Mike's Minute: The interest on our national debt will hit $11B

June 2026 is not far off. 

In fact, it's next year and next year is election year. 

By that time, it is being reported, the interest on our national debt will be $11b. 

Do you see how this works? 

Not long ago the warnings were issued that it might reach $10b and at the time, it was pointed out that that is multiple times more than the Police budget. 

That's just in interest. Once we pay the $10b our debt doesn’t diminish. It's exactly the same. We have gone nowhere. We've just kept the wolf from the debt door for another 12 months. 

Well, the $10b has gone and we are now heading for $11b. 

Why? 

Because as the Finance Minister keeps warning, and she is doing this because the budget is close, the cost of borrowing is going up. 

Why? 

Because we are a greater risk. Risky people who want money have to pay a higher price. It's why credit card debt is more expensive than mortgage debt. 

The Government sells bonds, they ask for money and in return they will give you interest. For you to give them that money you want a decent return. 

The last time they put some 10 year bonds out they were paying 4.62%. That’s a big interest bill on billions of dollars. 

Remember also that they are adding to that debt pile each and every year until they reach an annual surplus. Even if they reach an annual surplus, which they aren't going to now for years, all you have achieved is not adding to the pile of debt. 

Even if you add not one more dollar to the debt, the debt doesn’t shrink. It demands another $11b from you to pay the interest bill. 

The mistake that is often made is we look to other countries and go "look, their debt is more than ours", either in dollar terms or as a % of GDP. What isn't pointed out is how small and vulnerable and unable we are to grow our way out of that. 

We owe a lot and ratings agencies, although not alarmed, are alert. 

This Government were left with a shed load of debt from an economically criminal previous Government. 

And that bill is about to hit $11b a year, or over $30m a day. 

Every day, forever. 

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