Government and regulatory decisions are driving up Australia’s inflation and making the Reserve Bank of Australia’s (RBA) job significantly more difficult.
As illustrated below by Alex Joiner from IFM Investors, administered prices like essential utilities (e.g., electricity, water, and gas), council rates, public transport fares, etc., rose by 7.55% last calendar year, roughly double the rise in overall CPI inflation:
These administered prices are largely unaffected by changes in monetary policy, meaning that the RBA must squeeze private demand harder to bring overall CPI inflation down.
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