Raine & Horne executive chairman Angus Raine (pictured) has called on Treasurer Jim Chalmers to disclose how much federal government spending is adding to inflation and mortgage rates, after the Reserve Bank of Australia (RBA) raised the cash rate for a fifth time this year.
The RBA lifted the cash rate to 4.85% on 3 November, its highest level in 18 years. In a media release issued the same day, Raine argued that government spending, rather than global factors alone, was driving the price pressures behind the increases.
“Australians are being financially squeezed for a problem they did not create,” Raine said.
Canstar data points to that pressure, with one in 10 mortgage holders saying they won’t be able to meet higher repayments.
Raine acknowledged that conflict in the Middle East has pushed up fuel and fertiliser costs but said this was outweighed by demand generated by federal spending. He pointed to more than $17 billion allocated to infrastructure in the 2025–26 Budget and a $120 billion infrastructure pipeline in the 2026–27 Budget.
In his view, those projects are competing with home building for tradespeople and materials. He cited Master Builders Australia forecasts of fewer than 920,000 new home commencements in the five years to 2030–31, an 8.4% downgrade from its March 2026 projections.
Chalmers has rejected claims that spending is the main driver. After the RBA’s split 6–3 decision, he said budgets weren’t the primary driver of prices but that the government took responsibility for its part in fighting inflation, and flagged more savings in December’s mid-year budget update.
Raine also took aim at housing policy. He said changes to negative gearing and the capital gains tax discount, announced in the May Budget, had led some property investors to put purchases on hold, which could worsen rental shortages. Cotality data shows national gross rental yields reached 3.85% in September, their highest level since August 2019.
“You cannot solve a housing shortage by discouraging the people who help finance and provide rental properties,” he said.
According to Raine, first-home buyer incentives boost demand without adding enough supply, while rising rates reduce buyers’ borrowing capacity. He cited Cotality research finding that prices for properties within the expanded 5% Deposit Scheme limits rose 6.7% in the six months after the scheme’s introduction, compared with 3.6% for more expensive homes.
“Helping first homebuyers into the market is important, but what good are government incentives if they simply fuel demand and push property prices further out of reach for younger Australians?” Raine said.
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