private market was being crowded out by the government<\/a>.<\/p>\n“Private demand has been quite constrained for many years now,” Mr Oliver told Sky News on Wednesday.<\/p>\n
\u201cThe strength has actually come from public spending … and that has meant more demand in the economy than would otherwise be the case.\u201d<\/p>\n
Ms Bullock on Friday admitted during a heated House Standing Committee on Economics that government spending was a key factor of the aggregate demand driving inflation.<\/p>\n
When asked by Liberal MP Simon Kennedy if government spending affected the bank’s decisions, Ms Bullock said: \u201cWell, it does, as does private. It\u2019s part of aggregate demand.\u201d<\/p>\n
“It does, because as you say there\u2019s some public demand and then there\u2019s transfers and taxes which also flow into that,” Ms Bullock said.<\/p>\n
\u201cIt’s factual, it is not an opinion, it’s not a judgement, it is a fact. That’s all it is.\u201d<\/p>\n
AMP\u2019s chief economist Shane Oliver similarly voiced \u201cvalid concerns\u201d about capacity constraints in the economy which were \u201clikely to keep the risk of a further rate hike\u201d.<\/p>\n
\u201cThe best thing government can do to help alleviate this is to lower the level of public spending,\u201d Mr Oliver said in a statement on Tuesday.<\/p>\n
EQ Economics\u2019 managing director Warren Hogan said federal and state governments did not need to cut spending \u201cwilfully and widely\u201d to calm the economic pressures, but called for the spending to be \u201crestrained\u201d.<\/p>\n
\u201cMaybe that’ll get the job done,\u201d Mr Hogan said.<\/p>\n
\u201cBut if the governments of Australia do nothing, I think the RBA is going to have to take the cash rate above where it was a year ago – above 4.35 and most likely towards five (per cent) and put this economy at risk of recession.<\/p>\n
\u201cThey have to do that though if the government of Australia will not act.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Labor\u2019s \u201cdetrimental\u201d massive spending agenda is \u201cdrag\u201d on the economy and creating a \u201creally sad time in Australian…\n","protected":false},"author":2,"featured_media":463539,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164,20309,5465,5626,7054,183,237673],"class_list":["post-463538","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy","tag-government-spending","tag-inflation","tag-interest-rates","tag-rba","tag-reserve-bank-of-australia","tag-roger-corbett"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/463538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=463538"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/463538\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/463539"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=463538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=463538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=463538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}