Treasurer Jim Chalmers has dismissed shadow treasurer Angus Taylor’s critique of government spending, saying the biggest increase was in Defence expenditure and calling on the opposition to declare where it thinks that should be cut back.

Appearing on Sky News in the last hour, Chalmers was asked how he responded to critics who claimed the Reserve Bank was having to delay interest rate reductions because of the Australian government’s spending.

“I think it’s hard to justify the position taken by our critics that the economy is running too hot,” the treasurer said.

“We hear that, from time to time, from Angus Taylor and Peter Dutton and others. There’s nothing … in these figures, which would suggest that.

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“Consumption is flat. Discretionary consumption went backwards again. People are under substantial pressure, and so the investments that we’re making are all about helping people with the cost of living, fighting inflation and making our economy more productive.

“And if you think about public spending in this new data today, and some of the data that we saw yesterday, most of the increase in public final demand is the states, and the biggest part of the Commonwealth contribution is actually in Defence spending.

“So if our critics and opponents think there’s too much spending, and the biggest part of that is Defence spending, let’s hear what Peter Dutton is proposing when it comes to winding that back.”