It is possible for inflation to fall too low. It has - Swan
So low has Australia’s rate of inflation fallen that the Treasurer is worried and the Reserve Bank is rethinking the economic outlook.
inflation
Australia’s March Inflation – Down Down, Prices are Down…..
The CPI figures for the March quarter were released today by the ABS, showing a next to nothing change of 0.1% in seasonally adjusted terms (0.4% in the original data, if you like that sort of thing). This means in annual terms the rise was 2.5% or smack bang right in the middle of the RBA’s 2-3% band.
OK First the long term view:
CPI - gas and electricity
CPI Charts: Electricity at 15 per cent for the quarter
The shock result was that electricity prices increased by 15 per cent for the September quarter. Fruit and vegetables increased at 10 per cent over the quarter.
The cost of bracket creep
Each year the government increases income tax rates, and most people don’t notice. They do this through “bracket creep” where workers are moved into higher tax brackets due to inflation.