Stimulus measures restrain price pressures

The effects of COVD-19 on the CPI are subsiding, but still impact out-of-pocket household expenses.
The effects of COVD-19 on the CPI are subsiding, but still impact out-of-pocket household expenses.

The cost of living for ordinary Australians continues to be shielded by coronavirus economic stimulus measures, but the impacts are beginning to ease.

The latest inflation figures are due for release later this month.

Ahead of the consumer price index report, the Australian Bureau of Statistics has offered a glimpse of what will impact the results.

The ABS says the effects of coronavirus on the CPI are subsiding, but still impacted out-of-pocket household expenses in the final three months of last year.

The agency expects the effect to be less pronounced than the previous two quarters reported.

Federal and state governments introduced a number of schemes to support households hit by the economic impacts of coronavirus.

Some of these will impact inflation figures.

The December quarter CPI will reflect the federal government's $25,000 HomeBuilder grant, and similar $20,000 grants introduced by the Western Australian and Tasmanian governments.

The building and renovation grants drove down the price of new houses for owner-occupiers.

A West Australian scheme offering households a one off $600 credit for their electricity bills will also be reflected in the CPI figures.

However, the ABS expects negligible impact from various government schemes introduced to lower costs and encourage spending on dining out, entertainment and domestic travel.

The federal government's introduction of a free child care package at the height of the coronavirus pandemic was partly reflected in a record 1.9 per cent plunge in the June quarter CPI.

The subsequent ending of this scheme saw CPI bounce back 1.6 per cent in the September quarter.

However, this still left the annual rate of inflation at a meagre 0.7 per cent, well shy of the reserve bank's two to three per cent target band.

Australian Associated Press