In this interview, Adam Creighton appeared on Sharri Sky News Australia to discuss the IPA’s research on government spending.
All media appearances posted onto the IPA website are directly related to the promotion and dissemination of IPA research.
Below is a transcript of the interview.
Sharri Markson:
And for more, I’m joined by the Chief Economist at the Institute of Public Affairs, Adam Creighton. Adam, great to see you as always.
Adam Creighton:
Thanks, Sharri.
Sharri Markson:
So this the fourth monthly rise in a row of inflation. It does look like the cycle of rates falling is over now. Do you think that’s the case?
Adam Creighton:
Well, look, based on the current information, that’s probably true. These figures today are very embarrassing for the government. We now have the highest inflation rate, 3.8%, basically in the OECD pretty much, higher than the U.S., higher than the Eurozone, higher than the U.K. 3.8% is actually pretty high. I mean, before COVID, remember, inflation had a one in front of it. Now it’s 3.8%, and that’s not just the 37% increase in the price of electricity, Sharri, driving that. If you strip all of the extreme movements out, it’s still 3.3%, which is above the RBA’s target.
So the market pricing as of this afternoon was that there is going to be a rate hike rather than a rate cut as the next move. And of course, that’s bad news for people with home loans. So yeah, this is terrible for the government.
Sharri Markson:
So just breaking down a bit more what you just said there, so it’s not only driven by electricity price rises, which, as you said, we know they’ve increased now 37% over the past year, but if our inflation is now higher than the rest of the OECD, why is that?
Adam Creighton:
Well, it’s a complicated question, but it’s probably because the growth rate of the money supply is extremely high in Australia. So that’s called M3. It’s a bit technical, but there’s a lot more money-
Sharri Markson:
Okay, that is a bit technical, but is it the federal government’s fault? Let’s get it a bit more…
Adam Creighton:
Well, yes, also spending is growing at a rapid clip. I mean, I think from memory, nominal spending of the federal government is growing at something like 5 to 7% a year. That’s crazy. I mean, I’ve just come back from Argentina where I spent two weeks and you had a federal government there that has cut spending by 30% and inflation has dramatically dropped. And so here, the contrast is extraordinary to me coming back. You’ve got 7% spending growth and you have very high inflation rates for an OECD country.
And I think part of that is obviously spending. I mean, the NDIS, just look at the NDIS. In the last three months, the number of people on the NDIS grew 5% to 751,000 people. I mean, that’s kind of crazy, right? Isn’t it?
Sharri Markson:
Mm-hmm.
Adam Creighton:
And not only that, but I think I saw reports today show, you probably know them, but the Public Service has grown 25,000 in the last three years, or no, sorry, 40,000 to 200,000. So you’ve got the NDIS out of control, public sector out of control, spending is growing 7% a year.
Sharri Markson:
Energy prices adding to that as well?
Adam Creighton:
Of course. I mean, basically we’re becoming a Peronist state basically. We’re swapping places with Argentina.
Sharri Markson:
It’s such a scary thought.
Just looking at the Coalition’s economic policy now, in Paul Kelly’s column today, he pointed out that Sussan Ley has actually been pushing an economic agenda that’s more bold than people realise. In fact, he described it as “loaded with dangerous ambition.” He says that “Ley has pledged a personal income tax cut at the next election,” which Abbott avoided, that she’s “put industrial relations back on the agenda,” again, Abbott, Turnbull, Morrison, and Dutton wouldn’t do this, and she signalled that she’d “welcome and defy the inevitable labour scare campaign triggered by her fiscal responsibility pledge.”
So I’m just keen to hear your thoughts on the policies she has put forward so far. Do you agree with Paul Kelly that it’s a dangerous agenda, that it’s too ambitious?
Adam Creighton:
Well, I think it’s too early to know yet because the media is not focused on those things that you just said. They’re focused on all of the internal party division over net zero. But now that’s been settled, I hope that they do focus more and we hear more about these broader policies you’ve just mentioned.
I mean, it’s a great thing, I think, that the Coalition’s promising to cut income tax, they’re going to dump net zero, they’re going to look at industrial relations. I mean, remember, we’ve had a massive re-regulation of Australia’s industrial relations system. I mean, in some ways, we’ve gone back to the 1980s or earlier so it needs to be looked at. And in fact, so I don’t mean to harp on Argentina, but I was telling them over there about our system, and in some ways our system is more regulated than theirs is, and they were shocked by that. And it really is a crazy system where you’ve got all this micromanaging of different industries, different wages, different T breaks, all these conditions. It’s got to be looked at.
So I think it’s a credit to Sussan Ley, but the media is not focused on these things yet sadly, and because of the leadership ructions, it might not be. Let’s just wait and see.
Sharri Markson:
And the regulations are only going to get worse because we’re seeing in Victoria, Jacinta Allan planning to legislate mandatory work-from-home days and this is going to be a night-
Adam Creighton:
Well, that’s not even constitutional. She won’t be able to do that. But anyway, it’s all politics, Sharri.
Sharri Markson:
She is going to do it. She is doing it though.
Adam Creighton:
Well, but it’s going to be struck down ultimately, I think. I mean, Victoria gave back all its IR powers to the federal government under Jeff Kennett because he tried to do very good things on IR. I think he tried to introduce a simple system in Victoria and he failed and he just said, “Okay, forget it. Give it back to the Commonwealth.”
It sounds to me, and I’m not a lawyer, but it sounds to me like a work-from-home law is pretty much industrial relations and that’s no longer Victoria’s purview.
Sharri Markson:
I mean, I’d love to know who plans to take this to the High Court. I mean, if you’re saying it’s unconstitutional, is the IPA going to take it up?
Adam Creighton:
Oh, business will. Someone business would. Maybe, I don’t know. I don’t know. But some business probably will. But of course, it’s a stupid law anyway, just to be clear. I mean-
Sharri Markson:
Of course.
Adam Creighton:
… it should be up to businesses and employees-
Sharri Markson:
Absolutely.
Adam Creighton:
… to make that decision.
Sharri Markson:
100%. All right, Adam Creighton, thank you so much.
This transcript with Adam Creighton talking on Sharri Sky News Australia from 26 November 2025 has been edited for clarity.
