Today's consumer price index data release shows that inflation remains well contained. This is significant as the Government continues to work to assist Australians with cost of living pressures.
The Consumer Price Index (CPI) rose 0.4 per cent in the June quarter 2013, following a rise of 0.4 per cent in the March quarter 2013. Headline inflation was 2.4 per cent through the year, in the middle of the RBA's target band, following 2.5 per cent growth through the year to the March quarter.
Underlying inflation was 0.6 per cent in the quarter, following a rise of 0.4 per cent in the March quarter. In through the year terms, underlying inflation in the June quarter was 2.4 per cent, following 2.4 per cent growth in through the year to the March quarter.
Most major categories contributed to headline inflation, primarily driven by a rise in the prices of housing, health services and clothing and footwear. Housing prices rose by 0.6 per cent and health prices rose by 1.9 per cent. Clothing and footwear prices rose by 2.7 per cent in the quarter.
These rises were partially offset by falls in the price of transport, which fell by 0.9 per cent, and recreation and culture, which fell by 0.8 per cent.
The main contributor to the fall in transport prices was a decline in the price of fuel, down by 3.1 per cent.
The Labor Government is committed to easing cost of living pressures for Australian families as the economy transitions away from the mining investment boom.
For example, moving to a floating carbon price one year early in 2014 will lower inflation by 0.5 per cent and cut average household costs by $380 in 2014-15. This will also lower business costs.
As we transition away from the mining investment boom, we have solid growth, contained inflation, record low interest rates, low unemployment and strong public finances as demonstrated by our AAA credit rating.
Only careful management will continue to bring growth, maintain our resilient economy and lower cost of living pressures for families. Crucial to this will be revitalizing productivity growth through a new competitiveness agenda where Government, businesses and unions work together to ensure continued prosperity in a post mining boom economy.
The Rudd Labor Government will continue to pursue a responsible fiscal strategy and will continue to manage the economic transition underway.
24 July 2013