Cost of living proves to be major federal election issue
It’s not just your imagination. Prices for everything from petrol to groceries are going up.
Police & Courts
Don't miss out on the headlines from Police & Courts. Followed categories will be added to My News.
It’s not just your imagination: Prices for everything from petrol to groceries are going up, putting cost of living issues squarely in the frame for this year’s federal election.
However Treasurer Josh Frydenberg said voters needed to put the numbers in perspective, describing the Australian economy as “remarkably resilient.”
“At 1.3 per cent for the quarter and 3.5 per cent through the year, inflation in Australia is half of what it is in the United States and lower than it is in Germany, Canada and the United Kingdom,” said Mr Frydenberg.
“But despite the global supply chain disruptions Australia faces, and indeed so many other countries do around the world, the Australian economy is remarkably resilient.”
Despite this optimism economists warned that consumers may be faced with both higher prices at the checkout and rising interest, pointing to a combination of supply chain disruptions and the flood of money poured into the economy to keep individuals and businesses afloat during the pandemic.
A Commonwealth Bank briefing note released on Tuesday said it expected the “extraordinary fiscal expansion financed by money printing … would generate a material lift in inflation”.
As a result of Tuesday’s numbers, the bank said it expects the Reserve Bank to lift the cash rate in August of this year rather than in November, noting that “the risk lies with an earlier hike in June”.
Pointing to the danger of a wage-price spiral, the bank added that “higher inflation outcomes will feed into higher wages outcomes; there is something of a chicken and egg relationship between inflation and wages outcomes.”
Along in a 6.6 per cent rise in fuel prices, inflation was pushed along by a 4.2 per cent quarterly rise in the cost of new houses thanks to increased construction costs as well as steep price rises for clothing, household furnishings, and recreation.
Labor’s shadow treasurer Jim Chalmers accused the government of letting prices “skyrocket” on their watch “while real wages are going backwards”.
“Australians are working hard, but they aren’t getting ahead” as a result of rising prices and stagnant wages, Mr Chalmers said.
However Mr Frydenberg defended the government’s record, pointing to unemployment figures currently sitting at a 13-year low and tax cuts.
“Since the Coalition has come to Government, 1.7 million people are in work, including one million more women, and we’ve cut taxes for small businesses and for families to help meet some of the pressures that they face,” Mr Frydenberg said.
In the United States, what economists are calling the worst inflation in 40 years is also causing trouble for President Joe Biden and the Democrats, who are expected to suffer catastrophic losses at November’s midterm elections.
At a news conference Monday, Mr Biden called a reporter a “stupid son of a b***h” after he was asked if inflation would be a “liability” for his party.
Central Coast drug runner busted in undercover sting
A Central Coast drug runner who sold large amounts of MDMA and cocaine as part of a criminal network was nabbed after a series of undercover stings by police.
Man charged over 46m smuggled cigarettes in $31m border bust
Detectives have laid charges against a 42-year-old man after uncovering four shipping containers packed with 46 million illicit cigarettes as part of a multi-agency crackdown on organised crime.