OECD Warns on Government Debt as Australia Faces Higher Borrowing Costs from Rising Bond Yields

The OECD has urged governments to reduce spending and debt as global bond yields reach 15-year highs, with Australia's Treasurer Jim Chalmers warning of billions in additional borrowing costs. Australian Commonwealth debt has surpassed $1 trillion, with interest payments forecast to exceed $42 billion annually by 2029/30. The OECD downgraded Australia's growth forecast to 1.7 per cent for 2027 and revised inflation projections upward, citing Middle East conflict impacts on energy prices, AI investment activity, and the risk of a strong El Niño affecting food production.