This report combines Commonwealth, state and territory budget data to examine the fiscal outlook across all levels of Australian government. Compared to the 2024-25 national fiscal outlook, all the main budget aggregates have worsened as a share of gross domestic product (GDP) at the national level. This reflects a deterioration in these aggregates across most jurisdictions, driven primarily by the Commonwealth and Queensland. 

Key findings

• The combined 2025‑26 budgets show that the national fiscal outlook has worsened since the last edition in October 2024.
• The timeline for achieving a national net operating surplus is no longer in the forward estimates.
• The total state net operating balance is forecast to return to surplus in 2027‑28, 2 years later than forecast in the combined 2024‑25 budgets.
• National net debt is forecast to steadily increase over the forward estimates from 35% of GDP in 2025‑26 to 38% of GDP in 2028‑29.
• Public debt interest payments are forecast to increase, reflecting higher debt levels, tight monetary policy settings and global market conditions.

The report is accompanied by a data pack.