The Albanese government needs to work with the RBA, not against it

Australia’s governments—both federal and state—continue to spend at emergency pandemic levels, even though the pandemic ended five years ago. And this excessive government spending is adding to aggregate demand and helping to drive inflation.

Analysis by the Coalition shows that the federal budget bottom line over the medium term is far worse off than it would be if Labor had banked all of the new savings and extra revenue that it has announced since the 2025 mid-year budget update.

A total of $350 billion in medium-term savings was identified between the budget update last December and this year’s budget in May. However, the improvement in the medium-term budget bottom line is expected to be only $180 billion.