Treasurer Jim Chalmers has urged Australians to look beyond the latest inflation bump, saying underlying inflation remains within the Reserve Bank’s target range and the economy continues to show resilience.
Fresh figures from the Australian Bureau of Statistics showed consumer prices rose 1.3 per cent in the September quarter, pushing annual inflation to 3.2 per cent. The Treasurer acknowledged the increase but said it largely reflected the end of state energy rebates, not a renewed surge in underlying costs.
“Underlying inflation was at the top of the target band in the September quarter,” Chalmers said. “This means underlying inflation has now been between two and three per cent for three consecutive quarters.”
He pointed out that inflation had eased dramatically since Labor came to office. “When we came to office, inflation was high and rising rapidly—now it’s much lower,” he said. “Underlying inflation was almost five per cent when we came to office. It was 3.0 per cent through the year to the September quarter.”
Headline inflation, he added, had halved since the change of government. “When we came to office, headline inflation was 6.1 per cent and climbing—now it’s about half of that.”
The Treasurer said Australia’s inflation profile remained better than most advanced economies, noting that recent data showed price pressures rising again in Europe and the United States. “Inflation has ticked up in the most recent data for every major advanced economy, except the United Kingdom where it was flat but remains much higher than here,” he said.
Economists, however, read the numbers differently. Shane Wright, national economics correspondent for The Age and The Sydney Morning Herald, called it a “big 1.3% jump in headline, 1% in trimmed. Rate cuts off the agenda for the rest of the year.”
Bendigo Bank Chief Economist David Robertson agreed, saying the inflation jump made a Melbourne Cup Day rate cut extremely unlikely. “A Cup Day cut is now at best around a 1 in 12 chance,” he said earlier this week.
Chalmers defended Labor’s cost-of-living policies, arguing that measures such as energy rebates, cheaper childcare, and boosts to rent assistance had cushioned households and helped bring inflation down from its peak. “Our policies have helped to directly reduce inflation when it was at its peak, to allow time for the structural drivers of inflation to settle and for underlying inflation to return to the RBA’s target band,” he said.
He added that the progress on inflation had given the central bank confidence to cut rates three times this year, even as global volatility persisted. “Since Labor was elected, inflation is down, debt is down, real wages are growing, unemployment is low, and interest rates have fallen,” he said.
Despite the positive tone, the Treasurer conceded that households remain under strain. “While we’ve made good progress on the economy together, we recognise the job is far from over because people are still under pressure,” he said.
He said Labor’s next phase of cost-of-living relief would include “tax cuts for every taxpayer, slashing student debt, cheaper medicines and more bulk billing.”
Chalmers linked the fight against inflation to a broader plan for productivity and resilience. “Labor’s economic plan is all about helping with the cost of living at the same time as we modernise Australia’s economy to boost living standards,” he said. “We know the best way to improve living standards is to make our economy more productive and resilient and our budget more sustainable and that’s our focus.”
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