The federal budget on Tuesday revealed government spending will climb to $829.6 billion in 2026/27, billions more than forecast in December's mid-year update.
Economists warned adding to public demand at a time when the Iran war was constraining supply and consumer prices were growing at 4.6 per cent per year would fuel inflation.
"Overall, the budget is unlikely to shift the RBA's near-term view on interest rates, but it does little to help in the fight against inflation," Commonwealth Bank economists said in a research note.
"We retain our view that the RBA will remain on hold for the rest of this year, with clear risks sitting to the upside."
AMP's Shane Oliver said the budget was a step in the right direction, given windfall revenues would be saved and net budget savings would be made over the next four years.
But he also believes it won't make the job for the RBA and its governor Michele Bullock easier, leaving his base case for one more interest rate hike in August untouched.
National Australia Bank chief economist Sally Auld noted the government's forecasts for slower growth, and inflation and unemployment moving higher, are broadly in line with the RBA's.
A large reason for the $18 billion extra spend was automatically higher payments for programs such as the aged pension which rise in line with inflation, the treasurer said.
"If you compare the magnitude of savings that are in the budget, that is a historically responsible document and that's because we've taken the inflation challenges in our economy very seriously," Dr Chalmers told the National Press Club on Wednesday.
Claims of fiscal responsibility are undermined by an extra $114 billion in off-budget spending in the five years to 2029/30, including $17.5 billion in loans for renewable energy and transmission projects.
Although the cumulative underlying deficit during that period will narrow by $45 billion compared to the December forecast to $150 billion, the cumulative headline deficit is projected to hit $265 billion.
Meanwhile, public non-financial corporations, such as Snowy Hydro and NBN Co, were projected to run a deficit of $10.2 billion in 2025/26, $3.4 billion higher than forecast in December, which was also adding to public demand, independent economist Saul Eslake said.
"I don't think the budget has done anything in the near term to reduce the risk of further increases in interest rates," he told AAP.
Treasury forecast the impact of the budget's tax package, which hiked taxes on income derived from assets and cut taxes for workers and businesses, will be revenue neutral over the four-year budget period and not add to inflation.
But the Working Australian Tax Offset, which will hand back about $5 a week in tax to wage and salary earners from mid-2027, will be wiped out by inflation fuelled by government spending, shadow treasurer Tim Wilson said.
"Their economic model is to stoke inflation, tax inflation, then spend the inflation and keep it on a constant cycle which is driving bracket creep," he told 2GB.
Winding back negative gearing and the 50 per cent capital gains tax discount is forecast to cause property prices to grow about two per cent slower than they otherwise would have in the next few years, shaving $19,000 off a median home, according to Treasury.
By reducing investor demand, the tax package is expected to boost home ownership by about 75,000 over the next decade.
But it will also reduce supply by about 35,000 homes over the same period, which would push up rents by about $2 a week, Treasury analysis shows.
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