- Inflation rose 3.5 percent in the year to July
- Moderation followed $300 rebates on energy bill
Australia’s inflation rate has fallen, but the moderation is likely to be short-lived because it relies on taxpayer-funded electricity bill relief.
The consumer price index for July fell to 3.5 percent, down from 3.8 percent in June.
The Australian Bureau of Statistics said annual energy rebates of $300, which came into effect on July 1, were the cause of the sharp fall in headline inflation.
“The extended and expanded Commonwealth Energy Bill Relief Fund rebate, and the introduction of state government rebates, have begun to take effect from July 2024,” it said.
‘These discounts have the effect of reducing electricity costs for households.’
Monthly inflation data for July showed a 5.1 percent drop in electricity costs over the year, marking a dramatic turnaround from a long string of double-digit annual increases.
Treasurer Jim Chalmers announced $300 rebates in four quarterly instalments of $75 in the May Budget.
Australia’s inflation rate has fallen, but the moderation is likely to be short-lived
The Labor Party went into the 2022 federal election promising to cut electricity bills by an average of $275 a year.
The Queensland Labor government has gone further, announcing annual discounts of $1,000 on electricity bills as the party battles to win a fourth consecutive term in office in October.