Australian governments are spending at an unsustainable pace, with public debt set to rise further, according to a report by the e61 Institute and McKinnon. The analysis warns that current fiscal policies are leaving the economy increasingly vulnerable to future economic shocks.

The report highlights that government spending has accelerated beyond sustainable levels, creating mounting pressure on Australia's fiscal position. Rising public debt levels could constrain future government flexibility in responding to economic downturns or emergencies. This spending trajectory comes despite Australia's relatively strong economic performance compared to other developed nations.

Economists warn that without significant policy adjustments, Australia faces growing financial risks that could undermine long-term economic stability. The findings suggest that fiscal restraint measures may be necessary to prevent debt levels from becoming a drag on future growth and to maintain Australia's economic resilience.