Australian Federal Election 2022: inflation and cost of living a live issue 23 days out from polling day

Australia recorded its largest quarterly & annual inflation increase in 21 years in the first Quarter of 2022.

The Cost of Living Index (CPI) rose 2.1 per cent cent in March 2022 quarter and 5.1 per cent annually - again largest annual change in 21 years. 

That 5.1 per cent exceeds the 2021 annual rate of 3.5 per cent, as well as the overly optimistic projected inflation figure of 4.5 to 4.6 per cent floated by some economists for the March quarter.

Australian Bureau of Statistics, media release, 27 April 2022, excepts:

The most significant contributors to the rise in the March quarter CPI were new dwellings (+5.7 per cent), automotive fuel (+11.0 per cent) and tertiary education (+6.3 per cent)…..

Notable rises were also recorded across the food group (+2.8 per cent), reflecting high transport, fertiliser, packaging and ingredient costs, as well as COVID-related disruptions and herd restocking due to favourable weather. Main contributors to the rise in food prices included vegetables (+6.6 per cent), waters, soft drinks and juices (+5.6 per cent), fruit (+4.9 per cent) and beef (+7.6 per cent)…..

The grocery component of the group, which excludes meals out and takeaway foods, rose 4.0 per cent in the March quarter." Ms Marquardt said.

Prices for other grocery items, such as non-durable household products (+6.7 per cent), which includes products such as toilet paper and paper towels, also rose in the March quarter….

The price of goods (+6.6 per cent) rose more strongly through the year than that of services (+3.0 per cent)…..

It appears that cost of living increase is now running significantly ahead of wages growth in Australia.

Prime Minister Scott Morrison's one-off election campaign bribe of $250 for eligible Centrelink/DVA recipients won't even touch the edges of the yawning gap which has developed between income and costs due to the broad base of rising prices. In fact the positive impact of this so-called Cost of Living Payment is unlikely to last beyond polling day in many low-income family households.