Net debt will be equal to 19.5 per cent of the country's gross domestic product in 2018/19, according to the federal budget handed down by Treasurer Scott Morrison on Tuesday.
Net debt is forecast to reach $325 billion in the current financial year, before rising to $355 billion in 2017/18 and reaching critical mass the following year.
However, Treasury forecasts say there will then be a turnaround, with debt falling to $374.7 billion in 2019/20 and dropping down to $366.2 billion in 2020/21.
Notably, the government is also forecasting a big turnaround in the budget deficit along the exact same timeline.
Budget papers indicate the deficit, which is $37.6 billion for 2016/17, will dramatically fall from $21.4 billion in 2018/19 to just $2.5 billion in the following year.
The federal government then hopes to deliver a surplus of $7.4 billion in 2020/21.
The net interest bill on the debt will rise from $13.3 billion in the current financial year to $15.5 billion in just over four years time.
Net debt deducts federal financial assets such as bank deposits and cash from government liabilities.
Gross debt - which is the total value of government bonds on issue before considering assets - will hit $501 billion in 2016/17, before rising to $540 billion in 2017/18 and $582 billion the following financial year when it will peak at 30.7 per cent of GDP.
Gross debt is projected to balloon out to $606 billion in 2019/20, a level the government optimistically forecasts it to stay at in 2020/21, albeit at 30.6 per cent of GDP.
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