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John Kehoe

Government spending blowout is the size of the mining boom

Like the mining investment boom of the early 2000s, the economic shock from higher government spending will have implications for inflation, productivity and interest rates.

John KehoeEconomics editor

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The real increase in federal and state government spending by about $125 billion a year since before the pandemic now rivals the size of the once-in-a-century mining investment boom that almost blew the lid off inflation.

Like the mining investment boom of the early 2000s, the economic shock from higher public demand will have ongoing implications for inflation, productivity and interest rates.

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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com

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    Original URL: https://www.afr.com/policy/economy/government-spending-blowout-is-the-size-of-the-mining-boom-20240924-p5kd0b