RBA’s inflation fight faces a government spending problem

Dale Gillham likens Reserve Bank’s inflation fight to tug of war, urges government to curb spending amid rising household costs

Dale Gillham compares the Reserve Bank’s battle against inflation to a tug of war against sumo wrestlers, arguing that government spending is working against efforts to slow rising prices.

He says households have already tightened their belts, while the government needs to do more.

Gillham says higher interest rates are placing further pressure on mortgage holders, while rising oil prices are only one factor in inflation.

His comments raise questions about the balance between government spending, monetary policy and household costs.