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Methodology
Interest as % of State Revenue — Methodology and Sources
What this measures
General-government interest expense as a percent of total general-government revenue, for Victoria with NSW and QLD comparators. It answers: of every dollar the state collects, how much is consumed by servicing past borrowing? It is the standard fiscal-sustainability ratio that rating agencies track — and the mechanism by which debt becomes a recurring cost that crowds out services.
How values are derived
interest expense ÷ total GFS revenue × 100
For each state, both figures are taken from the same ABS 5512.0 Government Finance Statistics operating statement (Table 1), current prices, FY ending 30 June:
| State | ABS file |
|---|---|
| Victoria | 55120DO004 |
| NSW | 55120DO003 |
| QLD | 55120DO005 |
- Interest = "Interest on defined benefit superannuation" + "Interest expenses n.e.c." The borrowing-interest (n.e.c.) component dominates — e.g. Victoria 2024-25 is $6,463m n.e.c. + $783m super = $7,246m.
- Revenue = "Total GFS revenue".
| FY | Vic | NSW | QLD |
|---|---|---|---|
| 2015-16 | 5.6% | 3.0% | 4.6% |
| 2021-22 | 4.2% | 2.7% | 2.1% |
| 2024-25 | 7.8% | 5.4% | 2.9% |
How to read it honestly
- The series is U-shaped, not a smooth climb. Interest burdens fell across all states during the ultra-low-rate years — debt was growing, but rates were at historic lows — then spiked from 2021-22 as rates rose and accumulated debt compounded. The compelling, defensible movement is the recent near-doubling (Victoria 4.2% → 7.8% in three years), not a clean decade-long rise.
- Victoria is the highest of the three by 2024-25 and 2.6× Queensland's burden — the cross-state spread shows this is not simply "every state did this." Queensland's low debt keeps its interest burden low even after rate rises.
- This is forward-looking pain: interest is contracted and non-discretionary, and is set to keep rising as cheap fixed-rate debt rolls over to higher rates.
Caveats
- Interest includes a smaller defined-benefit superannuation interest component alongside borrowing interest (consistent with the Interest Expense metric).
- General-government sector only — excludes interest on public-corporation (e.g. water, transport authority) debt.
- Latest-year figures can be revised by the ABS in later GFS releases.
Sources
- ABS 5512.0 — Government Finance Statistics, Australia — State General Government Operating Statements, Table 1 (Vic DO004, NSW DO003, QLD DO005).