Australian Inflation Hits 32-Year High

On Wednesday, the Australian Bureau of Statistics reported the consumer price index (CPI) rose by 1.8 percent in the three months to Sept. 30 and by 7.3 percent over the last 12 months. It marks the highest annual figure since 1990.

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The cost of buying or building a house rose by 3.7 percent in the September quarter and 20.7 percent over the year. Gas prices increased by 10.9 percent in the quarter, furniture by 6.6 percent and food prices by 3.2 percent. Those rises were slightly offset by a 4.3 percent fall in petrol prices.

The data was released one day after Treasurer Jim Chalmers handed down the federal budget for the financial year 2022-23. The budget projected the inflation would peak at 7.75 percent later this year before falling to 3.5 percent through 2023-24.

Chalmers and Prime Minister Anthony Albanese faced criticism over a looming power crisis. According to the budget, Australian electricity prices are set to increase by 56 percent over the next 18 months and gas prices by 44 percent. 

Albanese blamed the conservative coalition, which governed for nine years before losing May's general election, for failing to prepare for a spike in power prices.

"Cheaper power bills will come as a result of investment in cheaper energy. That will take time, of course. We can't turn it around in one month," he told said.

In his budget speech, Chalmers flagged government intervention in the electricity market to prevent any crisis. He said the government was considering "a whole heap of options."

"We've made it very clear that we would consider a broader range of options than might have been considered in the past," he told Nine Radio.

Peter Dutton, leader of the opposition, criticized the budget for failing to directly address the rising cost of living.

"So, for people on fixed incomes, pensioners, self-funded retirees, they are really, really copping it in this budget and it is a grim budget. I worry for those families who are already struggling with an increased mortgage payment," he told ABC.

"I understand that Australians are under the pump everywhere and, obviously, what we did in the budget providing that cost of living relief but in a responsible way that doesn't push up inflation is really important," Chalmers said.