Macroeconomics Advisory 2022-23 Commonwealth Budget Preview: is big debt good for Goldilocks or a Roach Motel?

In this Budget 2022 Preview note we find that the key to assessing the long-term sustainability of the Federal Budget is to compare the projected path of interest rates and gross domestic product. When we do we find a Federal structural budget deficit averaging over 3 per cent of GDP over the next decade, indicative of an imbalance between receipts and payments, pointing to a build up in debt over the medium term.