Monday, 28 September 2026

Chalmers squanders higher taxes with reckless spending, debt soars fuelling inflation & interest rate hikes

Media Release with Senator the Hon Jane Hume

Today Jim Chalmers has handed down his second budget deficit in a row - $22 billion in the red - blowing out to be more than double the deficit he handed down the year before.

The higher taxes Australians have paid have been squandered due to his reckless spending which is keeping inflation and interest rates higher for longer, hurting all Australians.

Labor’s reckless spending grew at 4.3% in real terms, nearly double the rate of economic growth at 2.4%. That has pushed spending to 26.9% of GDP, the highest share of the economy since 1986-87 outside the pandemic.

Jim Chalmers and Katy Gallagher have turned crisis level spending into business as usual.

The Treasurer likes to compare to previous budget expectations, but this is not comparing it to the reality that Australians are facing.

A bigger budget deficit of 0.8% of GDP in 2025-26, more than double compared to the year before, is expansionary fiscal policy and puts more pressure on our economy.

Chalmers claims a $230 billion improvement in the Budget, but he fails to mention he received an additional $382 billion in tax receipts.

He also failed to mention that tobacco excise came in a further $200 million below what was forecast in this year’s Budget.

Jim Chalmers continues to live in denial over his growing deficits and trillion-dollar debt.

Quotes attributable to the Deputy Leader of the Opposition:

“Labor has been handed a massive windfall revenue and still can’t get its spending under control.

“This is Labor’s fiscal record: more tax, more spending, more debt. After all that revenue, Australians are still being left deficits as far as the eye can see and future generations will be left to pay that bill.

"Labor had an opportunity to use higher tax receipts to repair the Budget. Instead, it has squandered that revenue on a spending spree that is growing at almost twice the rate of the economy, and he still has no plan to pay down Labor’s trillion dollar debt.

“You can’t tax your way to prosperity, and you can’t spend your way to productivity. Labor needs to get spending under control and focus on growing the economy, not growing government.”

Quotes attributable to the Shadow Treasurer:

“The Treasurer has forecast debt and deficits for decades because he can’t kick his spending addiction, and even when he gets a windfall he could use to restructure, he just keeps fuelling inflation and higher interest rates”.

“With interest rates set to rise because the Treasurer can’t kick his inflation addiction, we know that he can’t afford to because it is underpinning his Budget held together by inflation and gaffer tape”.

“Labor’s model of budgeting is to take from the kitchen tables of the nation to plug their Budget holes, leaving less to spend at the supermarket”.

“This announcement is a desperate attempt to distract Australians from the prospect of three more interest rate rises thanks to Jim Chalmers’ addiction to spending and inflation, including tomorrow that will push many families and small businesses over the edge”.

[ENDS]