The rate of inflation remained subdued in the December quarter as government stimulus measures helped to keep the lid on some price pressures, and despite a jump in tobacco prices.
The consumer price index for the December quarter rose 0.9 per cent, slightly higher than the 0.7 per cent increase economists had expected.
However, the Australian Bureau of Statistics said the annual rate of inflation was also just 0.9 per cent.
This is well below the Reserve Bank's two to three per cent inflation target.
"The December quarter CPI was primarily impacted by an increase in tobacco excise and the introduction, continuation and conclusion of a number of government schemes, including child care fee subsidies and home building grants," ABS head of prices statistics Michelle Marquardt said.
The most significant price rises in the December quarter included a 10.9 per cent increase for tobacco following a 12.5 per cent increase in excise duty.
The unwinding of free child care led to a jump of 37.7 per cent, with out-of-pocket expenses now returning to pre-COVID levels.
Demand for new dwellings pushed prices up 0.7 per cent, but would have been higher if not for government stimulus measures like the $25,000 HomeBuilder grant.
The most significant price fall was in electricity, which was down 7.5 per cent as a result of the West Australian government's household electricity credit payment.
Underlying measures of inflation - which smooth out wild price swings and are closely monitored by the Reserve Bank in terms of monetary policy - also remained subdued.
Australian Associated Press
