Today, it’s all about the trillion-dollar mark, and data centres.

Now, a standard data centre costs about $700m to build. With $1 trillion, you could build about 1,429 data centres.

A data centre is about 9,200 square metres. So $1 trillion gets you 13,146,800 square metres of data centre space.

Which is interesting. Because if you have one trillion $1 coins, you’d actually need 625 million square metres (67,934 data centres) if you laid them all flat next to each other. So I guess we’re lucky that we have $1 trillion in national debt, rather than in coins that need to be laid flat in data centres.

And, at the standard reading speed of four words per second, it has taken you about 22 seconds to get to this stage, which is 22 seconds you kinda wish you had back. Enjoy today’s newsletter!

This week, Australia’s government debt passed $1 trillion for the first time. To put that number into context: it’s a thousand billion dollars. Or a million... million dollars.

It comes at the same time as U.S. Government debt surpasses $40 trillion ($AU56 trillion) for the first time.

Let’s unpack why that happens, and what the number actually means.

Debt is simply what the Government currently owes to lenders. Everyday Australians, local and international investment funds and major banks lend the Australian Government money because they trust it will pay them back in the future, with interest.

The Government uses that money to fund current commitments it can‘t otherwise cover with tax revenue, which could include hospitals, roads, disaster relief, or income support.

Taking on debt is a normal tool all governments use to keep the economy running, and not, on its own, a sign something has gone wrong.

Say the Government wants to fund the NDIS, build new hospitals, and respond to a natural disaster, all in the same year.

If the costs of these programs exceed how much the Government collects in taxes, the Government needs to borrow to cover the difference.

Borrow too much, though, and the interest bill itself can become a growing cost.

The Government only starts properly paying down debt once it’s in surplus. A surplus means it collects more (usually in taxes) than it spends in a year, rather than the other way around (a deficit). 

Australia last had surpluses in 2023 and 2024 but has been in deficit since 2025, which means debt has been growing again rather than shrinking.

The Parliamentary Budget Office, an independent government department, forecasts a return to surplus by 2034-35. 

Two things are driving that. First, rising wages push more people into higher tax brackets automatically, without the Government raising rates, meaning more tax is collected each year. This is called bracket creep.

Second, recent changes to who qualifies for the National Disability Insurance Scheme are forecast to slow how fast spending on the program grows.

The dollar figure itself keeps climbing for now, though, and is expected to hit $1.1 trillion within two years.

A common method economists use to measure a country’s ability to repay its debt is to divide the debt by its gross domestic product, known as the debt-to-GDP ratio.

Australia’s debt-to-GDP ratio sits at roughly a half, which is small by international standards. This means, compared to other countries, the Australian Government is at a lower risk of defaulting.

The same week Australia’s debt hit $1 trillion, the U.S. hit a milestone of its own: total government debt passing $US40 trillion ($AU56 trillion).

The yearly interest on the U.S’ borrowing now tops $1 trillion.

Both major parties agree that debt matters. They disagree on what to do about it.

The Government points to Australia’s low debt relative to other countries, and to its record of running smaller deficits than forecast.

The Opposition argues the dollar figure itself is the problem, with Shadow Treasurer Tim Wilson saying: “Today’s debt is tomorrow’s taxes”.

Debt dipped back below $1 trillion on Friday but new borrowing is expected to push this straight back over again in the coming weeks.

Prime Minister Anthony Albanese is preparing for a showdown with Queensland and the Northern Territory over the future of AI data centres at a National Cabinet meeting today.

It comes weeks after Qld and the NT disagreed with other states and territories on a plan to require data centres to pay for new renewable energy infrastructure.

At a press conference on Sunday, Energy Minister Chris Bowen said the Government has “constitutional powers which we intend to exercise to ensure Australians are not disadvantaged by data centres being opened.”

Here’s what to know.

Data centres are huge buildings that underpin much of what we do on the internet, such as hosting servers, cloud storage, and data processing.

In recent years, there has been a boom in building data centres to keep pace with the need for computational power for AI systems.

Data centres require a lot of energy to run and can also use a lot of water in their cooling systems (to stop computers from overheating). One team of U.S. scientists has estimated the country’s data centres could account for up to 15% of national energy use by 2030, while another team estimates that, globally, up to 6.6 billion cubic metres of water could be diverted.

Australia’s Climate Council says energy requirements for data centres are expected to triple by 2030.

At the local level, data centres have been known to emit noises, bad smells and possibly toxic gases, such as one of SpaceXAI’s centres near Memphis, now the subject of a lawsuit.

There are more than 160 data centres across Australia - many in NSW - with an additional 90 in the pipeline.

Commonwealth Bank economists expect total investment in data centres to top $150 billion by 2030.

Australia has emerged as second in the world behind the U.S. for data centre investment.

Heads of various AI companies have courted the Australian Government in recent months to encourage the local industry and spur on data centre roll-out.

Meanwhile, the South Australian Government also announced a Royal Commission into the effects of AI on the community two weeks ago.

In July, PM Albanese announced the Government’s proposed “world-leading” national AI standards.

If they pass Parliament, the standards would require AI data centres to generate as much power as they use, and minimise water usage.

They’ll also have to minimise their water use, pay for any extra water infrastructure needed, and pay to connect to the grid.

Later that month, Energy Ministers from governments around the country (except Qld and the NT) agreed “to mandate that data centres offset their electricity demand by investing in additional renewable generation”.

The Queensland Government says new data centres shouldn’t be tied to renewable energy.

Instead, according to The Australian, Queensland Premier David Crisafulli says his Government wants to take full control of data centre approval (removing it from local councils), allowing developers to choose a “market-driven energy mix” to power them.

Under his plan, the Government would need to agree that the centre wouldn’t affect water supply, and the developer would still need to consult with the community.

Queensland’s proposal would also require data centres to work more closely with communities and councils before lodging development applications.

“This is about data sovereignty for our country, it’s about respecting communities’ wishes and resources, and it’s about creating the jobs of tomorrow while protecting the Queensland of today,” Crisafulli told The Australian.

Energy Minister Chris Bowen said on Sunday the Government may consider using constitutional powers to force Queensland and the Northern Territory to adopt the national framework.

“We’re not going to let Queensland run a race to the bottom, which would see energy bills go up, reliability go down, because they want data centres at any cost,” Bowen said.

For more on this topic, listen to this morning’s podcast on Apple here and Spotify here.

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Wait, is it the Sydney Marathon or the Munich Marathon this weekend?

In case you missed it, the Sydney Marathon just made 40,000 medals for next week’s race but… with the wrong landmark.

You see, the medal features different landmarks that runners will pass through, including Allianz Stadium – except the medal features Munich’s Allianz Arena instead of Sydney’s Allianz Stadium.

“With the event a week away, this is the medal our finishers will receive. It’s a beautiful medal, and now a little more unique,” race organisers said.