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The ABS figure for the December quarter pushes annual figure to 1990 level.
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Fuel, travel and housing drive inflation to 30-year high
25 January 2023
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9 minute read
Inflation rose to 7.8 per cent over the 12 months to the December 2022 quarter – the highest figure since 1990 and 0.5 percentage points above the year to September, the ABS says.
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It said new dwellings (+17.8 per cent), domestic holiday travel and accommodation (+19.8 per cent) and automotive fuel (+13.2 per cent) were the most significant contributors to the annual result.
“The annual increase for the CPI is the highest since 1990,” ABS head of prices statistics Michelle Marquardt said. “Annual inflation for goods such as new dwellings and automotive fuel steadied this quarter, however we saw an uptick in inflation for services such as holidays and restaurant meals."
The annual price increase for services (+5.5 per cent) was also the highest since 2008 although goods (+9.5 per cent) showed little change from last quarter.
The quarterly rise of 1.9 per cent notched up another milestone.
“This is the fourth consecutive quarter to show a rise greater than any seen since the introduction of the GST in 2000,” Ms Marquardt said. “The increase for the quarter was slightly higher than the quarterly movements for the September and June quarters last year (both 1.8 per cent).”
Domestic holiday travel and accommodation (+13.3 per cent), electricity (+8.6 per cent), and international holiday travel and accommodation (+7.6 per cent) were the main drivers.
“The rises seen for domestic and international travel were notably higher than historical December quarter movements,” she said.
“The main factor influencing the rise in electricity prices was the unwinding of the $400 electricity credit offered by the WA government to all households last quarter. This was partially offset by the ongoing impact of the Queensland government's $175 Cost of Living rebate from September 2022, and the introduction of the Tasmanian Government's $119 Winter Bill Buster electricity discount for concession households."
Growth in prices for new dwellings (+1.7 per cent) slowed relative to recent quarters (+3.7 per cent in September and +5.6 per cent in June) but remained stronger than historic norms.
"Labour and material costs are driving price growth in this area, with signs of material cost pressures easing," Ms Marquardt said.
"Slowing demand for new dwelling construction was reflected in a lower quarterly rate of inflation for new dwellings this quarter compared with the past five quarters".
Food prices continued to rise, driven by meals out and takeaway foods (+2.1 per cent) as dining establishments pass through rising costs for inputs including ingredients and labour.
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