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Pressure On Government To Contain Spending In Face Of Inflation


The federal government is apparently planning $1.5bn of energy bill relief for low-income households in the May budget to be matched by the states, according to The Australian. It is also under pressure to increase unemployment benefits significantly given high inflation. This extra spending is seen as making the RBA’s inflation fight harder.

  • As of December the budget deficit was $11.5bn better than projected in October. Treasurer Chalmers has said that most of this will be saved. He is aware of trying to repair the budget and not adding to demand pressures in the economy.
  • Independent economist Richardson noted that $6bn of lower government spending is needed to prevent one rate hike.
    - The Australian

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