Labor’s budget ‘cuts’ bigger than just public service

Luke Kinsella and John Kehoe

Updated Dec 2, 2025 – 7.35pm, first published at 6.34pm

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The federal government’s search for savings has broadened beyond the public service to the Commonwealth’s entire $780 billion annual spending budget, such as defence, social welfare and other programs.

The admission by Finance Minister Katy Gallagher and her department officials that Labor is scrutinising the lowest 5 per cent of spending across ministerial portfolios came on Tuesday as new figures show public sector spending is growing at its fastest pace this year.

Luke Kinsella is a journalist based in The Australian Financial Review’s Sydney office. He was previously a policy analyst at Treasury.

John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury.