Colleen Harkin on The Bond Report Sky News Australia – 28 February 2026

Caleb Bond:

Now a report from the Institute of Public Affairs this week has found government spending is up an extraordinary 165% since 2000 in real terms. Joining me now, research fellow at the Institute of Public Affairs, Colleen Harkin.

Colleen, thank you for joining me. That is an extraordinary number. I knew ’cause I’ve crunched the numbers just in the time that the Albanese government has been in power and worked it out for inflation and stuff, and real spending has gone up per head of population. But for 165% since the turn of the millennium, that’s incredible.

Colleen Harkin:

Yeah, it’s an incredible figure, isn’t it, Caleb? Thanks for having me on. So in the year 2000, the private sector percentage of GDP was about 28%, but now these numbers have almost reversed from the year 2000. Government spending was at 21 … Sorry, GDP was at 21%, it is now at 29%. That means that we’ve got about a third of our GDP, of spending is government spending on itself. It’s an enormous structural change. It’s a significant difference. As you said, it’s 165% increase in real terms.

The other thing to remember in this is that government doesn’t build stuff, it doesn’t create stuff, that the innovation and prosperity comes from individuals in the private sector, but the government has taken over that great majority of the spend. And that this explosion, as it is, also brings into question the core components of this. So for example, in the defence area, the increase has only gone from 1.8 to 2%, and a lot of people have been crying out for an increase in defence for a long time, but that’s not where the money is going.

It’s sort of going on this sort of government bureaucracy, which of course brings a lot with it in terms of red tape, regulation, bureaucracy, which is the stuff that’s burdening business. So we’ve got it all back to front.

Caleb Bond:

Well, in the last few years, there’s something like 75 to 80% of jobs that have been created are in some way funded by the government. They’re in the sort of service sector, it’s aged care, it’s education, it’s healthcare, a lot of it’s NDIS. So we bring in all these migrants, then we basically invent jobs that the government gives money to people to then pay them. I mean, we’re not actually creating any jobs. We’re just moving government money around to make it look like we created jobs.

Colleen Harkin:

Well, that’s right. It’s a circular argument. We bring more people in to create more spending in the government sector. We’re not actually creating the innovation that is required. And as I just said, I mean, the government, they’re not the innovators of society. They’re not the people who create wealth and prosperity. That belongs with individuals and business. And when you have a third of the GDP being spent on government spending on itself, it’s a terrible scenario for the growth of the nation. They’re not productivity numbers at all. They’re squashing business.

Caleb Bond:

Well, those productivity numbers, so while government spending has gone up, what has it done to all of the markers of productivity and movement in our economy, ranking it against the rest of the world?

Colleen Harkin:

Well, I mean, I can’t speak specifically against the rest of the world, but you have to look at it and say, if the government is taking out those numbers out of the marketplace, it’s very difficult to compete with government. Like with the bureaucracy of that size, private business can’t compete with it. And at a small scale level, we see that all the time with tradespeople in Victoria, for example, trying to compete against the salaries that are being paid by the Big Build, the Victorian government’s big infrastructure scenario.

So when you’re pulling people away from private business and into government spend, all you’re doing is moving the feast over to an environment where it’s not actually creating personal and individual benefit. It’s only benefiting the bureaucracy and that big machinery.

Caleb Bond:

But Colleen, don’t be silly. Didn’t you know that none of this affects inflation?

Colleen Harkin:

No. No, apparently not. It worries me enormously that the treasurer doesn’t seem to understand that government spending is very much part of the accrued spending in the nation, and therefore it is very much part of the story about what’s happening with inflation. I do wonder whether treasury is the right portfolio for Dr. Chalmers. I suspect something like, I don’t know, sport, another portfolio might be more suitable, I think.

Caleb Bond:

And I think Tim Wilson will give him a run for his money as well. Thank God. Colleen Harkin, thank you so much for joining.

This transcript with Colleen Harkin talking on The Bond Report Sky News Australia from 28 February 2026 has been edited for clarity.