Australia braces for inflation rise to 4.2% as Greens pitch higher tax-free threshold
Australian data due on Tuesday is expected to show inflation climbing to 4.2% in the year to September, raising the odds of another Reserve Bank rate hike next week. Greens leader David Shoebridge meanwhile proposes lifting the tax-free threshold to $26,000.
Australia is due to publish its latest official inflation figures on Tuesday, with economists expecting annual inflation to have risen to 4.2% in the year to September, up from 4% a month earlier. The data will shape the Reserve Bank of Australia's (the central bank's) interest rate decision and fuel political debate during a parliamentary sitting week.
Fuel prices and rate hike odds
Rising fuel costs, driven by a worsening conflict in the Middle East, are adding to cost-of-living pressure. Close attention will be paid to the Reserve Bank's preferred measure of underlying inflation, which strips out the most volatile prices. It is forecast to hold at 3.6% in the year to the September quarter. Anything higher would virtually guarantee a fifth rate rise next Tuesday. Recent comments from senior central bank officials suggest they are more concerned about high inflation becoming entrenched than about rising unemployment. Financial markets are pricing in roughly a 65% chance of a rate increase on Melbourne Cup day.
The opposition is expected to use the figures to attack Anthony Albanese's Labor government over its handling of the economy.
Greens proposals
Greens leader David Shoebridge will address the National Press Club in Canberra on Tuesday. He proposes raising the tax-free threshold from $18,200 to $26,000, which he says would save the average working Australian more than $1,000 a year. The party also wants a $1,000 annual boost for people on income support, including pensioners, carers, students and job seekers.
Costings from the Parliamentary Budget Office show the plan would cost about $22bn a year. Shoebridge proposes to fund it through higher taxes on gas exports and a market-based tax on resources companies.
He is also expected to take questions about allegations against Greens senator Jordon Steele-John, who is on leave from parliament while his conduct towards women is investigated. Steele-John has denied the allegations.
