Live: Taylor defends Coalition opposition to Labor spending cuts after rate rise

Opposition Leader Angus Taylor has defended the Coalition's opposition to Labor's attempt to slash the private health rebate for over-65s.

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Prime Minister Anthony Albanese says he doesn't accept his government's policies have lead to yesterday's interest rate rise.

The Reserve Bank hiked interest rates for the fifth time this year to 4.85 per cent. It's the highest cash rate since late 2008.

The central bank's governor Michele Bullock balmed high public and private demand across the country for the rate rise.

The latest Final Budget Outcome showed government spending had grown to 26.9 per cent of gross domestic product.

Albanese says the Reserve Bank's governor has spoken about the international pressures on the budget.

"Regularly she has spoken about international pressures as well as domestic demand. That's something that we don't disagree with," Albanese says.

"I didn't see the press conference but I'm sure that Michelle Bullock would have not acknowledged that oil prices have had an impact."

Anthony Albanese says he advocated for a change to the Australia-UK free trade agreement in relation to backpackers with the UK prime minister.

Currently, the UK free trade deal allows British backpackers to stay in Australia for up to three years without requiring specific work to be undertaken.

The federal government wants to change the rules for those backpackers so that Labor can reduce its net overseas migration number.

The prime minister says he had a "constructive" discussion with UK Prime Minister Andy Burnham about the matter.

"He was very constructive about it and we tasked our officials to do further work," Albanese says.

"There are options that we discussed. We'll discuss it diplomatically. That's how you get things done and it was a positive reception, from from Prime Minister Burnham."

Prime Minister Anthony Albanese has just stepped up for a press conference in Antigua where he is attending the Commonwealth Heads of Government Meeting (CHOGM).

Albanese says discussions have been "really productive" and have been focused on international economy and trade.

He says he had a successful and positive meeting with UK Prime Minister Andy Burnham, where they discussed the progress of AUKUS.

"Prime Minister Burnham is very supportive of it [AUKUS] and we were able to talk about the progress that is being made," Albanese says.

Albanese says he also had meeting with Canadian Prime Minister Mark Carney, where they discussed defence, critical minerals and trade.

Artificial intelligence was also discussed with both leaders, Albanese says. The Ukraine and Middle East wars was discussed with the wider group of CHOGM leaders, he says.

"It has been an opportunity to renew relationships with people, but also to forge new ones as well," he says.

Workplace Relations Minister Amanda Rishworth has been the first cabinet minister up this morning to be grilled about interest rates.

Speaking to Channel Nine, Rishworth says the government's budget is not the primary driver of yesterday's Reserve Bank interest rate rise.

But she says that won't stop the government form trying to make savings.

"Budgets are not the primary driver here. We of course as a government take responsibility to make sure that ... we are having responsible savings and targeted cost of living relief," Rishworth says.

Opposition Leader Angus Taylor has defended the Coalition's opposition to government savings measures following yesterday's interest rate hike.

Yesterday, Reserve Bank Governor Michele Bullock said overall demand public and private demand remained too high across the economy.

Speaking to ABC News Breakfast, Taylor says federal government spending is too high and needs to be cut back to reduce demand.

"One of the things driving demand is going much faster than the overall economy is government spending," Taylor says.

"We've also got an economy that's sclerotic. It's not growing. Enterprise is is giving up the ghost. Small businesses are really struggling."

Asked if the Coalition has any credibility calling for spending cuts when it has opposed savings measures such as the over 65 private health insurance rebate, Taylor says it's overall spending that matters.

"It's aggregate spending that matters ... the overall spending that drives inflation and look, we know this. The IMF is saying that spending is too high."

Hello and welcome to our federal politics live blog. It's great to have you join us here early this Wednesday morning.

I'm Josh Boscaini joining you live from Parliament House in Canberra, here and ready to bring you all of today's federal politics news.

We're expecting to here reaction to the Reserve Bank's decision to hike interest rates to 4.85 per cent — the highest cash rate since late 2008.

The prime minister will be stepping up to speak soon. We'll bring you his press conference here live.

Without further ado, let's get right into the day and see what happens!