Treasurer warns inflation could go higher from here
Labor treasurer Jim Chalmers (pictured) has put the blame for today’s chunky inflation print squarely at the feet of the ongoing US-Israel-Iran war.
Discussing the 4.7% annual inflation uplift in a Brisbane press conference, Chalmers said: “These numbers show that Australians are paying a hefty price for war in the Middle East. These are the costs and consequences of a major conflict on the other side of the world.”
Transport costs soared by 8.9% in March, reflecting higher oil prices as the Strait of Hormuz blockade slashed global oil supply by a fifth.
Brent Crude futures, the benchmark for global oil prices, remained above US$100 per barrel throughout March. Although prices eased in April amid hopes for peace talks between the warring nations, they have since climbed back above US$110 per barrel at the time of writing.
Chalmers warned of more pain to come, saying: “The tick up in the monthly headline data today was driven by the conflict, and this war could drive inflation up even higher before it comes back down again.
He said treasury’s expectation is that inflation is likely to peak higher, but analysts “are still finalising their forecasts ahead of the budget next month”.
Chalmers took the chance to tout Labor’s actions in reducing fuel costs: “For the next couple of months, our fuel excise cut has been a very important factor, taking some of the sting out of fuel prices, and that’s reflected in the movement in fuel prices. We’ve seen petrol and diesel prices fall by at least 70 cents (per litre) in most capital cities, and this shows how important that fuel excise relief is.”
Chalmers said “an enduring end to this war in the Middle East can’t come soon enough”.
