The Shadow Treasurer, who you would think would have an easy day given the RBA decided not to cut interest rates, unfortunately keeps finding a rake to step on.

Ted O’Brien asked the PM (who flicked the question to Chalmers) that

“RBA’s forecast for headline inflation to peak at 3.7%. In the middle of next year, well above the target band and not to return to the band until 2027. My question to the Prime Minister is, given the government’s spending is running four times faster than the economy, isn’t it time to rein the Treasure inner to stop his spending spree?”

Fair enough I guess, except Chalmers had actually read the RBA’s statement on monetary policy which contains those forecasts, and alas for O’Brien, a few others.

While the CPI is not expected to get below 3% until June 2027, the RBA notes that

Year-ended headline inflation is expected to remain above 3 per cent for much of 2026, before returning to be a little above the midpoint of the target range by late 2027.

You can see this here:

So you might think case closed, O’Brien wins.

Problem is the RBA also noted that:

Changes in the timing of electricity rebates will cause additional volatility in headline inflation over the next couple of years.

So it is really due to a lot of erratic stuff, not underlying inflation. And while it did slightly revise up the underlying inflation measure – which the RBA actually targets, the revision was small, and we’ll be back under 3% soon – not in 2027 but next year:

And then we get to O’Brien’s point about “the government’s spending is running four times faster than the economy”

Firstly, that is a rather dopey point – if the economy is running slowly, the government should be assisting to stop the economy going into a recession. The RBA estimates that GDP will only grow around 2%. That is well below the long-term average of 2.75%-3%. Given public demand on average grows at around 3.3%, anything below that is actually below what the government probably should be spending.

As it is the RBA has revised down how much the public sector is contributing to the economy. The government is not only contributing less to the economy than usual, but probably less than it should be given rising unemployment.

But when you only care is attacking government spending, as is the case for Ted O’Brien, that logic does not register.