TRANSCRIPT
A sign of some potential relief for homeowners after three years of the interest rate squeeze, raising the Prime Minister’s chances of entering an election with the most potent campaign weapon.
"It is welcome news, it is indicative of the hard work the government has done when it comes to responsible economic management."
Underlying inflation for the year has landed at 3.2 per cent, lower than market expectations.
Treasurer Jim Chalmers says it's good news.
"The fight against inflation is not yet over but these are incredibly encouraging signs that we are getting on top of this challenge in our economy."
He says now it’s the RBA's move.
"I am not going to make any sort of commentary that can be confused with giving free advice to the independent Reserve Bank or making predictions."
Interest rates began to creep up during the last federal election campaign.
In 2022, then-treasurer Josh Frydenberg remained hopeful.
"So I have great confidence in the state of the Australian economy right but but also in the ability of Australian households to deal with the challenges they face."
That was during the first of what has ended up as 13 rate hikes as the Central Bank moved to tame price spikes.
Underlying inflation peaked at 6.8 per cent and has stayed above the target band since then.
Economists, like Cherelle Murphy from E-Y Oceania, are now pricing in up to a 90 per cent chance of a rate cut next month.
"It certainly opens the door to a rate cut that might not have been there before, the only caveat I would put on that is that inflation number is not the only number the Reserve Bank looks at."
While the Treasurer paints a positive picture...
"Inflation is down, wages are up, unemployment is low and 1.1 million jobs have been created."
Opposition finance spokesperson, Jane Hume, says not everyone is feeling the effects of those figures.
"If you are feeling poorer its not in your heads. You are in fact poorer. You are poorer than you were three years ago."
In Sydney's west, the Adday family say the new school year is adding stress to an already tight budget.
"As for the bills, they are very high, the water bill, the internet, and the rent. If the family does not pull together, it cannot live."
Counting the cost of rent, bills and groceries, Mr Adday has this assesment of the government.
"Despite the government’s attempts, it is not enough because the citizen has not seen this on the ground."
They're among the millions struggling to afford rising costs.
Ms Murphy says while costs have driven down in some areas, rent and insurance inflation remains much higher.
"Yes they are getting relief on some things but certainly not everything and across the board people are still really feeling that pain."
An election is due to be called within months.
Economists say they're increasingly concerned that any rate relief could be shortlived as the parties spend big to win votes.
