Friendly fire erupts as Chris Minns takes veiled swipe at Anthony Albanese over spending as interest rates and inflation surge
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NSW Premier Chris Minns has made thinly veiled criticism of federal Labor's spending approach, arguing all government levels must help combat inflation as the Reserve Bank raised interest rates and consumer prices accelerated. The criticism highlights growing tensions within the Labor Party ahead of NSW's 2027 state election, with some state MPs reportedly wanting Minns to distance himself from Prime Minister Albanese to avoid electoral damage from cost-of-living pressures.
The RBA raised the cash rate by 25 basis points to 4.6 per cent on Tuesday—its highest level since 2011—whilst inflation rose to 4 per cent in the year to August 2026, up from 3.5 per cent in July. Minns contrasted his government's record, claiming NSW has had the lowest spending growth increase of any Australian jurisdiction over four years, and highlighted the state's reaffirmed credit rating with recent upgrades. The Premier stopped short of directly attacking the federal government but made clear his belief in fiscal discipline, whilst RBA Governor Michelle Bullock pointed to weak productivity as a key economic concern rather than directly blaming government spending.
- NSW Premier criticises federal Labor over spending whilst emphasising his own fiscal discipline record
- Reserve Bank raises rates to 4.6 per cent; inflation accelerates to 4 per cent
- State Labor MPs want Minns to distance himself from Albanese before 2027 election
Full account
A rise in Australian inflation and another increase in interest rates have sharpened debate over whether government spending is making the Reserve Bank’s task harder. The bank’s board voted unanimously on Tuesday to raise the cash rate by 0.25 percentage points to 4.6 per cent, its highest level since 2011. Figures released the following day showed consumer prices had risen 4 per cent in the year to August 2026, compared with 3.5 per cent in the year to July. Inflation therefore remained above the bank’s 2 to 3 per cent target range.
New South Wales Premier Chris Minns responded by stressing that every level of government had a part to play in reducing demand. He said his Labor government had heeded Reserve Bank advice to take care with public money and had kept spending growth lower than any other Australian jurisdiction over the preceding four years. Minns attributed that record to difficult budget decisions and pointed to a recent improvement in the state’s credit rating. He declined to assess the federal government’s choices directly, but his emphasis on restraint was widely read as a veiled challenge to Prime Minister Anthony Albanese and Treasurer Jim Chalmers.
The comments also carried a political dimension as Minns prepares for the March 2027 NSW election. The first report describes a growing distance between state and federal Labor, citing other issues on which the premier has taken a different position. Reserve Bank governor Michelle Bullock, meanwhile, did not directly blame government spending for the rate rise. She drew attention instead to weak productivity, saying it limited the economy’s capacity to grow and create jobs.
In a separate response to the inflation figures, entrepreneur Mark Bouris criticised federal borrowing. He argued that spending in excess of tax receipts added to demand while higher interest rates were intended to curb it, and warned that future generations would bear the debt. The second report says the Albanese government regards some of its spending as cost-of-living support and faces growing commitments in health, aged care, defence and the National Disability Insurance Scheme. Bouris raised the possibility that a recession might ultimately be needed to bring inflation under control, although neither the figures nor the Reserve Bank’s decision establish that outcome.
Where outlets differ
Source 1 centres on Minns’s comments and tensions within Labor, while Source 2 centres on Bouris’s criticism of federal deficits and debt. Source 1 highlights Bullock’s concern about productivity; Source 2 places greater emphasis on borrowing, future taxpayers and the risk of recession. Neither report establishes that federal spending alone caused the latest rise in inflation.
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