Wednesday 4 November 2026

Federal Member for Mallee, Dr Anne Webster MP, says families, older people and small businesses alike are paying the price for an economy in which government spending is competing for scarce workers, materials and capital.

The Reserve Bank of Australia (RBA) on Tuesday increased the cash rate by 25 basis points to 4.85 per cent, its fifth increase this year, the highest cash rate since 2008 and the 17th rise under the Albanese Labor Government.

Dr Webster said Treasurer Chalmers cannot use overseas events to pretend government spending has no consequences here at home.

“The RBA says Australia has a growing number of supply shortages. The RBA Governor previously made clear that aggregate demand includes both public (ie government) and private demand and that both add to demand in the economy.

“RBA Assistant Governor and Chief Economist Sarah Hunter has been equally clear that government spending is ‘definitely part of the picture’.

“Families are suffering. As I said in Parliament last Thursday, Australians are struggling to put food on the table.  Nearly 7 in 10 households experienced food insecurity for the first time this past year, according to Foodbank.  The Albanese Labor Government cannot keep expecting families to suffer while it refuses to properly restrain its own spending.”

Westpac senior economist Pat Bustamante found government spending now generates a record 35 per cent of economic activity in Australia and is linked to nearly 40 per cent of employment. He concludes that rising government demand for goods, services, labour, machinery etc has tightened supplies for private industry and, at times, produced capacity pressure and higher inflation.

AMP Chief Economist Shane Oliver said reducing near-term government spending would help lower inflation, alongside longer-term measures to expand Australia’s productive capacity.

Leading economist Warren Hogan warned just before Tuesday's RBA rate decision that even higher interest rates could be required to defeat inflation, also warning that continued growth in government spending could force the Reserve Bank to tighten monetary policy more aggressively.

Dr Webster warned that the primary tool the RBA possesses to ‘tighten monetary policy’ is to raise rates again.  She highlighted that The Nationals have put forward a clear alternative through Our Plan to Fix the Economy and Protect Our Way of Life.

“The Coalition has already identified $31 billion in responsible savings by cutting Labor’s waste, corporate welfare and bureaucracy,” Dr Webster said.

“We will deliver lower taxes on incomes thanks to our Tax Back Guarantee.

“We will deliver cheaper and more reliable energy, migration settings that allow housing and infrastructure to catch up, and disciplined spending that takes pressure off inflation rather than adding to it.

“Our savings will more than fund the Tax Back Guarantee and leave the Budget $22 billion better off over four years.

“We will impose a speed limit on spending so government expenditure should not grow faster than the economy.

“We will establish a Future Generations Fund to use Budget windfalls to pay down Labor’s debt and invest in lasting infrastructure, rather than allowing every revenue upgrade to disappear into new spending.

“The contrast is clear. The Albanese Labor Government keeps asking the economy to wear more inflation, for workers’ wages to not go far enough to meet rising costs, and for mortgage holders to absorb higher rates. All while Labor refuses to accept responsibility for the impact of government spending on inflation.

“The more Labor spends, the more Australians pay.”