The Albanese government\u2019s spending is growing faster than the economy as a whole, prompting warnings that the Reserve Bank will raise interest rates.<\/p>\n
Join SkyNews.com.au to watch shadow treasurer Ted O’Brien’s full interview with Business Weekend from 11am AEDT.<\/a><\/p>\n Newly released data from the Australian Bureau of Statistics showed gross domestic product grew 0.4 per cent in the September quarter and 2.1 per cent across the preceding year.<\/p>\n But in its own budget in May, the Albanese government\u2019s spending outgrew this figure as Treasurer Jim Chalmers oversaw 2.6 per cent bump in government expenditure.<\/p>\n This has triggered warnings from shadow treasurer Ted O\u2019Brien and the Reserve Bank that Australians could be left to pay for it.<\/p>\n Mr O\u2019Brien told Sky News Business Weekend the latest figures were \u201cbad news\u201d for households.<\/p>\n \u201cWe really just see again that habit of the government of getting bigger becoming more and more prominent,\u201d Mr O\u2019Brien told Sky News Business Editor Ross Greenwood.<\/p>\n \u201cHere we have a government whose spending is growing faster than the economy itself.<\/p>\n \u201cAnd that’s bad news because it just means interest rates will be higher for longer. It means real incomes will be lower for longer. That’s the implication here.\u201d<\/p>\n Mr O\u2019Brien said the government needs to reel back public spending and allow the private sector to fuel the growth of the nation\u2019s economy.<\/p>\n \u201cThe last thing a government should be doing is pouring in more money and really representing almost half of total demand,\u201d he said.<\/p>\n \u201cThat’s not what the government should be doing. This is the time where the government should be taking a back step.\u201d<\/p>\n It comes after Reserve Bank Governor Michele Bullock on Wednesday warned if inflation remained persistent it would have \u201cimplications for the future of monetary policy\u201d and admitted it failed in containing inflation within its 2-3 per cent target band<\/a>.<\/p>\n \u201cInflation has been out of target for a number of years, that is very, very true,” Ms Bullock told a Senate Estimates hearing.<\/p>\n “That is why the board has always said they want to get it back, but they want to get it back in a reasonable time and the reason for that is inflation expectations.<\/p>\n \u201cThat is the whole purpose of the board: to try and bring it back sustainably. Have we done it yet? No, we haven\u2019t done it yet. So we need to keep working on this.”<\/p>\n Money markets are forecasting there to be a rate rise in September next year in a shock blow to mortgage holders desperate for more rate relief.<\/p>\n The opposition has blamed this on Labor\u2019s large public spending and its economic policy.<\/p>\n Asked how he would describe the approach taken by the Treasurer and Labor’s economic policies over the past few years, Mr O\u2019Brien questioned how Mr Chalmers was delivering Labor’s ideas.<\/p>\n \u201cI’d probably describe it as an enormous word salad,\u201d Mr O\u2019Brien said.<\/p>\n \u201cIn the budgets, they are meant to have a very clearly enunciated strategy, but there’s not one numeral in their existing strategy.<\/p>\n \u201cIt’s all words and it’s all driven by polling, but as anyone who does the budgeting at home knows, as anyone who runs a small business knows, it comes down to numbers.<\/p>\n \u201cThis government (and) this treasurer is purely focused on the rhetoric.\u201d<\/p>\n