The Federal Treasurer blames international volatility for grim inflation figures released today that show the biggest rise in cost of living pressures in more than two decades.
- The prices of goods and services increased by 5.1% in the last year
- The figures add fuel to the debate between the Coalition and Labor on economic management
- Fydenberg says the figures are a reminder of the current “complex and volatile” economic environment.
Prices of goods and services rose 5.1 percent over the past year, well above what many economists had forecast, and well beyond the Reserve Bank of Australia’s preferred inflation range of 3.7 percent. percent.
The figures, released in the midst of the 2022 federal election campaign, add further fuel to the debate between the Coalition and the Labor Party over economic management and planning.
Speaking in Melbourne, Treasurer Josh Frydenberg said the data was a reminder of the current “complex and volatile” economic environment.
“Australia is not immune to international pressures that drive up inflation,” he said.
The COVID pandemic has caused major supply chain disruptions that are causing freight costs to increase in some cases by five times or more.
“The war in Ukraine has seen an increase in fuel prices, gasoline prices and commodity prices that are felt here at home.”
Frydenberg said the main drivers of the inflation numbers were housing, food and transportation costs.
“The largest single increase in fuel prices, up 11 percent in the quarter and up 35 percent for the full year,” he said.
“This is the largest increase in fuel prices since Iraq’s invasion of Kuwait more than 30 years ago in 1990.”
Last month’s budget included a series of temporary measures aimed at easing the cost of living, including cutting fuel taxes in half for six months, one-time cash payments for retirees and additional tax relief for high-income earners. low and medium.
Shadow Treasurer Jim Chalmers said the rising numbers were a “wake-up call” to the federal government about cost-of-living pressures.
“We have said there is a role for cost of living relief in the short term as Australians are being absolutely crushed by [the] skyrocketing cost of living and falling real wages,” said Shadow Treasurer Jim Chalmers.
“It is quite extraordinary that this government, after nearly a decade in office, is completely devoid of any ideas beyond a plan to get through the elections.”
Later on Wednesday, Prime Minister Scott Morrison turned the inflation figures into a political attack, arguing that the Australian economy was doing better than similar countries and that inflation would be worse under Labour.
“I think Australians understand why (the rise in inflation) is happening,” he said.
“But what we’ve shown by keeping [Australia’s] The triple A credit rating, having an inflation rate below countries like Canada and New Zealand, signals that we are a government, the Liberals and the Nationals, that can handle these problems and keep as much downward pressure on those emerging forces as possible. opposed to a Labor Party that doesn’t have an economic plan, that can’t manage the money, and you don’t know it.