The Federal Treasurer is right: there has been a broad-based easing of inflationary pressures. The latest inflation figures (blink and you would have missed them) indicate that electricity and water charges, the cost of house purchase and rents were the big movers in the September quarter. All these items are in the Housing component of the consumer price index (CPI). Strip out housing, and inflation rose 0.4% in the quarter and 0.1% over the year.
Sure, you just can’t take components out of the CPI. But the key point is that if you removed any other price group from the CPI it would show annual inflation hovering near 1%. Take out housing and the annual rate of inflation would be 0.1% – a major difference. This adds further weight to the argument that inflation is being driven more by
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