brief final 2013 period |
Abbott | Coalition | Joe Hockey | Debt continued increasing |
Turnbull | Coalition | Scott Morrison | Debt moved beyond $500b |
Morrison | Coalition | Josh Frydenberg | Largest acceleration, particularly COVID |
Albanese | Labor | Jim Chalmers | Approx. $895b → $982b by 2025–26 estimate |
This is more informative than simply blaming whichever government happens to be in office when the debt clock passes a psychologically significant number.
What about the trillion-dollar debt forecast?
The 2026–27 Budget forecasts Commonwealth gross debt at:
2025–26 — $982 billion
2026–27 — $1.051 trillion
2027–28 — $1.120 trillion
2028–29 — $1.193 trillion
2029–30 — $1.249 trillion
So unless those forecasts change substantially, Australia will formally move beyond $1 trillion of Commonwealth gross debt during the Albanese Labor Government.
That will undoubtedly produce political claims that Labor “created a trillion dollars of debt”.
Mathematically, however, that would be nonsense.
Labor did not inherit zero debt in 2022.
It inherited approximately:
$895 billion
The trillion-dollar threshold is therefore being crossed after most of the underlying debt was already accumulated.
The relevant question is not who happens to be sitting in the Treasurer's chair when the number rolls from $999 billion to $1 trillion.
It is:
Who accumulated the debt that got us there?
On the historical numbers, the answer is that governments of both major political parties contributed, but the largest nominal increase occurred under the Coalition between 2013 and 2022.
What did COVID contribute?
This also deserves to be isolated.
The Parliamentary Library puts gross debt at:
March 2019: $534.4 billion
April 2022: $885.5 billion
Increase:
$351.1 billion
That is a:
65.7% increase
during the period encompassing the pandemic.
This means COVID-era borrowing alone accounts for approximately:
55% of the total $638 billion increase
that occurred across the broader Coalition period from approximately 2013 to 2022.
The remaining increase was largely accumulated before COVID.
That distinction is significant.
Was the Morrison Government wrong to borrow during COVID?
That is a different question.
It is very easy with hindsight to point to the increase in debt.
But consider the circumstances.
Governments closed borders.
Governments imposed lockdowns.
Governments restricted businesses from operating.
Millions of Australians faced disrupted employment.
Businesses faced catastrophic revenue losses.
If government orders people not to work and businesses not to trade, government cannot reasonably then deny responsibility for mitigating the economic consequences of those orders.
Some very substantial borrowing was therefore unavoidable.
The legitimate accountability questions concern:
whether JobKeeper was appropriately targeted;
whether profitable companies should have retained JobKeeper payments;
whether stimulus expenditure was efficient;
whether programs were sufficiently monitored;
whether expenditure continued for too long;
and whether taxpayers received reasonable value.
Those questions should be examined.
But they should not be confused with the proposition that all COVID borrowing was inherently irresponsible.
How does Australia compare internationally?
There is another reason not to treat the trillion-dollar headline in isolation.
International comparisons generally use general-government gross debt as a percentage of GDP, rather than simply comparing nominal dollars.
On that measure Australia remains considerably less indebted than many comparable advanced economies.
Australia's broader government debt sits at around half of GDP, while the advanced-economy average is around or above 100% of GDP.
Countries including Japan, Italy, France, Canada and the United Kingdom carry substantially higher government debt relative to the size of their economies.
So two statements can simultaneously be true:
Australia has accumulated an extraordinary amount of additional Commonwealth debt since 2007.
and:
Australia remains comparatively less indebted than many major developed economies.
There is no contradiction between those propositions.
What concerns me more than the trillion-dollar number
The number itself matters.
But what concerns me more is the increasing cost of carrying it.
Debt attracts interest.
The greater the debt and the higher prevailing interest rates, the greater the amount of Commonwealth revenue diverted into debt servicing.
That is money that cannot simultaneously fund:
hospitals;
Medicare;
disability services;
housing;
defence;
education;
infrastructure;
Indigenous programs;
income support;
tax reductions;
or other government priorities.
The Parliamentary Library has specifically identified both the size of the debt and the increasing cost of servicing it as issues confronting Australian governments. (Australian Parliament House)
That is where the longer-term fiscal debate should be concentrated.
Who should carry responsibility?
The evidence does not support a simplistic partisan answer.
The Howard Coalition Government
Left office with exceptionally low Commonwealth gross debt of approximately $53.6 billion.
Rudd–Gillard–Rudd Labor Governments
Increased gross debt substantially, principally during and following the Global Financial Crisis.
Approximately:
+$203 billion
Abbott–Turnbull–Morrison Coalition Governments
Recorded the largest nominal debt increase.
Approximately:
+$638 billion
That period included approximately $351 billion of pandemic-era debt expansion.
Albanese Labor Government
Inherited a debt stock approaching $900 billion and is currently estimated to take gross debt to approximately $982 billion in 2025–26.
The current Budget forecasts the nominal stock continuing beyond $1 trillion, while Treasury forecasts the debt-to-GDP trajectory to be materially better than anticipated around the time Labor took office. (Treasury)
My view
Australians deserve something better than the usual political argument over debt.
When debt goes up under Labor, the Coalition calls Labor reckless.
When debt goes up under the Coalition, explanations are provided about economic circumstances.
Labor naturally does the reverse.
The historical record demonstrates why that game is intellectually dishonest.
Both major parties have governed during events requiring substantial fiscal responses.
Labor confronted the Global Financial Crisis.
The Coalition confronted COVID-19.
Both borrowed.
Both also accumulated debt outside those extraordinary emergency periods.
That deserves scrutiny as well.
The most accurate conclusion from the historical figures is therefore:
Labor recorded the largest percentage increase from the very low debt base it inherited in 2007.
But:
The Liberal–National Coalition recorded by far the largest increase in Commonwealth gross debt measured in actual dollars between 2013 and 2022.
And:
The single largest acceleration occurred during the Morrison Government with Josh Frydenberg as Treasurer, principally as Australia responded to COVID-19.
The current Albanese Government inherited almost $900 billion of Commonwealth gross debt.
It therefore did not “create” Australia's trillion-dollar debt.
But neither does inheriting that debt relieve the current Government of responsibility for what happens from here.
The Government of the day owns the decisions it makes.
That principle should apply equally whether the Treasurer is Peter Costello, Wayne Swan, Joe Hockey, Scott Morrison, Josh Frydenberg or Jim Chalmers.
The question Australians should ask
The debate should not end with:
Which political party borrowed the most?
That is useful historical information.
The more important questions are:
Why was the money borrowed?
Was the expenditure necessary?
Was it properly targeted?
What assets or benefits were created?
Was waste identified and eliminated?
What is the cost of servicing the debt?
Are today's operating expenses being shifted onto future taxpayers?
And perhaps most importantly:
What did Australia get for the money?
A trillion dollars is an extraordinary number.
Australians are entitled to demand an equally extraordinary level of accountability for how governments accumulated it — regardless of which political party was in power.
Key figures at a glance
Government era | Party | Principal Treasurer/s | Approx. debt increase |
Howard to Nov 2007 | Coalition | Peter Costello | Left ~$53.6b |
2007–2013 | Labor | Wayne Swan / Chris Bowen | +$203b |
2013–2022 | Coalition | Joe Hockey / Scott Morrison / Josh Frydenberg | +$638b |
COVID-era 2019–2022 | Coalition | Josh Frydenberg | +$351b |
2022–2025/26 | Labor | Jim Chalmers | +$87b estimated |
Bottom line
Largest increase in dollars:
Coalition, 2013–2022 — approximately $638 billion
Largest percentage increase from the inherited starting position:
Labor, 2007–2013 — approximately 380%
Largest rapid increase associated with a single extraordinary event:
Morrison Coalition / Treasurer Josh Frydenberg during COVID — approximately $351 billion
Current Treasurer:
Jim Chalmers — Labor
2025–26 estimated gross debt:
$982 billion
2026–27 forecast:
$1.051 trillion
Sources
Australian Parliament, Parliamentary Library, Australian government debt in historical and international perspective. (Australian Parliament House)
Australian Parliament, Parliamentary Library, Australian Government Debt. The Parliamentary Library records Australian Government gross debt below $52 billion at the beginning of 2007, rising to $580 billion by March 2020. (Australian Parliament House)
Reserve Bank of Australia, Infrastructure Developments in the Market for Commonwealth Government Securities, September 2013. (Reserve Bank of Australia)
Australian Government Budget historical data, including annual face value of Australian Government Securities. (Budget Archive)
Australian Treasury/AOFM, October 2022 Budget debt data. (Treasury)
Australian Government, 2026–27 Budget Overview. (Budget Australia)
Australian Treasury, Address to the Australian Business Economists, 2026. (Treasury)
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