{"id":33557,"date":"2025-07-30T23:12:10","date_gmt":"2025-07-30T23:12:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/33557\/"},"modified":"2025-07-30T23:12:10","modified_gmt":"2025-07-30T23:12:10","slug":"as-western-australia-posts-worst-inflation-figures-in-nation-state-government-spruiks-responsible-financial-management","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/33557\/","title":{"rendered":"As Western Australia posts worst inflation figures in nation, state government spruiks ‘responsible’ financial management"},"content":{"rendered":"

Thinking about the cost of living and the pressures of inflation are things we would all rather leave in the past, right?<\/p>\n

The WA government certainly wants you to.<\/p>\n

“The inflation beast has been tamed,” Treasurer Rita Saffioti said in handing down this year’s state budget, with its noted shift away from cost-of-living relief and towards the government’s focus on diversifying the state’s economy<\/a>.\u00a0<\/p>\n

Latest inflation figures make rates cut ‘increasingly likely’, economists say<\/a><\/p>\n

The “trimmed mean” measure of inflation \u2014 the Reserve Bank’s preferred measure of underlying inflation \u2014 has also declined.<\/p>\n

But has the beast really been tamed?<\/p>\n

The latest inflation data from the Australian Bureau of Statistics \u2014 the authority on these things \u2014 showed an improving picture nationally which strengthens the argument for an August interest rate cut<\/a>.\u00a0<\/p>\n

‘Responsible management’<\/p>\n

Western Australia was the outlier, recording a 1.9 per cent increase in the cost of living between March and June, and a 2.7 per cent increase over the year \u2014 both the highest in the nation.<\/p>\n

The vast majority of that was caused by a 116.8 per cent increase in power bills, with Commonwealth and state government rebates coming to an end.<\/p>\n

That has added an extra $550 to most homes’ power bills compared to last year.<\/p>\n

“Thanks to our responsible management of the state finances, we’ve been able to provide significant cost-of-living relief to Western Australians through the worst of the cost-of-living crisis,” was how Ms Saffioti said she saw the inflation numbers.<\/p>\n

\"Rita<\/p>\n

Rita Saffioti said the government had tamed the beast of inflation when she handed down the last state budget in May.\u00a0 (ABC News: Keane Bourke)<\/p>\n

“When excluding the impact of electricity credits being unwound, [quarterly] Perth CPI rose by 0.7 per cent.”<\/p>\n

It is a line the government has often repeated since the budget: if you leave electricity out of inflation calculations, the increases are significantly lower.<\/p>\n

Which is true, of course \u2014 across the rest of the economy, the price shocks of years gone by have significantly settled.<\/p>\n

At one point, we were seeing annual increases of over eight per cent.<\/p>\n

“It would be nice to exclude certain increases, [but] that’s not the lived experience of people living in Western Australia at the moment,” independent economist Conrad Liveris said.<\/p>\n

\"Man<\/p>\n

Conrad Liveris says government power credits may have actually prolonged the financial pain for households.\u00a0 (ABC News: Keane Bourke)<\/p>\n

“They can’t actually exclude those increases.”<\/p>\n

Because, while having a less heated economy on the whole is helpful for people making ends meet, it does not change the fact that power bills are going up significantly over the year.<\/p>\n

That couple of hundred extra dollars will have to come from somewhere.<\/p>\n

Inflation beating wage growth<\/p>\n

Also not helping is that wages have not kept up with rising prices, as anyone trying to balance a household budget knows.<\/p>\n

Between March 2020 and March 2025, inflation rose 22 per cent in Perth \u2014 but wages rose only 17 per cent.<\/p>\n

That is among the biggest gaps in the country, despite wage growth in the west being the third strongest around the nation.<\/p>\n

“Unfortunately, Western Australian families have to pay escalating rents and mortgages whilst wages aren’t budging,” shadow treasurer Sandra Brewer told a business breakfast on Wednesday.<\/p>\n

\"Liberal<\/p>\n

Sandra Brewer says she has seen “no initiative” from the state government.\u00a0 (ABC News: Grace Burmas)<\/p>\n

“We’ve had no productive reforms in this state to drive wages above inflation and create prosperity for the people [since 2017].<\/p>\n

“I welcome the lead of Jim Chalmers’s roundtable to boost productivity and real wages because we have not seen any initiative from WA Labor.”<\/p>\n

Band-aids ripped off<\/p>\n

At the end of the day, though, yesterday’s inflation numbers show Western Australians not only endured the second-worst increase in cost of living over the past five years, but also the longest period of pressure.<\/p>\n

“Effectively, in one way, [the electricity credits] delayed the pain that households are experiencing and they’ll have to contend with that now,” Mr Liveris said.<\/p>\n

“So the situation that we’ve got [from government power credits] has meant that the pain is actually prolonged when it comes to the cost-of-living issues.”<\/p>\n

Ripping off the multi-billion-dollar power bill credit band-aids was always going to hurt.<\/p>\n

The question, which can only be judged with the benefit of hindsight, is whether that support was ultimately well-timed to suppress what could have been an even worse cost-of-living crisis, or whether it could have been better managed to prevent such a harsh end.<\/p>\n

\"pedestrians<\/p>\n

Inflation eased further in the June quarter, but Western Australia led the nation.\u00a0 (Reuters: David Gray)<\/p>\n

The next challenge for the government to confront is how to help wages catch up with inflation in the long term and really share the prosperity of the nation’s richest state with those who have helped create it.<\/p>\n

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