Inflation falls to the lowest level in almost two years

ABC NEWS (Australia)

Returning to our top story, the rate of inflation halved over the last few months of last year, making it all but certain that the reserve bank will keep interest rates on hold when it meets next week.

Transcript

00:00 Australians are still under pressure, which is why Labor's cost of living tax cut for

00:06 Middle Australia is so important.

00:09 These numbers show we are making more welcome and encouraging progress in the fight against

00:15 inflation, but it's not mission accomplished yet because we know people are still under

00:21 the pump.

00:23 One of the most encouraging elements of these new figures today is the fact that government

00:29 policies are so clearly helping to put downward pressure on inflation.

00:34 So this is more welcome and more encouraging progress, but not mission accomplished because

00:39 people are still under pressure.

00:41 And that's why we want to give a bigger tax cut for Middle Australia from the 1st of July.

00:48 Every Australian taxpayer will get a tax cut, but for 84% of Australians, a bigger tax cut

00:55 to help deal with the cost of living pressures which are still there, despite this really

01:00 welcome and encouraging data that we are receiving today.

01:05 Now as you know, the Consumer Price Index further moderated to 4.1% in the year to the

01:11 December quarter 2023, and that was down from 5.4% in the September quarter.

01:17 The monthly CPI, which bounces around a bit more and can be a bit more volatile, moderated

01:23 further to 3.4% in the 12 months to December 2023, which is down from 4.3% in November.

01:32 Inflation is now at its lowest level in two years.

01:36 Monthly inflation has a three in front of it for the first time since December 2021.

01:42 As I said, the monthly numbers do bounce around a bit, but we're now seeing in the monthly

01:47 figures almost half the 6.1% recorded in May 2022 at the time of the election.

01:55 So inflation has come off really substantially since its peaks in 2022, but we need it to

02:02 moderate further and even faster because we know that people are still under pressure.

02:09 It is worth noting that today's figures are better than the market expected.

02:17 Annual inflation moderated 1.3 percentage points in the December quarter.

02:21 That's the fastest pace of moderation since annual inflation peaked at 7.8% in the December

02:27 quarter of 2022.

02:29 Inflation increased 0.6% in the quarter, less than a third of the quarterly peak reported

02:35 in the March quarter 2022 before the election.

02:39 So these are all of the ways that we know that we're making welcome and encouraging

02:44 progress in this fight against inflation.

02:47 But the reason the tax cuts are so important is because people still need relief from these

02:54 cost of living pressures.

02:55 [BLANK_AUDIO]

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