Jul 20, 2026 – 11.59amThe Victorian government is on track to spend one in every 10 dollars of revenue on debt interest, according to new analysis from credit ratings agency Moody’s, which warns the Middle East conflict could exacerbate cost blowouts on state government infrastructure projects across the country.State and territory debt has ballooned since the pandemic as premiers ramped up infrastructure spending, expanded the public sector and rolled out cost-of-living handouts. The Parliamentary Budget Office projects gross state debt to climb to $650 billion in 2026-27, up from $266 billion in 2018-19.Subscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles