Electricity Bills Shock Australian Consumers as CPI Jumps 0.9%
Why are your utility bills suddenly so much higher? Australian inflation has surged sharply in the first quarter of 2025, with electricity costs skyrocketing after government rebates dry up for many households.
The Consumer Price Index (CPI) jumped 0.9% in the March quarter after two consecutive quarters of minimal 0.2% increases, according to Australian Bureau of Statistics (ABS) data released today. Annual inflation remained steady at 2.4%.
Key Takeaways:
Electricity prices soared 16.3%, primarily driven by Brisbane households using up their $1,000 Queensland Government rebates
Education costs increased 5.2% with the start of the school year, with secondary education rising 6.4%
Food prices, particularly fruits and vegetables, rose 2.8% due to seasonal supply constraints
"The March quarter increase of 0.9 per cent follows two quarters in a row of 0.2 per cent rises," said Leigh Merrington, ABS acting head of prices statistics.
The sharp quarterly rise was primarily driven by housing costs (+1.7%), education expenses (+5.2%), and food and non-alcoholic beverages (+1.2%).
Brisbane residents faced the most significant electricity price shock, as most households have depleted their $1,000 Queensland State Government electricity rebate, resulting in higher out-of-pocket costs. Additionally, the impact of the Commonwealth Energy Bill Relief Fund rebates was lower this quarter compared to the December quarter due to payment timing.
"This is the lowest annual outcome for Services inflation since the June 2022 quarter, reflecting easing inflation across a broad range of services, including rents and insurance," Merrington added, highlighting one positive aspect in the otherwise concerning report.
The trimmed mean inflation rate, which excludes extreme price movements and is closely watched by the Reserve Bank of Australia, fell to 2.9% annually, down from 3.3% in the December quarter—its lowest level since December 2021.
For many families already struggling with cost-of-living pressures, the education cost increases were particularly painful. Preschool and primary education rose 5.6%, secondary education jumped 6.4%, and tertiary education increased 3.6% due to the annual indexation of university course fees.
Fresh produce prices also contributed to inflation, with avocados, mangoes, asparagus, tomatoes, and lettuce seeing seasonal increases due to reduced supply.
Have rising electricity costs or education expenses impacted your household budget this quarter?
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