Labor burning through billions as ratings agency warns record spending is fuelling inflation

One of the world’s rating agencies is warning the Labor government and the Reserve Bank are pulling Australia’s economy in different directions.

S&P Global Ratings warns the government’s overreliance on revenue windfalls could be an issue for the budget’s bottom line, and that record spending is complicating the job of the Reserve Bank by driving inflation higher.

Labor is on track to use up all of its $180 billion in savings plus another $100 billion despite initial projections indicating more than $470 billion in revenue by 2030.

Treasurer Jim Chalmers claimed the May budget delivered the biggest savings package in decades; independent economists believe that claim is based on favourable projections from future tax changes.