One Nation Unveils Plans to Cut Government Spending
The party aims to reduce federal debt by merging departments and limiting the size of the public service.
Updated on Oct. 27, 2026 in Economic Policy
Live Poll
Should the federal government reduce public service staff to cut spending and manage national debt?
One Nation has announced a strategy to reduce federal government spending by eliminating duplicate departments and cutting public servant roles through attrition. This proposal follows a similar plan from the Coalition to slash $31 billion from federal programmes, including renewable energy and housing.
Why it matters
These spending cut proposals are designed to address the scale of federal debt and streamline the national bureaucracy. The initiatives coincide with persistent economic pressure as the nation manages inflation rates currently well above the Reserve Bank target.
Federal spending currently accounts for 26.9 per cent of GDP, while the trimmed mean inflation rate is 3.6 per cent. Financial markets currently price a 25 basis points interest rate hike by the Reserve Bank at a 62 per cent probability.
The players
One Nation
A minor political party in Australia that advocates for reduced government spending and smaller public sector bureaucracy.
The Coalition
A major centre-right political alliance in Australia that has proposed its own $31 billion federal spending cut package.
Barnaby Joyce
A prominent Australian politician who participated in the discussion regarding the proposed reductions in federal expenditure.
Reserve Bank
The nation's central bank responsible for monetary policy and maintaining an inflation target of under 3 per cent.
The details
The plan involves closing the Climate Change Department and potentially absorbing the federal Education and Health Departments into other bodies. Duplication between state and federal management would be eliminated, while public servant numbers would be lowered by not filling positions vacated by retiring staff.
Timeline
27 October 2026: Barnaby Joyce discussed the proposed spending plans.
28 October 2026: September inflation data was officially released.
November 2026: The Reserve Bank Board meets on Melbourne Cup Day.
December 2026: The mid-year economic update is expected to be handed down.
Macro View
These proposed spending reductions are being evaluated against the Reserve Bank inflation target. The current trajectory mirrors historical fiscal consolidation cycles where governments attempt to balance debt reduction while inflation pressures remain above central bank mandates.
Proposed cuts to federal programmes and potential department closures could lead to shifts in public service accessibility and funding for national health or education initiatives. These austerity measures aim to lower federal debt, which may influence long-term economic stability and interest rate expectations for households.
The takeaway
These proposals reflect a significant shift toward reducing the size of the federal government to combat inflation and debt. Citizens should monitor the mid-year economic update to see which specific services may be affected by these planned consolidations.
What happens next
The government is scheduled to unveil a specific savings package as part of the mid-year economic update in December 2026.
Further reading
For more context on current fiscal measures, visit the Economic Policy section.
Source note: This article includes information reported by 7NEWS.
Live Poll
Should the federal government reduce public service staff to cut spending and manage national debt?
