David Koch blames federal government spending for inflation surge
David Koch argues federal government spending, not market supply and demand, is the main driver of Australia's inflation crisis.
Jim Chalmers blamed the Iran war for inflation on Tuesday. David Koch, a television presenter and business owner, challenged that narrative in a letter to Reserve Bank Governor Michele Bullock.
Koch argues the real culprit is Commonwealth government spending, which has climbed to 26.8% of GDP, the highest level outside the pandemic since 1986. Koch wrote that "a meaningful slice of the inflation your board is trying to contain is not being generated in a shopping centre.
It is being set in a cabinet room." Koch notes that business investment is falling and individuals are saving more.
Yet the economy is still running hot. If government spending is the main cause, he argued, the RBA should know the true scale.
Then Australians understand who is responsible for the extra $4,212 a year added to average mortgages.
- 26.8%
- Government spending as percentage of GDP
- $4,212
- Extra mortgage cost per year
- 1986
- Highest government spending since
Why it mattersWho caused inflation determines whether interest rate rises are the right cure or whether different policy changes would work better.
AustraliaAustralians paying higher interest rates on mortgages and struggling with cost of living want to know if the RBA is fighting the right battle.
✓ Claims checked against the source and corrected before publish. checked 2 d ago
