Honestly, how bad has it got to get before Australia does something about the nation-destroying East Coast gas cartel?
The IMF expects Australia’s inflation rate to rise to 3.6% by December 2025 as federal and state government cost-of-living relief is wound back. The IMF had previously forecast in April that Australia’s inflation rate would fall to 2.8% in 2025.
Cost-of-living relief is code for energy rebates that offset gas cartel utility bill shocks.
The IMF should be congratulated for bringing this to Australia’s attention, even if the media failed to pass on the message, as usual.
It appears the IMF, like the RBA, is agog at Australian energy corruption.
However, the IMF also underestimates it, just as the RBA has done.
The idea that the rebates will be unwound is as credible as an Aussie politician.
The rebates will be extended in MEYFO and extended again in all subsequent budget updates until the sun engulfs the earth.
Currently, the gas cartel is bust gouging the energy off-peak season with prices well above Albo’s failed $12Gj price cap:
Needless to say, electricity prices are also far above normal, roughly one-third above 2023 for the QMA:
Expect a big new round of bill shocks in 2025 delivered by the AER and an equally large round of energy rebates, regardless of who is in power.
And, indeed, the rebates are double deflationary. Because rebates lower headline inflation, they ensure that all administered prices that are linked to headline inflation fall as well (roughly 20% of the CPI).
Second, rebates are funded out of higher taxes, so they decrease household discretionary incomes, which is also deflationary.
This is Chicken Chalmers’s energy gift to the nation.
No longer need we worry about the gas cartel’s inflationary dumpster fire or the derailed energy transition because the gas cartel’s malign impacts will be disguised by shifting the impact from bills in the sunlight to taxes in the dark.
Australian inflation will be absolutely fine.
Your taxes and standards of living, not so much.
