Inflation rises to 4.3 per cent as spending cuts enter the political debate

Australia's headline inflation rose to 4.3 per cent in the 12 months to September, according to the Australian Bureau of Statistics. In the 12 months to August it had been 4.0 per cent. Headline inflation is the overall rise in what households pay for goods and services, and the bureau's figure is the one most often quoted in debates about the cost of living.

Prices have climbed well beyond the past year. KPMG chief economist Brendan Rynne said consumer prices have risen by a cumulative 30 per cent since the start of the Covid pandemic, according to the Guardian.

The Reserve Bank of Australia, which sets the official interest rate, has a monetary policy decision scheduled for 3 November 2026. For decades it has announced its November decision on Melbourne Cup Day, the public holiday built around the Melbourne horse race. The Guardian reported that a rise to 4.85 per cent on that day would take Australian rates to their highest level in 18 years.

Views on who is to blame are divided. In the Guardian Essential poll, 32 per cent of people nominated government spending as the most responsible for the rising cost of living.

The political response has focused on spending. Opposition leader Angus Taylor has announced plans for more than $30 billion in proposed cuts under a Coalition government. Treasurer Jim Chalmers has said the government's mid-year budget update, due in December, will include spending cuts.

Prime Minister Anthony Albanese said on Thursday that the budget update will not see billions ripped out of health, education and essential services.