Australia’s public spending adds to inflation and rising mortgage costs
Australia's Reserve Bank is expected to raise interest rates again, with the Labor government attributing economic pressures to international factors including the Iran conflict and rising fuel prices. However, the article argues that the government's own spending decisions are a significant contributor to inflation and rising mortgage costs for Australian households.
Federal government spending has increased substantially, reaching a forecast 26.8 per cent of GDP this financial year (approximately £830 billion), compared to 24.5 per cent in 2018-19 before the pandemic. The RBA governor stated that inflation was already rising above target before recent oil price increases, and economists contend that elevated public spending consumes spare economic capacity, contributing to inflationary pressures and forcing the central bank to raise interest rates further.
- RBA preparing to raise rates whilst government blames international factors for inflation
- Federal spending at 26.8% of GDP, significantly above pre-pandemic levels
- Economists argue excessive public spending is fuelling domestic inflation pressures
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Originally published by Daily Mail as “Labor’s spending addiction is hurting Australians. Now your mortgage is rising again as politicians gaslight you about who’s really to blame: Peter Van Onselen”.