Inflation is expected to fall to its lowest levels since the third wave of COVID-19 swept through the country but Australians struggling with cost-of-living pressures have been hit by a surge in state and federal government taxes.
The bureau noted the increase was driven by a 15 per cent, or $36.2 billion, jump in personal tax collections, caused by both a rise in the total number of Australians in work and increased wages growth. Company tax receipts, up 21 per cent over the same period, were pushed up by higher prices for key commodities.
The RBA, which aims to hold inflation between 2 and 3 per cent, will be closely watching Wednesday’s quarterly inflation report covering the first three months of the year.Analysts are expecting the annual inflation rate to slip to a 2½-year low of about 3.5 per cent. The last time it was that low the first signs of Australia’s inflation problems were emerging as the Delta variant of COVID swept through the country.
“Inflation has been moderating, unemployment still at 3.8 per cent, which is very much a historic low. We have economic growth, we’ve got wages growing. There’s nowhere you’d rather be than Australia at the moment.”The Reserve Bank and some economists have worried that the recent rise in wages will add to inflation pressures. Inflation at 3.5 per cent would mean real wages growing at their fastest rate in more than three years.
Source: Financial Digest (financialdigest.net)
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