Australian households are facing renewed financial pressure as the latest inflation figures show an unexpected increase, with Treasurer Jim Chalmers now signalling potential further electricity bill relief in the upcoming mid-year budget.
Inflation Figures Show Worrying Uptick
The Australian Bureau of Statistics revealed that inflation climbed to 3.8% in the year to October, up from 3.6% the previous month. This marks an unwelcome reversal in the fight against rising prices and has dampened hopes for imminent interest rate cuts from the Reserve Bank.
Even more concerning for economists is the rise in underlying inflation, which strips out volatile items like energy prices. This core measure increased from 3.2% in September to 3.3% in October, indicating broader price pressures within the economy.
Energy Prices Drive Cost of Living Crisis
The data highlighted electricity prices as a major contributor to the inflation increase, with power bills soaring by 37% over the past year. The ABS attributed this dramatic rise largely to the expiration of state government energy rebates that had previously provided relief to households.
With cost of living remaining the dominant issue for Australian voters, Treasurer Jim Chalmers acknowledged the government is actively considering its response. Speaking before the inflation numbers were released, Chalmers stated that a decision on extending household energy bill rebates beyond the end of this year would be made "in the next few weeks".
Government Considers Further Support Measures
The Treasurer's comments represent a shift in position, having previously stated there would be no major policy announcements in the mid-year budget expected around 17 December. During a Sky television interview, Chalmers defended the existing electricity bill relief, stating it has been "really important" in "taking some of the edge off power prices for families and pensioners."
However, he emphasised that such support measures "won't be a permanent feature of the budget" while leaving the door open to a temporary extension. The current energy bill relief fund, established in the March budget, provides $150 to all households and approximately one million small businesses, delivered in two quarterly instalments over six months.
Meanwhile, the opposition has faced scrutiny over its position, with Deputy Leader Sussan Ley repeatedly avoiding questions about whether the Coalition supports extending the power bill subsidies. The political debate occurs against a backdrop of rising economic uncertainty, with some analysts even suggesting the next move in interest rates could be upward rather than the cuts many households were anticipating.
