Treasurer Jim Chalmers's latest federal budget includes more than $80 billion of 'spending' not on the books
ABCGovernments on both sides of the political fence have long done it, and the current federal budget features the same old accounting trick where billions of dollars of spending are shifted off-balance sheet by classifying it as investment. In table 3.4 of the budget papers under "total net cash flows from investments in financial assets for policy purposes" there's more than $80 billion going out the door over the forward estimates. "The attraction for the government is that such spending is 'off-budget' — it doesn't appear in the underlying budget balance that drives all the media headlines on fiscal policy," My Blythe says. Michael Blythe, who is a former Commonwealth Bank chief economist, says all the extra spending — much of it going to households — is going to make the Reserve Bank's job harder and warns the central bank is "unlikely to join any global rate cut party before early 2025". Chris Richardson says he is "a bit grumpy" with the budget being potentially inflationary by giving a "massive amount" of spending capacity to Australians, who will be likely to use it.
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