"The acceleration in CPI over the first quarter of 2024 is a clear sign that Australia's inflationary pressures are far from over," Innes Willox, Chief Executive of the national employer association Ai Group said.
"Many advanced economies around the world are facing difficulties taming the 'last mile' of inflation, and Australia is no exception. But inflation appears especially challenging in Australia, with the high 1.0% quarterly growth in trimmed mean inflation showing that price increases are very broad-based.
"While much of our inflation had previously been imported, it is now squarely home grown, with prices for services and non-tradables proving especially sticky. Business is still seeing significant inflationary pressures through their supply chains.
"The probability of rate cuts by the RBA later this year has grown less likely. This will further compound cost-of-living pressures on households and businesses, who now face both longer inflation and a potentially longer wait for interest rate relief. This will add to the volatility that industry is now grappling with.
"Home-grown inflation points to the need for continued restraint to be exercised by business, governments and employees in price setting and wage negotiations.
"Excessive demands for wage increases – such as the ACTU's reckless claim for a 5% increase in minimum and award wages – will, if granted, clearly further prolong inflation and cost-of-living pressures. The ACTU wage claim needs to be rejected in favour of a more moderate and realistic outcome," Mr Willox said.
