Labor to cut spending across all government departments to fight inflation
Finance Minister Katy Gallagher says no area of government spending will be exempt from cuts as Labor tries to rein in inflation.
The Albanese government wants budget savings across all departments. It faces pressure over inflation that won't come down.
Finance Minister Katy Gallagher told ABC's Insiders on Sunday that no area is exempt from cuts in December's budget update. Government spending reached 26.9 per cent of GDP in 2025-26.
This was the highest share in four decades outside the pandemic. September inflation came in at 4.3 per cent, slightly above what was expected.
This is driving expectations that the RBA will raise rates again on Tuesday. Global factors like Middle East oil shocks and surging AI investment are beyond Canberra's control.
But the government must tighten its belt. Gallagher said discussions about savings were happening.
- 26.9 percent in 2025-26
- Government spending as share of GDP
- 4.3 percent
- September inflation rate
- One percent
- RBA trimmed mean inflation
- December
- Budget update timing
Why it mattersGovernment spending cuts will affect programs and services Australians rely on. These include welfare, infrastructure, and public sector jobs. The impact depends on where cuts fall.
AustraliaIf spending cuts are broad and deep, Australians could see reduced services, fewer government jobs, or changes to welfare payments and subsidies such as EV tax breaks or home battery schemes.
✓ Claims checked against the source and corrected before publish. checked 2 h ago
