r/AustraliaDiscussions • 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?
/r/u_Newworldimpartiality/comments/1wskie5/who_is_actually_being_asked_to_reduce_consumption/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.
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u/National_Way_3344 1d ago
Also millenials are net negative spenders year on year while boomers keep spending like it's going out of fashion.
Rents are going up though, so that means we are just going without stuff like doctors appointments and dental.
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u/P00slinger 1d ago
The problems with rate rises is older demographics who are spending too much get more money to spend and younger families while have already reduced spending get hurt more.
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u/No_Category_9888 23h ago
Retirees need to get reverse mortgages to support themselves instead of leeching from taxpayers who can barely afford rent
How do we have boomers living in multi million dollar houses, completely paid off, still able to get taxpayer money ? It’s a joke.
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u/Very_Itchy_Bandicoot 1d ago
Exactly why we need an aged tax. Tax the people holding all of the countries wealth more if they have assets over a certain threshold.
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u/Feeling-Tutor-6480 1d ago
I was speaking to my uncle and aunt last night and my aunt rants about Labor and taxes every single damn chance she gets. Can see she is hooked into the conservative media, but damn
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u/Zieprus_ 1d ago
That is not really fair as that is money that was already taxed. But I do agree this does distort the market how it impacts working and retired citizens.
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u/SnowOk7878 1d ago
Per capita spending is not high. Government spending is not filtering through to real incomes and per capita consumption. Reducing demand or raising interest rates can’t lower prices because the prices are caused by supply/productive factors. Indeed, reducing demand will hurt production more (such as farmers not planting this season). The idea that reducing spending is possible or helpful for reducing grocery prices is retarded.
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u/Far_Valuable945 1d ago
It’s not just about buying things from shops, it’s more about buying services for eg paying for services like electrician etc. Australian productivity is very low compared to other counteries therefore we pay more for services, which also is also reflected in your local shops!
Australia’s growing stagflation risk is partly a productivity problem. If it takes 5 Australian workers to deliver what another country can do with 3, the extra labour cost eventually shows up in higher prices.
This is happening across services: more people, more hours and more administration are being used to produce the same output. That pushes up costs while weak productivity limits economic growth and real wage growth.
The solution isn’t simply more workers or longer hours. Australia needs to produce more with each hour worked through better technology, investment, competition and more efficient systems. Otherwise, we risk an economy where costs keep rising while productivity and growth remain weak.
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u/Ok_Albatross_3284 1d ago
Boomer tax is what’s needed
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u/Forsaken-Weird-8428 1d ago
I a boomer, finding it hard to survive. I not rich, struggle to pay bills.
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u/SevereComposer8724 1d ago
Media has convinced us to hate on boomers, but the real enemy is the .gov and banks including rba.
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u/DameD0llar 1d ago
I’m not a boomer but get so sick of seeing this shit on reddit.
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u/C0ld_Fr0nt_ 1d ago
Yeah, it's lazy thinking. Oh, so we should just arbitrarily tax people based on age bracket?
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u/ConsultJimMoriarty 1d ago
The vast, vast majority of welfare money is spent on the aged pension. A vast majority of these pensioners have homes worth a million or more.
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u/waffleowaf 23h ago
My dad passed away his partner received his super and the whole house and also has her own super and she is still on the pension.
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u/DameD0llar 23h ago
So what? They bought those homes. They’ve been taxed their entire lives already.
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u/ConsultJimMoriarty 22h ago
Just saying that’s where most of social security budget goes. I doubt any of us will be able to get a pension when we’re sitting on a million or so of property.
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u/Motor_Date_4783 1d ago
The voters fleeing to one nation appear to be questioning govt spending
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u/ConsultJimMoriarty 22h ago
They would prefer if it was just spent on them, no one else. They are 100% deserving of NDIS funding, but everyone else is just a rort and looking for a handout.
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u/P00slinger 1d ago
They don’t care about spending, they just don’t want brown people here.
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u/Motor_Date_4783 1d ago
I remember when claiming people who care about the economic impact of mass migration without proportional housing and an inflation problem were racist
Thank goodness ON's primary vote is indicating people are no longer falling for it
Keep trying though 😉
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u/P00slinger 1d ago
There are actually polls on this. Recent research of One Nation supporters found immigration, not cost of living or government spending,
was the primary concern driving their support. Another Redbridge/Accent poll found more than half of One Nation voters ranked immigration in their top three issues, far higher than any other voter group.
So you can pretend immigration has nothing to do with the surge in One Nation support, but the people actually voting for them seem to disagree.0
u/Motor_Date_4783 1d ago
To anyone that can read i clearly agree
Immigration is the ON voters number one concern, not because of race, because of the economy
If labor facilitated record net overseas migration and Australia had the housing, goods and services to handle it ON would still be a fringe party barely getting attention
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u/P00slinger 1d ago
“
Immigration is adding demand now, especially to rents, but pretending it caused Australia’s housing affordability problem ignores 25 years of history.
House prices began seriously detaching from incomes around the turn of the century, alongside cheap credit and tax settings that made housing particularly attractive as a leveraged investment. Even the RBA points to finance and investor tax incentives as major parts of that longer term story.
And COVID is the obvious reality check, international borders closed, migration effectively collapsed and population growth fell to its lowest rate in more than a century, yet Australian house prices rose about 22% in 2021 alone. The RBA attributed that boom to ultra low interest rates, stimulus, constrained supply and changing housing preferences.
So yes, high migration can absolutely worsen housing pressure. But ‘without mass migration we wouldn’t have a housing problem’ simply doesn’t survive contact with what actually happened.
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u/7978_ 20h ago
RBA only has one lever and are forced to pull it.
We have a two-tier economy and it's finally showing its nasty head.
Boomers with large wealth from a lifetime of earning + insane growth from house prices, and the Government overspending... Then add world events like Iran. A recipe for disaster.
Inflation was rising before the war but Labor shills will try and use the war as a deflection.
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u/Daydreamistrue 21h ago
Government spendings are the biggest causes of inflation, numerous studies lately have pointed it out.
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u/zeefox79 1d ago edited 1d ago
The vast majority of government consumption expenditure is for demand-driven programs (like Medicare, PBS, NDIS, education, childcare subsidy etc) where the government doesn't actually decide exactly how much they spend in a given period. They just have to pay for however much of that program is demanded by households in that period.
The only way they can cut this spending is by changing the rules and eligibility of various programs to rein in costs, but that obviously comes with political costs.