New figures from the Australian Bureau of Statistics show inflation was steady in January but higher than we’d like and for longer than we’d like.
We expected there to be upward pressure on today’s figures, in part because this is the first data to take into account the end of the Commonwealth’s energy rebates.
Ending those energy rebates was a difficult decision, and we know the impact it is having on families and on this data.
We can expect these sorts of numbers to continue, particularly in the first half of this year.
Headline inflation was steady at 3.8 per cent through the year to January 2026.
Underlying inflation was 3.4 per cent through the year to January 2026, up from 3.3 per cent in December.
The tick up in inflation in recent months also reflects the strong private sector recovery we saw in the second half of last year, as the private economy reclaimed its rightful and necessary role as the primary driver of growth.
While it’s true that inflation is higher than we would like for longer than we would like, it’s also true that it remains substantially lower than its peak in 2022 and much lower than what we inherited then.
We’ve seen around the world that inflation can tick up before it ticks back down, we saw this in the United States and the United Kingdom last year.
When we came to office, headline inflation was 6.2 per cent and rapidly rising, it’s now much lower than that.
Underlying inflation was around five per cent but it is now much lower.
Under Labor, economic growth has picked up, business investment is strengthening, more than 1.2 million jobs have been created, unemployment is low, and participation is at near record highs, but we know there are big challenges too.
We are continuing to roll out cost of living relief for families, including another tax cut this year and next year, cheaper medicines, more bulk billing, cutting student debt, and guaranteeing three days of early childhood education and care.
These new numbers are another important reminder that the coming Budget will have the right focus on inflation and productivity against a backdrop of global uncertainty.