Finance Minister Katy Gallagher says the federal government can’t promise its December mid-year budget update will deliver overall savings, with pressures on the budget still growing.
Speaking on ABC Insiders, she said decisions were still to be made through the Expenditure Review Committee and she didn’t want to get ahead of them. Treasurer Jim Chalmers had earlier declined to commit to net savings after annual inflation hit 4.3 per cent to September, a worse-than-expected result.
That figure has lifted expectations the Reserve Bank will raise rates again when it meets on Tuesday. The RBA’s chief economist said last week that government spending is adding to demand pressure, though she noted it isn’t the RBA’s role to advise on spending.
Gallagher pointed to health, aged care, AUKUS and veterans’ backlogs as areas driving costs. Opposition Leader Angus Taylor argued the government could ease pressure on rates by committing to restraint, while minister Murray Watt said most spending growth is coming from the private sector.
What it means for your money
If you have a variable-rate mortgage, it’s worth checking now what another rate rise would do to your repayments and whether you have a buffer. Budget restraint is unlikely to be settled before the RBA meets, so plan for the higher-rate scenario.
Source: ABC Business