Sir Niall Ferguson’s “Ferguson limit” is the point at which a nation spends more on debt interest than on defence. Cross it and the fiscal arithmetic begins to erode the ability to project power or even maintain basic sovereignty. The United States crossed it for the first time in nearly a century in 2024. New Zealand beat them to it.
Our latest numbers are damning. Core Crown interest payments are running at around $8.9 billion a year. Defence spending sits at roughly $3.3 billion. We are not close. We are already deep into Ferguson territory. Interest alone now dwarfs law and order spending as well. The debt service bill is larger than entire departments.
