Within milliseconds of the Reserve Bank announcing three weeks ago it was increasing interest rates, conservative politicians and economists blamed it on excessive government spending.

But is that true and, if so, where should spending be cut?

The Mid-year Economic and Fiscal Outlook released late last year estimated real spending growth for the 2025-26 financial year at 4.5 per cent, down on the previous year’s 5.5 per cent but certainly up on the pre-pandemic spending growth of the previous Coalition government.

But the budget deficit – which tells us how stimulatory the budget is – is a little over 1 per cent of GDP – smaller than the average of the pre-pandemic Coalition years.

This doesn’t sound like runaway spending. But nor is it reason to be complacent.

The federal government is working with the states to curb growth in spending on the NDIS, especially for children with mild disabilities.

The NDIS story is a repetition of what typically happens with big new spending programs.

In the lead-up to the 1987 election, following the Hawke government’s introduction of Medicare, opposition leader John Howard promised to “take a scalpel to Medicare”.........

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