Today’s release of the Consumer Price Index (CPI) for the December Quarter shows that inflation is slightly above the middle of the Reserve Bank of Australia’s target band.
The CPI rose 0.8 per cent in the December quarter 2013, following a 1.2 per cent rise in the September quarter. Headline inflation was 2.7 per cent through the year, following 2.2 per cent growth through the year to the September quarter.
Underlying inflation was 0.9 per cent in the December quarter - the highest quarterly increase since the June quarter of 2011 - and 2.6 per cent through the year.
The major contributors to December quarter inflation were a seasonal increase in holiday travel and accommodation prices, an increase in fruit and vegetable prices reflecting poor growing conditions in some areas, and a rise in tobacco prices due to excise increases.
Prices also fell for a number of categories in the December quarter. Clothing and footwear prices fell by 1.1 per cent, health prices fell by 0.5 per cent as more consumers reached the pharmaceutical and medical benefits safety net, and transport prices fell by 0.1 per cent because of cheaper fuel.
The inflation rate continues to be impacted by Labor’s Carbon Tax. Since the introduction of this tax in July 2012, electricity prices have increased 22.5 per cent, and gas and other household fuels have increased 19.3 per cent.
Labor Senators should stop standing in the way of cost of living relief for Australian families and vote to repeal the carbon tax when Parliament resumes.
The repeal of the Carbon Tax will create a stronger economy with more jobs and will, on average, save families $550 next financial year.