Govt debt tops $250 bln for first time

28 Sep 2012, 5:38 pm   -   Source: AAP

The federal government's debt securities has topped $250 billion for the first time following the latest bond auction.

The federal opposition warns the Labor government has made the economy vulnerable after the amount of commonwealth debt on issue topped $250 billion for the first time in the nation's history.

The latest $500 million bond sale on Friday by the government's debt manager, the Australian Office of Financial Management, lifted total securities on issue to $250.1 billion.

In the May budget, Treasury forecast gross debt to be below $250 billion at the end of each of the next few financial years.

But in order to manage the "within year" financial task, the government legislated to allow the country's debt ceiling to be raised from $250 billion to $300 billion.

"Labor's growth in debt is extraordinary given that we have been blessed with a mining boom which has delivered the best terms of trade in more than 150 years," shadow finance minister Andrew Robb said in a statement.

"This government has wasted the mining boom."

He said annual interest payments alone on borrowings are a staggering $12 billion.

"Labor's debt and continued reckless spending leaves our economy extremely vulnerable to the storm clouds which are gathering over commodity prices."

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