States and territories' contribution to supporting the economy during the COVID-19 pandemic may be well short of what the Morrison government has stumped up, but they look set to take on a greater share of national debt.
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An analysis by the independent Parliamentary Budget Office found that all up, governments across Australia have provided economic and health support packages worth an unprecedented $327 billion.
The Commonwealth government is the major contributor to total spending with $267 billion between 2019/20 to 2023/24, the PBO says in its 2020/21 national fiscal outlook released on Thursday.
"By comparison, the Commonwealth's response to the Global Financial Crisis was around $90 billion," it says.
But it says the Commonwealth's share of spending is unsurprising.
"The Commonwealth has a larger revenue base, and therefore has greater borrowing power so is in a stronger position to contribute to the stimulus," the PBO says.
The cumulative deficits across the Commonwealth and state governments will see national net debt rise from $393 billion in 2018/19 to $1.3 trillion in 2023/24.
But the PBO says the composition of national net debt is expected to change over the next few years.
"The state share of national net debt is forecast to increase from its average of 13 per cent since the Global Financial Crisis (2009/10 to 2018/19) to around 29 per cent in 2023/24," it says.
Australian Associated Press
