Inflation has fallen within the Reserve Bank’s target range for the first time since 2021, with Treasurer Jim Chalmers declaring it a sign of responsible economic management under the Albanese Labor Government just days out from the federal election.
The Australian Bureau of Statistics reported on Wednesday that headline inflation came in at 2.4 per cent for the year to March, while the trimmed mean – the Reserve Bank’s preferred underlying measure – dropped to 2.9 per cent. It is the lowest rate of underlying inflation in three years.
“This is a powerful demonstration of the progress that Australians have made together in the economy,” said Mr Chalmers. “Inflation was much higher and rising sharply when we came to office. Now it is lower – much lower – and real wages are growing.”
He credited the easing of inflation to Labor’s policy mix, including targeted cost-of-living support and energy rebates, and contrasted it with what he described as “savage cuts” planned by the Opposition to fund their nuclear energy plans.
Mr Chalmers used the opportunity to make a broader case for Labor’s re-election, highlighting low unemployment, rising wages, and a rebounding economy. “Under Labor, inflation is low, real wages are growing, unemployment is low, we’ve got the debt down, and interest rates have started to come down as well,” he said.
Coalition costings under fire:
The Treasurer sharpened his attacks on the Opposition’s economic credibility, accusing them of delaying the release of their election costings to hide deep budget cuts.
“We don’t want to see another costings con job from the Coalition under Peter Dutton and Angus Taylor,” he said. “They know – and we know – that the only way they can pay for their nuclear reactors is to come after Medicare, health, and education.”
Labor released its own costings earlier this week, revealing $10 billion in new commitments with $7.2 billion in offsetting savings. Mr Chalmers claimed this demonstrated a “more responsible position” than when the campaign began.
He also warned that the Coalition’s costings may include “dodgy assumptions around productivity” and urged scrutiny of their pledges on tax deductibility and fuel excise.
Interest rate expectations and market impact:
When questioned on the slight upward surprise in quarterly inflation, Mr Chalmers noted that the figure still outperformed recent budget forecasts. He attributed the temporary bump to the phasing out of energy rebates in Queensland and Western Australia.
While refusing to speculate on future Reserve Bank decisions, he acknowledged that markets are currently pricing in multiple interest rate cuts by year’s end.
“If that eventuated, that would deliver hundreds of dollars every month to Australians with a mortgage,” he said.
Energy transition debate reignites
Responding to criticism from former ANSTO CEO Adi Paterson and others, who signed an open letter arguing the shift to renewables could cost $9 trillion, Mr Chalmers defended the government’s energy plan.
He reiterated that renewable energy remains the cheapest form of new power generation and pointed to OECD data showing Australia had the lowest energy inflation in the developed world.
“We are helping with bills at the front end through rebates and adding cheaper, cleaner, more reliable energy to the grid,” he said.
Competition and corporate conduct:
The Treasurer also addressed questions about expanding regulatory oversight to companies like Bunnings, following recent reforms targeting supermarket pricing practices.
He said supermarkets remain the government’s primary focus but noted that the ACCC has been given extra funding and power to recommend a broader approach to tackling market power.
“I’m aware that people have raised concerns about Bunnings, particularly when it comes to the nursery part of the business,” he said. “Our primary focus is supermarkets, but we’ve given the ACCC the resources that they need.”
Push for transparency in opposition costings:
Mr Chalmers supported the idea of greater transparency in opposition costings, arguing that voters should be able to see the assumptions behind Parliamentary Budget Office figures.
He criticised the Coalition’s refusal to release full costings ahead of the election, calling it “sneaky” and dangerous for essential services.
“They want to skate through all the way to the election without coming clean,” he said. “When Peter Dutton cuts, Australians will pay – and at the worst possible time.”
As the election approaches, Labor is campaigning on a platform of economic stability and fiscal responsibility, while portraying the Coalition as lacking transparency and risking cuts to vital services.
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