Budget spending cuts must ‘take heat off’ interest rates

Tens of billions of dollars of extra federal and state government spending have added to inflation pressures and must be cut to limit the Reserve Bank of Australia’s interest rate increases, economists say.

An analysis shows that spending in the first two budgets under Labor Prime Minister Anthony Albanese and Treasurer Jim Chalmers has been mildly stimulatory compared with the contractionary early budgets of the Coalition government under Tony Abbott and Joe Hockey.