Labor’s budget forecasts for spending to edge down from a 40-year high are built on shaky savings assumptions, economists say, as they warn the government’s big-spending track record suggests expenditure is unlikely to be reined in.
Total federal spending next year is forecast to peak at 27 per cent of the economy, which is the highest share since 1985-86, excluding the huge stimulus spending years during the pandemic under the former Coalition government.
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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 first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com
