"A temporary reprieve on fuel prices has helped to lower CPI, but mounting inflationary pressures across the economy cannot be ignored," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
Headline CPI eased from 4.0% to 3.8% p.a. in June 2026. This was primarily driven by a 10.9% fall in automotive fuel prices during the month, as global energy prices eased with stabilisation in the Middle East conflict.
However, most other categories have been rising over the last quarter, with food, housing, household goods & services and recreation all seeing inflation accelerate. Household electricity prices were a major driver, 22.4% higher in June than a year prior as government subsidies ended.
"The improvement in global energy markets helpfully took out some heat, but Australia's inflationary problems remain as pressing as ever," Mr Willox said. "Domestic inflation remains too high, broad-based, and is moving in the wrong direction.
"Indeed, the fuel price reprieve won't last. As the conflict in the Middle East intensified and excise relief was withdrawn, wholesale diesel prices jumped from $1.60 to $2.16 per litre in July. They will rise another 16 cents in August when the remaining excise relief rolls off.
"Australian policymakers cannot control global energy markets, but nor can they blame them for all our inflationary woes. Our resilience in the face of the coming round of energy pressures would be greater if we had our own house in order.
"This has a real cost, by forcing the RBA to maintain higher rates than our subdued economic conditions would otherwise warrant. Governments could make the job easier by reining in the record-level spending that is fuelling the inflationary fire," Mr Willox said.
