Australian interest rates Australian Politics

Nobody is buying Jim Chalmers’ inflation spin

Thursday 8 October 2026

I explained on Monday why Australia’s inflation problem is primarily domestically driven, in response to Treasurer Jim Chalmers’ claim that the war in the Middle East, not excessive government spending, was driving inflation.

Government spending is tracking at record pandemic levels (28% of GDP), even though the pandemic ended five years ago.

Source: Shane Oliver (AMP)

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.