The economy is a dominant issue in the election. From now until polling day, Independent Australia will outline some key facts on the economy that put the kybosh on many of the myths, lies and distortions being peddled in the election campaign.
This is the first in a series of short articles by leading economist Stephen Koukoulas, which will be published daily up until the Federal Election on Saturday, 3 May 2025.
FACT ONE: INFLATION UNDER LABOR IS BACK UNDER CONTROL
At the time of the May 2022 election, the annual inflation rate was 6.1% (year to the June quarter 2022). In quarterly terms, inflation was 2.1% in the March quarter 2022 and 1.8% in the June quarter 2022. (Source: Australian Bureau of Statistics)
This inflation rate was crippling Australian consumers and business and forced the RBA to embark on an aggressive interest rate hiking cycle.
Inflation has fallen sharply, from a peak of 7.8% in the year to the December quarter 2022, to 2.4% in the year to the December quarter 2024 (latest ABS quarterly data). In quarterly terms, inflation was 0.2% in each of the September and December quarters of 2024, which are annualised increases under 1 per cent.
In reaction to this easing in cost of living pressures, the Reserve Bank has started an interest rate cutting cycle, with a rate cut on 18 February 2025 and, at the time of writing, expectations in financial markets were for interest rates to fall a further 110 basis points to 3.0% (the current official interest rate is 4.1%).
Don't be misled. These are the facts.
Other facts in this series:
- #2: Energy prices are plummeting
- #3: Wage growth on the rise under Labor
- #4: Labor brought down government debt by billions
- #5: Labor building on a better future
- #6: Coalition taxing at a record high, not Labor
- #7: Under Labor, Australia is more productive
- #8: Australia among best in the world at beating inflation
- #9: Australia keeping tax down
- #10: Employment rising under Labor
Stephen Koukoulas is one of Australia’s most respected economists, a past chief economist of Citibank and senior economic advisor to an Australian Prime Minister. You can follow Stephen on Twitter/X @TheKouk.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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