Barefoot Investor says now is the time to 'panic' for mortgage holders

The Barefoot Investor has warned that now is the time to 'panic' for Australians with a mortgage over fears interest rates won't come down anytime soon. 

Scott Pape sounded the alarm blaming the Budget for the grim advice he had been forced to deliver to millions of homeowners.

Mr Pape revealed in the lead-up to the Budget that he was avoiding it for the first time in 20 years, describing it as 'poor man's prime-time political theatre'.

He doubled down on his attack following its release on Tuesday, taking aim at one particular cost-of-living relief package. 

The Barefoot Investor, Scott Pape (pictured), has warned Aussies with home loans to 'panic' and be prepared to make tough decisions after the Federal Budget

Treasurer Jim Chalmers announced every Aussie household - regardless of income - would receive a $300 rebate on energy bills from July 1.

Dr Chalmers claimed the payment to roughly 10million homes wouldn't increase inflation, but Mr Pape is wary of the comment.

'I'm sure James Packer is very happy he's getting $300 off his power bill, struggling as he is,' he wrote in a column for the Daily Telegraph.

He added the Federal Treasury's prediction that the payment won't increase inflation was made by 'hundreds of the smartest economic boffins in the land'.  

'The Treasury has 123 years of experience (since 1901) working with the Government analysing the impact of their policies - and they are officially forecasting that inflation will continue to fall,' Mr Pape wrote.

'The problem is that their track record of economic predictions is worse than my boys' aim at the toilet.'

The cash rate is currently at 4.35 per cent while inflation sits at 3.6 per cent in Australia. 

Mr Pape said the best option for homeowners is to 'panic... panic early'.

'Ask yourself what would happen if you lost your job, or you got sick, or interest rates went up,' he wrote.

'In other words, you need to do something that Jimbo hasn't been able to do: make some hard decisions, right now.'

Mr Pape said he was weary of the government's prediction that the budget wouldn't increase inflation, adding that homeowners should 'make some hard decisions, right now' (stock image)

The Barefoot Investor said he had 'low expectations' for the budget, but Federeal Treasurer Jim Chalmers (pictured) 'did the limbo and went lower still'.

Leading economists sung a similar tune to the Barefoot Investor with many saying the rebate and Stage 3 tax cuts would influence more consumer spending.

Increased spending will only stoke inflation and keep inflation rates hate, which in turn could force the economy into a recession. 

Committee for Economic Development of Australia chief economist Cassandra Winzar said cost-of-living relief that's not means-tested risks working against the central bank as the wealthy will simply splurge the extra money. 

'Electricity rebates may alleviate headline inflation but will drive spending elsewhere,' Ms Winzar said.

Economist and budget expert Chris Richardson said the budget was expansionary, with $9.5 billion in new spending in the next 12 months.

'The government said it wouldn't front-load stuff, it would be careful not to poke the inflationary bear, it would put it at the back - they have absolutely got it in the front,' he said.