(Bloomberg) -- Australia’s mid-year budget update will reveal a lower-than-expected level of debt, Treasurer Jim Chalmers said.

Forecast gross debt in the year ending June 2024 will be close to A$900 billion ($592 billion) down from earlier projections of more than a trillion dollars, he told reporters Sunday in Sydney. The mid-year economic and fiscal update will be released on Wednesday, he said.

“One of the big developments, one of the big improvements that people will see in the mid-year budget update is that we’ve been able to get debt down even further and get the budget in much better nick,” he said. “Gross debt will now peak lower, much lower than what we saw at the election and lower still than what we saw in the May budget.”

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While Chalmers was able to deliver Australia’s first budget surplus in 15 years in 2022-23, the Treasury has projected a deficit of A$13.9 billion in the year through June 2024 as rising costs hit government agencies and high interest rates drive up debt servicing.

“We still have pressures on the budget including higher interest rates which are making it more expensive for us to service our debt,” Chalmers said. “But by getting the debt down from what we inherited, we will save the Australian people tens of billions of dollars in interest costs to service that debt. That means we can have a much stronger bottom line.”

Chalmers said increases to fees paid by foreigners to buy houses announced earlier Sunday will raise about A$500 million, without providing details on the timing of that revenue flow.

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