There is no reason for people to be concerned about high levels of national and state debt, says an independent economist.
On Thursday, Treasurer Josh Frydenberg announced Australia was facing a $184.5 billion budget deficit this year.
National debt has also risen to $677.1 billion.
But independent economist Saul Eslake said there was no need to worry.
"Although gross debt is projected to rise to $852 billion by June next year, which represents 45 per cent of our national income or GDP, we've had much higher levels of debt relative to GDP in the past," he said.
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He said Australia's debt was still markedly lower as a percentage of GDP compared to other western countries.
National budgets don't operate in the same way as household budgets. While a household borrows against the value of their assets countries borrow against the potential productivity of the economy.
Mr Eslake said due to record low interest rates Australia would be paying less as a percentage of GDP than between 2013 and 2019.
Tasmania has also incurred debt through spending on stimulus measures.
But, Mr Eslake said due to the low interest rates they would be paying less on repayments than was expected in last year's state budget.
The economic down turn will still have a significant impact on Tasmania.
Australia's jobless rate is expected to rise to about 10 per cent by December and GST revenue will be significantly lower than usual.
Mr Eslake said based on Thursday's estimates Tasmania's share would likely be higher than what was predicted by the state treasury in May.
"Tasmania will get $2.2 billion from the GST in 2019-20, and $2.4 billion in 2020-21," he said. "That's $66 million more than had been forecast in May for 2019-20, and $186 million more than forecast for 2020-21."
Although the estimates are an improvement from the May forecast they are a significant decrease compared to pre-COVID estimates.
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