Australia's borrowing costs are expected to remain historically low, despite the federal government having to endure a few more years of budget deficits.

Governments around the world borrow money by issuing bonds and other securities to investors.

Demand for Australian Commonwealth Government Securities (CGS) remains strong, which reduces the cost of borrowing for the government.

In fact, the proportion of government bonds held by those living outside Australia are at record levels, after hitting 67.5 per cent at the end of 2013.

The attraction lies in their safety.

Thanks to its relatively low government debt, Australia is one of only 12 countries to have a triple A credit rating with a stable outlook from all three major credit ratings agencies, which makes its debt more attractive to investors.

The 2014/15 budget papers say CGS yields are expected stay at or very near historically low levels over the coming four financial years.

Interest payments on those securities are expected to be $13.5 billion in the coming financial year, which is 0.8 per cent of gross domestic product.

In the following three financial years, that is expected to rise to 0.9 per cent.

Total interest payments for the government are only slightly higher, at 0.9 per cent of GDP in the coming four financial years.

The Commonwealth had about a third of a trillion dollars, or $319.2 billion, worth of government securities on issue at May 8, 2014, according to budget papers.

The federal government's total net debt for 2014/15 is estimated to be a quarter of a trillion dollars or $226.4 billion, equal to 14 per cent of gross GDP.

Net debt is estimated to peak 14.6 per cent of GDP in 2016/17, still one of the lowest of the developed nations.