Net debt and net worth

In 2004-05, the level of Australian Government net debt continued to fall from a peak of 19.1 per cent of GDP in 1995-96 to 1.3 per cent of GDP in 2004-05. Since 1996-97, net debt has fallen by $84.7 billion. The fall in net debt was $4.8 billion greater than estimated at the 2005-06 Budget, largely reflecting the higher than expected underlying cash surplus outcome.

Net interest payments in 2004-05 were around similar levels anticipated at the 2005-06 Budget. Having peaked at $8.4 billion in 1996-97, net interest payments have declined to $2.5 billion in 2004-05, representing annual savings in interest payments of $6.0 billion.

Australian Government general government sector net worth increased from -$39.6 billion in 2003-04 to -$32.0 billion at the end of 2004-05. The $7.6 billion improvement largely reflects a strong net operating surplus of $10.9 billion and a $3.4 billion revaluation of assets, including a $1.2 billion revaluation of land by the Department of Defence. These improvements are partially offset by:

a net writedown of assets of $5.2 billion, largely due to provisioning for bad and doubtful debts by the Australian Taxation Office; and
actuarial revaluations of $1.1 billion relating mainly to the unfunded superannuation liability.

Table 6: Australian Government general government sector net worth, net debt and net interest payments

Net debt equals the sum of deposits held, advances received, government securities, loans and other borrowing, minus the sum of cash and deposits, advances paid and investments, loans and placements.
Australian Government cash interest payments less cash interest receipts.