According to the Reserve Bank of Australia, Labor’s energy plan is currently helping to moderate Australian inflation. Source: Wittman Tours
According to a media release by the Albanese Government’s Treasurer, Jim Chalmers, the independent Reserve Bank of Australia (RBA) has confirmed that the federal government’s energy plan is helping to moderate Australian inflation.
“Over this year and next, increases in wholesale costs are expected to be dampened by the Australian Government’s Energy Price Relief Plan,” said the Reserve Bank in this month’s Statement on Monetary Policy.
Chalmers noted Labor’s three-part plan for Australian inflation:
- Providing responsible cost‑of‑living relief
- Tackling the supply chain and capacity challenges that were left to us
- Delivering a responsible Budget with spending restraint
“Inflation is still unacceptably high, and it will stay higher than we want it to for longer than we want it to,” says Chalmers.
“The fact that the RBA confirms today our energy package is working makes it even more disappointing that the Opposition voted against it.”
Opposition leader, Peter Dutton was critical when Labor passed an energy bill late last year to cap gas at $12/gigajoule for 12 months.
He warned that it will lead to “bills blowout and blackouts”.
“It’s clear that if you restrict supply into a market…the prices are going to go up if demand remains constant. [Labor] don’t know what they’re doing.
“It’s going to result in a bills blowout and blackouts over the next couple of years…(which is) going to be a disaster for small businesses and for families.
“We suggested at the time and stand by this policy, that you need to introduce more supply into the system because if you do that, you bring gas prices down.”
While the RBA’s current assessment disagrees with what Dutton had, it’s yet to be seen if Labor’s plan will continue to help moderate inflation, or if Dutton’s theory will become realised.
Chalmers noted that “inflation is still unacceptably high” and will continue to be for a longer period.
However, the RBA believes that price pressures have likely begun to moderate.
The RBA believes that Australian inflation “is likely to have peaked around the end of 2022 and is forecast to return to the target range over coming years.”
“We understand Australians are doing it tough. That’s why the Albanese Government will keep its focus on delivering responsible cost‑of‑living relief and dealing with the inflation challenge in our economy,” says Chalmers.
Treasure Chalmers’ full media release can be read here.
The RBA’s Statement on Monetary Policy can be found here.
