Kochie Challenges RBA on Inflation Role of Government Spending

Former Sunrise host David 'Kochie' Koch has written an open letter to Reserve Bank of Australia governor Michele Bullock, calling for clarity on the role of government spending in driving inflation. He argues that households are being punished with higher mortgage repayments while governments are responsible for fueling demand through their own spending.

Koch points out that Commonwealth Bank, Westpac, and ANZ have all warned of another interest rate hike next week, taking the cash rate to 4.6 percent on September 29. He notes that this will only harm ordinary Australians, who are already carrying a heavy burden of interest payments.

Koch urges Bullock to publish an estimate of how much of the cash rate is attributable to government spending and to explain where the rate would be if government spending had grown in line with GDP rather than ahead of it. He also calls for a fiscal statement signed by federal and state treasurers committing to a public spending path consistent with the RBA's inflation target.