Inflation has risen to 3.8% this year by October, up from 3.6% a month earlier, as Jim Chalmers hinted he may announce additional energy bill subsidies for households in the upcoming mid-year budget.
Electricity prices were 37% higher on the year to October, which the Australian Bureau of Statistics said mostly reflected the end of state government electricity bill rebates.
The ABS released its first “complete” monthly consumer price index, a milestone moment that will finally see more consistent inflation numbers surpass the quarterly figure.
This has confirmed an unwanted increase in price pressures, which has dimmed the Reserve Bank’s expectations of further interest rate cuts, and even raised the possibility of a further move.
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Underlying inflation, which strips out the impact of large, temporary price fluctuations such as electricity prices, rose to 3.3% in the year to October from 3.2% in September.
With the cost of living still the number one issue facing voters, Chalmers said before the latest inflation numbers were released that the government would decide in the “next few weeks” whether to extend the home energy bill rebate beyond the end of this year.
The Treasurer had previously said there would be no major policy announcements in the mid-year budget due around December 17, but in a Sky television interview he opened the door to further electricity subsidies.
On the Coalition using parliamentary question time to corner the government on energy prices, Chalmers said, “We have been very clear and very clear for some time now – this electricity bill relief is really important”.
“It’s taking some of the edge off electricity prices for households and pensioners and people in our communities around Australia.”
He repeated his mantra that energy rebates “will not be a permanent feature of the budget” but left the door open to extending the measures beyond December.
“We will take a decision on this in the next few weeks.”
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The March budget extended the Commonwealth’s Energy Bill Relief Fund for six months, giving all households and about 1 million small businesses another $150, divided into two quarterly installments.
Opposition Leader Sussan Ley repeatedly dodged questions in an interview Wednesday morning about whether the Coalition supports increasing electricity bill subsidies.
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