The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

24 April 2013

Consumer Price Index - March Quarter 2013

Today's data shows that consumer price inflation remains very well contained, with headline inflation sitting squarely in the middle of the RBA's inflation target.

The Consumer Price Index (CPI) rose 0.4 per cent in the March quarter 2013, following a rise of 0.2 per cent in the December quarter 2012. Headline inflation was 2.5 per cent through the year, up from 2.2 per cent through the year to the December quarter.

Underlying inflation was 0.4 per cent in the quarter, following a rise of 0.6 per cent in the December quarter. In through-the-year terms, underlying inflation in the March quarter was 2.4 per cent, unchanged from the December quarter. This is the fourth-lowest outcome in through-the-year terms for the past 10 years. It is also well below the 10-year average of 3.0 per cent.

The main contributor to headline inflation in the March quarter was a rise in housing prices, in addition to seasonal price increases in health and education. Housing contributed 0.3 percentage points to inflation, largely reflecting an increase in house purchase prices. Health prices contributed 0.2 percentage points to inflation, largely reflecting the seasonal price increase in pharmaceuticals under the Pharmaceutical Benefits Scheme. Education prices also contributed 0.2 percentage points to the quarterly outcome, reflecting seasonal price rises associated with the commencement of the new school year.

These rises were partially offset by falls in the price of a number of items, particularly tradeables, with the sustained high dollar continuing to put downward pressure on a broad range of prices. In the March quarter, prices fell in several categories including clothing and footwear, fruit and vegetables, and household furniture and equipment.

Today's data is another big tick on Australia's economic scorecard, with contained inflation accompanying solid growth, low unemployment, strong public finances and low interest rates. It not only highlights Australia's strong economic fundamentals, but also the modest impact of the carbon price on consumer prices.

Australia also has the AAA credit rating from all three credit rating agencies – something never achieved in eleven years by the Liberal Party when they were in government.

While the unusual combination of the sustained high dollar and the lower terms of trade has put pressure on some Australian industries and weighed heavily on government revenues, Australia's economy remains one of the most resilient in the developed world.

The Government remains focused on supporting jobs and growth while making room for the smart investments our country needs, consistent with our medium term fiscal strategy of delivering surpluses on average, over the cycle.