The Morning Edition Is government spending really driving inflation?
Feb 12, 2026
Natassia Chrysanthos, federal political reporter with quick takes on budgets and elections, and Shane Wright, economics correspondent who digs into fiscal data, unpack whether recent government spending helped fuel inflation. They compare forecasts to actuals, quantify spending rises, point to big drivers like NDIS, childcare and health, and discuss political risks and tax options.
AI Snips
Chapters
Transcript
Episode notes
Government Spending Exceeded Earlier Forecasts
- Government spending this year is higher than both Josh Frydenberg's and Jim Chalmers' earlier forecasts, showing fiscal pressure.
- The December forecast put total spend at about $787 billion, roughly $100 billion above Frydenberg's prediction.
Veterans' Backlog Became A Costly Fix
- Shane described the veterans' compensation backlog as a legacy cost from under-resourcing the department.
- The government had to find about $13 billion, including roughly $5 billion this year, to address it.
NDIS Growth Is Structural, Not Just Political
- The NDIS is demand-driven and grew far beyond initial expectations, becoming the third-largest program after GST and the age pension.
- It expanded rapidly (about 20% a year) due to design flaws, loose pricing and lack of alternative state services.