There's a paradox when it comes to debt in Australia. We have endless debate about the magnitude of the government's borrowings, even though they are comparatively low by global standards. Meanwhile, the level of household debt gets relatively little attention even though it's among the highest in the world. In the past two decades the debt owed by households has risen from about 80 per cent of combined income to more than 180 per cent. A fresh surge in borrowing driven by the recent boom in house prices, coupled with slow wage growth, has pushed the debt-to-income ratio to new heights.

When economist Kieran Davies last year compared countries using another measure – the ratio of household debt to gross domestic product – he found Australia's to be the world's highest, just above Denmark, Switzerland and the Netherlands.

One reason household debt doesn't attract more headlines is that households have, overall, coped well with our run-up in borrowings. The Reserve Bank's most recent review of financial stability said "household financial stress remains fairly benign".

Even so, I think Australia's household debt story gets less scrutiny than it deserves, considering the risks.