Economist and Compare The Market economic director David Koch has intensified his criticism of the Reserve Bank of Australia, calling on policymakers to shift focus away from household spending and hold governments accountable for their role in driving inflation — just days before the RBA's next rate decision on September 29.
Koch, formerly the co-host of breakfast television programme Sunrise, made his latest comments on Wednesday, one day after he penned an open letter to RBA Governor Michele Bullock. Financial markets are widely anticipating another rate increase at next week's board meeting, following warnings from Bullock that inflationary pressures continue to build.
David Koch's message to the RBA: 'Don't keep punishing us'
Appearing on Sunrise, Koch delivered a direct plea on behalf of Australian households, framing his argument in stark terms.
"Don't keep punishing us for inflation," he said. "For years, you've told Australian households we've got to tighten our belts. We can't keep fuelling inflation. Australian households have done that."
Koch pointed to a broad deterioration in economic confidence as evidence that households had already done their part. Consumer sentiment is down, business confidence is down, and spending has fallen — yet inflation remains persistent, he argued, because many of its key drivers are beyond the reach of ordinary Australians.
"We're doing the right thing, but a lot of what's driving inflation is beyond our control," he said.
Among the factors Koch highlighted was the price of global oil, which he said was already hitting motorists hard before any decision by the RBA.
"We're paying the equivalent of an increase in interest rates just at the pump," he said. "And now we're going to get a rate rise on top of that."
Government spending in the crosshairs
Central to Koch's argument is the claim that spending across all levels of government — not just household consumption — is a significant contributor to demand-driven inflation. He cited government-influenced prices including healthcare, childcare, council rates, state government charges, and private health insurance premiums as areas where policymakers hold direct or indirect sway over cost pressures.
He also noted that wages growth in the public sector has outpaced that of the private sector, adding further stimulus to the economy.
"Government spending and government pricing of health, childcare, all the things that they can influence — government wages are way higher than private sector wage increases," he said.
Critically, Koch was careful to frame his critique as non-partisan, directing his comments at governments of all political persuasions and at every tier of the federation.
"I'm not being political. It's not one party or another. It's all levels of government. States are probably the biggest to blame," he said.
He argued that government expenditure has now surpassed even the extraordinary levels seen during the pandemic, when stimulus spending was deployed to prevent economic collapse. That elevated spending, he said, is now reheating inflation — and it is households bearing the cost through higher interest rates.
"Rein the spending back and take the inflation reheat out of it because we're paying for it," he said.
What the RBA is watching ahead of its September 29 meeting
Governor Bullock, speaking on Tuesday, acknowledged the RBA was closely monitoring a range of risks including excess demand, elevated oil prices and inflation expectations. She stopped short of signalling the board's likely decision at next week's meeting.
The cash rate currently sits at 4.35 per cent, following three increases already delivered earlier this year. The RBA's stated goal is to return inflation to its target band of 2 to 3 per cent.
For a deeper look at the forces shaping price pressures across the country, see our analysis of the current state of inflation in Australia, including trends, causes and economic implications.
With another potential rate rise looming, Koch's intervention reflects a growing frustration among economists and households alike — that the burden of fighting inflation is falling disproportionately on those who have already changed their behaviour, while structural drivers linked to public sector activity remain largely unaddressed.
