Underlying inflation is at its lowest in three years according to new figures released by the Australian Bureau of Statistics today.
Headline inflation is now in the mid‑twos and underlying inflation is in the low threes.
This means headline inflation has fallen to an almost four‑year low and now sits in the middle of the RBA's target band.
This result is better than expected and better than forecast.
It's not mission accomplished, but it means we've made much more progress.
Inflation was higher and rising under the Liberals, but it's lower and falling under Labor.
On every measure we've made substantial and sustained progress in the fight against inflation.
Inflation is now almost a third of the 6.1 per cent we inherited when we came to office.
On a six‑month annualised basis, underlying inflation is around a third of its peak at 2.7 per cent and is within the RBA's target band for the first time since 2021.
Trimmed mean inflation was 3.2 per cent through the year to the December quarter, down from 3.6 per cent.
Trimmed mean inflation almost halved in the quarter, at 0.5 per cent and is a third of what it was at the time of the election.
Annual trimmed mean inflation in the monthly indicator is also within the RBA's target band for the first time in three years, at 2.7 per cent in the year to December.
Headline inflation was 0.2 per cent in the December quarter, to be 2.4 per cent higher through the year, around a quarter of its peak.
Australia's headline inflation is now lower than most major advanced economies including the United States, United Kingdom and Germany.
Annual non‑tradable inflation was 3.1 per cent through the year to the December quarter 2024, down from 4.1 per cent through the year to the September quarter.
While monthly headline inflation ticked up slightly, it remained in the band for the fifth consecutive month.
The moderation in today's figures of categories including building construction costs, rents and insurance is an encouraging sign that inflation is falling more quickly than anticipated in MYEFO.
The moderation in inflation that we've seen so far would not have been possible without our responsible economic management including the $200 billion turnaround in the budget we've delivered.
ABS data shows our cost‑of‑living policies took around three quarters of a percentage point off inflation.
In the year to the December quarter 2024, electricity prices fell 25.2 per cent and would have fallen 1.6 per cent without the energy rebates we're rolling out with the states.
In the year to the December quarter 2024, rents rose 6.4 per cent - without the largest increase to Rent Assistance in 30 years, they would have risen 7.8 per cent.
Inflation is down, wages are up, unemployment is low and we've seen 1.1 million jobs created for Australian workers under Anthony Albanese and Labor.
The soft landing we have been planning and preparing for is looking more and more likely.
Many countries around the world have paid for progress on inflation through higher unemployment or lower economic growth, but we've been able to preserve the gains we've made in our labour market at the same time as we've got inflation down.
Cost of living pressures haven't disappeared but they are easing.
The worst of the inflation challenge is well and truly behind us.
We are confident but not complacent about the year ahead.
Australians would be thousands of dollars worse off if Peter Dutton had his way on tax cuts, wages and energy bill relief - and worse off still if he wins the election.
The biggest risk to the progress we have made together would be a Coalition government that would come after Medicare again, push wages down again, and push electricity prices up.
We're fighting inflation, helping with the cost of living and building Australia's future, and today's figures show our policies are making a meaningful difference.
