Treasurer Jim Chalmers has mentioned Australia’s inflation is at a “historical” excessive however believes it’s “likely the peak” after it was revealed the Consumer Price Index rose for the fourth consecutive quarter.
The official measure for family inflation has formally risen by 1.9 per cent since September.
While the rise was anticipated, December’s quarterly figures mirrored a year-on-year change of seven.8 per cent – the most important annual leap since 1990.
“This is very high inflation by historical standards,” Mr Chalmers mentioned on Wednesday.
“There’s no use pretending otherwise. It’s unacceptably high.”
Mr Chalmers mentioned Wednesday’s file inflation is prone to be the “peak” however conceded he couldn’t verify whether or not that is undoubtedly the case till numbers are revealed for the present quarter.
The Treasurer additionally warned infllation would stay “higher than we would like for longer than we’d like”, and could be the “defining challenge” within the financial system this 12 months, because it was in 2022.
“We are optimistic about the future of our economy and the future of our country,” he mentioned.
“But we are realistic about the extreme price pressures that Australians are facing right now, the impact of interest rates hikes, and the costs and consequences of a war in Europe and a period of substantial volatility in the global economy as well.”
The most vital will increase in costs had been seen in vacation journey and lodging inside Australia (13.3 per cent), electrical energy (8.6 per cent) and worldwide vacation journey and lodging (7.6 per cent).
Food and non-alcoholic drinks additionally mirrored a year-on-year change of 9.2 per cent.
The Australian Bureau of Statistics’ head of costs statistics Michelle Marquardt mentioned “strong demand” over the Christmas interval contributed to the rising value of journey.
ABS figures additionally mirrored a 2.1 per cent rise in prices for ‘meals out and takeaway food,’ which the company mentioned was evident of eateries passing on “rising costs for inputs including ingredients and labour”.
Ms Marquardt additionally mentioned it was the fourth consecutive quarter to indicate “a rise greater than any seen since the introduction of the Goods and Services Tax (GST) in 2000”.
“The increase for the quarter was slightly higher than the quarterly movements for the September and June quarters last year (both 1.8 per cent),” she mentioned.
Inflation at ‘other side of the peak’
Earlier this week, the Treasurer mentioned that whereas he tipped inflation to peak within the December quarter, cost-of-living challenges would nonetheless stay.
“We’ve still got a big inflation challenge in our economy even as we get to the other side of the peak,” he instructed Sky News on Sunday.
“Inflation will be higher than we’d like for longer than we’d like. That’s just the reality.”
The CPI elevated to 7.3 per cent in November 2020, with the most important annual will increase reported in housing – together with lease and new dwelling purchases (9.6 per cent), meals and non-alcoholic drinks (9.4 per cent), and transport (9 per cent), with the price of gas growing by 16.6 per cent.
Opposition chief, Peter Dutton accused the Treasurer of “spin,” and mentioned he believed this may result in potential stage three tax cuts.
“The treasurer is trying to put all sorts of spin on what will be in the May budget and trying to set Australians up for the tax cuts to be abolished,” he instructed Sky News.
“The fact is that Australians are doing it tough at the moment and it‘s going to get tougher over the next 12 months under Labor.”
