Barnaby Joyce has revealed One Nation’s plan to rein in federal government spending would include cuts to public servants through attrition, as well as scrapping duplicate government departments which are currently covered by both the state and federal levels.

The party’s treasury spokesman said the Climate Change Department would go and indicated to 7NEWS that the federal Education and Health Departments could also be axed or absorbed into other departments. 

Barnaby Joyce didn’t reveal any figures or costings around his new plan. 

Know the news with the 7NEWS app: Download today

“There has to be a streamlining of bureaucracy,” Joyce said on Tuesday morning. 

“We can’t have a duplication. You must chose if you want a state department or a federal department, make your choice. As these people retire and move on they aren’t filled again

“There are two issues, the size of our debt and the trajectory of our debt.”

Spending fight in Canberra

Federal Government spending as a proportion of Gross Domestic Product (GDP) is at 26.9 per cent, which is the highest rate in 40 years outside Covid. 

Treasurer, Jim Chalmers, has hinted at a savings package that will be unveiled in the mid-year economic update (MYEFO) which is expected to be handed down in December. 

On Monday the Coalition announced it would cut $31 billion in spending, specifically from net zero agencies, renewable energy schemes and housing programs. 

Be the first to know:

Labor backbencher Julie-Ann Campbell questioned whether the Opposition would go after Medicare, but did acknowledge that the government needed to look at cuts. 

“I think what is clear is that we need to find savings at every opportunity, to throw the kitchen sink at it,” Campbell said. 

“It can’t come at the expense of important cost of living measures that help everyday Australians. 

“What else are the Coalition going to bring the axe down on? Is it going to be healthcare, Medicare?” 

Shadow Treasurer, Tim Wilson, denied the Opposition was looking at cuts to health. 

“That’s not out focus,” Wilson said.

“Our focus is getting the budget into a sustainable position. 

“Higher government expenditure continues to drive up inflation and interest rates. That means Australians are paying more on their mortgages and more for food at the supermarket.” 

Economists and the Reserve Bank say government spending is playing a role in fuelling domestic demand and inflation. Credit: Susie Dodds/AAP

Why it matters 

Economists and the Reserve Bank say government spending is playing a role in fuelling domestic demand and inflation. 

September inflation data will be released on Wednesday October 28.

Trimmed mean inflation is currently sitting at 3.6 per cent, which is higher than the Reserve Bank’s target of under 3 per cent. 

The Reserve Bank Board next meets on Melbourne Cup Day. 

The stock market is pricing the chance of a 25 basis points hike at 62 per cent.