$60m a day: soaring interest bill on Australia’s debt eclipses cost of childcare or infrastructure

Interest payments on commonwealth government debt will cost the federal budget $112bn over five years, or $60m a day.

The treasurer, Jim Chalmers, revealed the soaring cost of debt in the lead-up to Tuesday's budget, which will show interest now costs more than the family tax benefit, childcare or infrastructure.

The Albanese government blames the Coalition, which left gross debt of $888bn, or net debt of $517bn, when it lost office in May 2022.

The annual cost of debt will rise from $17.7bn in 2022-23 to a peak of $27.1bn in 2025-26, before reducing back down to $26bn in 2026-27, according to new estimates in the budget.

In April the Grattan Institute noted that interest costs are "one of the fastest-growing categories of expenditure" due to "the build-up of debt over the past decade and a half - supercharged by Covid - and growing borrowing costs".

"The federal government's interest payments are expected to grow from 0.9% of GDP to 1.7% over the next 10 years," it said.

According to the institute, keeping debt stable would save taxpayers about $10bn a year in interest payments alone by 2033 - almost the entire higher education budget.