The latest ABS data shows inflation rose by 7.8 per cent in 2022.
This is broadly in line with the Treasury’s October Budget forecast of inflation peaking at 7.75 per cent in the December quarter, and the RBA’s forecast peak of eight per cent in the December quarter.
While inflation is unacceptably high, there are some signs that inflation is likely to have peaked, but we won’t know this for sure until data for the March quarter comes in.
Among the main drivers of price increases in the last quarter were domestic holiday travel and accommodation, electricity, and housing.
These figures demonstrate the pressure on the budgets of Australian families brought about by the war in Ukraine, lingering pressures on global supply chains, and other challenges ignored for too long.
We understand that these inflationary pressures are coming at people from around the world, but they are being felt around the kitchen table.
Inflation is the primary challenge in our economy right now, which is why we’ve seen the eight consecutive rate rises since before the election from the independent Reserve Bank.
While further monthly data and the figures from the March quarter will tell us more, we do expect inflation to moderate over the course of this year.
There have already been a number of price pressures which have started to ease – including shipping costs and housing costs – which are welcome – but even so, price pressures will still remain higher than we'd like, for longer than we'd like.
Our economic plan will continue to focus on the inflation challenge, as well as growing the economy the right way in 2023.
While it will take some time for the full effects to flow through, the Government’s energy relief package is beginning to take some of the edge off increasing energy prices.
We are also working to address the previous government’s failure to address supply side issues which are compounding the inflation challenge.
We’re getting wages moving again in responsible ways, including supporting wage rises for workers on minimum and award wages and for aged care workers, and by fixing the broken bargaining system.
We are providing cost‑of‑living relief for electricity bills, child care and medicines.
And we are delivering on our commitments to boost the capacity of the economy – with meaningful investments in cleaner and cheaper energy, the digital economy and manufacturing.
We understand Australians are doing it tough. That’s why we will keep working hard to provide responsible cost‑of‑living relief, deliver the essential services people rely on, and build a stronger and more resilient economy for the future.