Shadow Treasurer Tim Wilson has warned the federal government’s spending is worsening inflation and increasing the risk of an economic downturn.
His comments come as concerns grow about the economy’s direction, with rising fuel costs stemming from the crisis in the Middle East and weak private sector confidence weighing on growth.
Mr Wilson said the government was relying on public spending to support headline figures while underlying conditions deteriorate.
“The problem we’ve got is there’s been a complete collapse in private sector confidence in Australia,” he told Sky News host Steve Price on Monday evening.
“As a consequence, we are not seeing the investment for the future.”
He said Canberra’s approach was counterproductive, pushing up prices in an attempt to stabilise the economy.
“The government is trying to prop up the numbers through public spending,” he said.
“So, they’re causing the problem and then they’re inflating the economy in the hope that they can solve it.”
Mr Wilson pointed to warnings from business leaders, including Jayco founder Gerry Ryan, who said government spending was masking underlying weakness.
Mr Ryan has argued that without public expenditure, Australia would already be in recession.
Mr Liberal Party MP agreed with that assessment.
“The reality is Gerry Ryan is 100 per cent right,” he said.
He warned that continued spending without restraint would prolong inflation pressures and delay recovery.
“What they’re actually doing is increasing prices for Australians and then taxing the inflation,” he said.
The intervention comes as the government prepares for its next federal budget, with pressure mounting over cost-of-living concerns and economic management.
Mr Wilson also criticised the government’s response to the fuel crisis, including a $20 million advertising campaign encouraging Australians to reduce fuel use.
The “Every little bit helps” campaign began on Monday across television, digital and outdoor signage, such as billboards, to promote public transport and alternate transport to driving.
It comes just two weeks after national cabinet convened to endorse a four-stage National Fuel Security Plan.
Mr Wilson said the spending was misplaced at a time when households were already under pressure.
“Australians don’t like to be patronised… $20 million is basically equivalent to about another dollar you could have taken off everybody’s petrol bill, but instead it’s been spent on spin,” he said.
The campaign forms part of the government’s broader fuel security plan, which includes public messaging urging motorists to limit consumption.
Mr Wilson said Australians wanted practical action rather than messaging.
“They want prioritisation of their money to be spent on relieving pressure on households,” he said.
The warnings come amid fresh concerns that Australia could face a slowdown or recession, particularly as global pressures intensify.
Mr Wilson said the government had failed to build sufficient buffers during stronger economic periods, leaving limited capacity to respond.
“The challenge is this government, during the good times, has blown money and taken no steps of preparation,” he said.
“I think the impact of this is going to be significant and real if we manage to avoid a recession.”
Mr Wilson said that households, particularly younger Australians, would bear the brunt of any downturn.
“This is why we actually need an adult government taking prudent and responsible measures right now,” he said.
“If they don’t, they’ll leave Australia even more exposed, and particularly Australian households more exposed.”