Australian Economy Australian interest rates

Why Australia’s inflation is domestically driven

Sunday 4 October 2026

Treasurer “Spin” Jim Chalmers defended the federal government’s inflation record ahead of Tuesday’s 0.25% rate hike from the Reserve Bank of Australia (RBA).

Chalmers insisted at a press conference with Finance Minister Katy Gallagher on Monday that the war in the Middle East, not government spending, was driving inflation.

Spin Jim also insisted that other countries were in a “far worse position” than Australia.

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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.