Lower interest rates have given households more scope to make payments on  2  For further detail on the adjustment to a higher level of household indebtedness, see Bloxham P, C Kent and M Robson (2010), “Asset Prices, Credit Growth, Monetary and Other Policies: An Australian Case Study”, RBA Research Discussion Paper 2010–06.
There will also have to be adequate surpluses net of interest expense, in part to take account of the expected increase in the expenses connected with the ageing of the population. Against this backdrop, the use of debt to fund new public programmes – apart from what is necessary to address true emergency situations – must be avoided.