The latest data from the Australian Bureau of Statistics has presented negative news for the government, despite previous efforts to bring down inflation.
The Consumer Price Index (CPI) rose to 2.3 percent in the 12 months to November 2024, showing the ongoing inflationary pressures in Australia.
Food, Alcohol, and Recreation Costs Up
The CPI is a key measure of inflation, tracking changes in the prices of goods and services typically consumed by households.As per the data released on Jan. 8, the CPI rise was primarily driven by increases in food and non-alcoholic beverages (2.9 percent), alcohol and tobacco (6.7 percent), and recreation and culture (3.2 percent).
However, these were offset by declines in electricity prices due to government rebates, which fell 21.5 percent annually, and automotive fuel, down 10.2 percent.
Electricity prices were significantly impacted by the Energy Bill Relief Fund (EBRF) rebates introduced in mid-2023 and expanded in 2024. These taxpayer-funded rebates have reduced electricity costs for households by 14.6 percent since June 2023.
Without these rebates, its estimated electricity prices would have risen by 16.9 percent.
Automotive fuel prices also eased household budgets, driven by lower global oil demand. However, a 0.9 percent increase in fuel prices in November—the first rise in five months—suggests potential upward pressure in the future.
Sector-specific trends reveal a diverse impact on household budgets.
Food and non-alcoholic beverage prices rose by 2.9 percent annually, the lowest increase since January 2022.
Housing and Travel Costs Add to Inflation Woes
Rental prices increased by 6.6 percent annually, reflecting low vacancy rates and tight housing markets in major cities.Although Commonwealth Rent Assistance temporarily reduced rents in October, prices resumed their upward trend in November.
Holiday travel and accommodation prices rose by 3.8 percent over the year, though international airfares saw declines in November due to off-peak travel periods in Europe and North America.
New dwelling prices, which include new builds and major renovations, increased by 2.8 percent, marking the weakest annual growth since July 2021.
Chalmers Highlights Inflation Progress
Reacting to the latest inflation data, Treasurer Jim Chalmers emphasised the significant progress made in tackling inflation since the current government took office.“When we came to office, inflation had a six in front of it, and it was rising. Now, inflation has a two in front of it, and that is a demonstration of that progress,” he said.
He further noted that headline inflation has now decreased to around a third of what it was when the government inherited it from the previous administration, and it has nearly halved in the past year.
Chalmers acknowledged that inflation doesn’t always follow a steady downward path, citing recent data from Europe and the United States where inflation had risen.
He pointed out that monthly data doesn’t always compare the same basket of goods and services, making some fluctuations more volatile.
Meanwhile, Shadow Treasurer Angus Taylor, who has been critical of the inflation figures, stated earlier that under the Albanese Labor government’s economic plan, Australians will not see a recovery in their standard of living until at least 2030—another two terms.
“No amount of spin or unfounded optimism from the treasurer will restore the financial losses hardworking households have incurred under Labor,” he said.
