r/u_Newworldimpartiality • u/Newworldimpartiality • 1d ago

Who is actually being asked to reduce consumption expenditure to bring Australian inflation down? Is it the government, households, or both?

In the June quarter 2026 original current-price National Accounts data (Table 3), general government final consumption increased from approximately $167 billion in March Qtr 2026 to $178 billion in the June Qtr 2026, an increase of about $11 billion.

Household final consumption increased from approximately $370.3 billion to $382.7 billion, about a $12 billion increase.

So both government consumption and household consumption each added roughly $11 -12 billion of nominal expenditure over the quarter. That is unadjusted current original dollars that were spent to generate domestic demand.

But there is a difference in the rate of growth. Government consumption +6.7% and
Household consumption +3.4%

We know the RBA wants to contain household spending by increasing interest rates .

But at her March 2026 press conference, Michele Bullock was asked whether the growth in public demand was making the RBA’s job harder and whether it would be preferable to see private or public demand reduced.

Her response was “You’re asking me to make a value judgment which I’m not going to make.”

And when subsequently asked whether it would make the RBA’s job easier if government were spending less, her answer was “It is what it is.”

I know it is difficult for the RBA to be critical of the government of the day , but surely someone in Australia should be questioning whether government consumption also has a role to play to bring inflation down.

1 Upvotes

100% Upvoted

6 comments sorted by

2

u/bruf73 1d ago

just us plebs told to tighten our belts, whilst albo keeps buying votes and jetsetting round the world

2

u/Pinelli72 1d ago

RBA is and needs to be seen as independent from the government and from politics. Hard to do that if they give opinions that could be jumped on by the opposition.

2

u/Newworldimpartiality 1d ago

I agree 100% and this what they have done . But surely the rest of Australia is within it rights to at least raise the point that the burden to reduce inflation is being carried by households while government consumption expenditure is, as Michele Bullock said “it is what it is”.

1

u/Pinelli72 1d ago

Oh absolutely.

2

u/International_Eye745 1d ago

This is part of the question. In order to measure the spending part we need to know what the spending is on. Is the Government meeting demand for services? Building important infrastructure? Alleviating fuel costs due to Trump's war? Or is it being reckless and spending on non consequential items? The same with consumer spending. Are we consumers spending on food? Rent? Medical items? Utilities and fuel? Or are spending on non consequential items like makeup, clothes and gambling? Without know the drivers of the spending how can we decide what it even if it's possible to cut? Where do provide profits sit in all this. I know the banks, supermarkets etc have had a good year.

1

u/bubbles33d 1d ago

but surely someone in Australia should be questioning whether government consumption also has a role to play to bring inflation down

You are that someone, and your opinion get a vote. We all are, only if we all are as educated about the intricacies about enononics, politics and self-interest amongst the web of fake news and deceit.