Lowe Calls for Budget Surpluses to Ease Inflation Pressure

Former Reserve Bank of Australia governor Philip Lowe has called on the Albanese government to run large budget surpluses and cut spending to ease pressure on inflation and interest rates.

Lowe made this suggestion in a recent interview, citing the need for fiscal discipline to help manage inflation, which has been rising since the pandemic. He noted that the relationship between Labor and the RBA had become 'more strained' since the central bank began increasing interest rates four years ago.

There is no mention of specific targets or figures in Lowe's comments, but his emphasis on budget surpluses suggests a desire to see government finances become more robust. This would likely involve reducing spending and/or increasing taxes, although Lowe did not specify which approach he prefers.