Treasurer Jim Chalmers Vows Budget Savings, Downplays Cost-of-Living Relief

Treasurer Jim Chalmers has vowed there will be more savings in the mid-year budget update but downplayed the prospect of more cost-of-living relief for Australians.

Prime Minister Anthony Albanese had indicated this week help was on the way for households, but Mr Chalmers said the government was looking to run a "tight ship" because of sustained pressure on the budget.

He told Insiders a savings package would feature in the budget update, which is due in mid-December.

"There is very, very substantial and intensifying pressure, not just on our budget but on budgets around the world."

The treasurer said the package would be influenced by the inflation challenge and the "helpful and responsible role" the government "intend to play" to see that figure come down over time.

"So we can get real wages growing again and so some of this pressure can come off people," he said.

On Wednesday, the Reserve Bank of Australia raised interest rates to a 15-year high.

Reserve Bank governor Michele Bullock said she would not "play the blame game", but warned inflation "isn't all about the Middle East conflict".

On Sunday, Mr Chalmers said "no serious observer" would disagree the war in the Middle East was putting "very substantial" pressure on the Australian economy.

He said additional government spending had been concentrated in areas such as bulk billing, to ease pressure on family budgets.

The Coalition had argued the government was spending too much and had contributed to inflation.

Shadow Treasurer Tim Wilson labelled Mr Chalmers a "disastrous treasurer" and called for him to step down.

"He's actively stoked inflation, and he's fundamentally undermined the success of this country," Mr Wilson said.

Cost of government debt to rise by billions

The treasurer also warned the cost of servicing government debt would rise by billions of dollars as borrowing costs around the world increased.

US government bonds were heavily sold off last month, in a sign investors were demanding higher returns to lend money.

Bonds are essentially IOUs issued by governments to borrow money and are bought and sold by large investment funds as well as individual investors.

The bond market is generally seen as safer than the share market, but big swings in bond prices can be an early warning sign of financial stress.

Mr Chalmers said the government's trillion-dollar debt burden would balloon as cheaper debt is paid off, and the government is forced to turn to new, more expensive borrowing options.

"This spike in borrowing costs in the major economies will also play out here," he said.

"The pressure will still come to Australia, unfortunately, and you'll see in the billions of dollars the magnitude of pressure, coming from those bond yields which are changing so quickly."