Prices lift as power credit ends

Perth consumer prices rose 1.4 per cent in the March quarter as electricity bill relief was used up by households and petrol prices jumped.

The big rise followed a fall of 1 per cent in the December quarter, largely driven by the state government’s $600 electricity bill credit, according to Australian Bureau of Statistics data.

Automotive fuel prices were up 9.6 per cent in Perth for the quarter, the bureau said.

All up, prices are now 1 per cent higher in Perth than March last year, meaning inflation continued despite the COVID-19 recession.

Perth’s price rise in March was the second highest of all capital cities.

Nationally, the consumer price index was up 0.6 per cent in March, for a 12 month total of 1.1 per cent.

Inflation in the past three quarters was 1.6 per cent in September, 0.9 per cent in December, and then 0.6 per cent in March.

Commsec chief economist Craig James said the March increase was below consensus forecasts.

He said inflation would be a watching brief, for now.

“While the annual headline rate of inflation continues to lift, it is from significant lows,” Mr James said.

“The Reserve Bank [of Australia] has anticipated the lift in prices, but it has fallen short of even its forecasts. 

“The economy is growing at a faster rate, and that translates to higher prices. 

“The lift in prices caused by higher raw material prices and consumer demand won’t be sustained, however, unless there is also a lift in wage pressures. 

“And that depends on a tighter job market, leading to higher labour costs, and, in turn, a generalised lift in consumer prices across the economy.

“There is still spare capacity in the job market, so there is no sign as yet of generalised wage pressures. 

“Higher wages are more confined to certain regions and industries, notably in the home building trades. 

“The Reserve Bank doesn’t expect generalised wage pressures to emerge until the jobless rate is closer to 4 per cent – clearly still some way off.”