Jim Chalmers on cost of living: Treasurer unsure when grocery, electricity, petrol bill shock to end

Australians are facing one of their worst bill shocks ever with skyrocketing electricity prices, the war in Ukraine pushing petrol prices up and inflation rising to 7.3 percent in the year to September.

Inflation is rising at the fastest pace since 1990 with another price shock looming as Westpac forecasts another 0.5 percent rate hike on Tuesday.

With the rising cost of living firmly in his mind, Federal Treasurer Jim Chalmers launched a charm offensive on Sunday morning when he appeared on ABC’s Insiders.

But there was one question Mr Chalmers couldn’t answer – exactly when Australians could get some relief from sky-high bills.

People are becoming more and more concerned about the price of petrol. Pictured is a woman filling her car on Edgecliff Road in the Sydney suburb of Bondi Junction

If Westpac’s prediction of a 0.5 percent increase on Melbourne Cup Day turns out to be accurate, it would push interest rates to a 10-year high of 3.1 percent.

A borrower with a typical $600,000 loan would see their monthly repayments increase by another $181 to $3,236.

Speaking on the matter on Sunday, Mr Chalmers said the government “always reassess our expectations for electricity price increases’.

‘We had to make a choice, to’ being candid about what is happening in these energy markets or not, we have chosen to be candid,” he said.

“We think it’s critical that we do that, so we’re investigating, shining a light on the important work that needs to be done now and part of that work is investing in new sources of cleaner and cheaper renewable energy.”

Chamlers told Insiders presenter David Speers that the government is “making progress every day”.

“We are working quite hard on this challenge, not only since the budget, but before it,” he said.

But Speers urged him when there would be a solution for higher prices.

“I’m not going to give you a date today, David, but I can point out to your viewers that it’s clearly a high priority for us,” Mr Chalmers replied.

“It’s an ever bigger and bigger part of the inflation challenge we face in a broader sense and the government will work as hard as we can to get a solution here as soon as possible.”

Families in Australia fear that they will not have as much to spend at Christmas as they would like due to high inflation. Pictured are shoppers in a supermarket in Sydney

Inflation in the year to September rose 7.3 percent – the fastest pace since 1990

Mr Chalmers was then asked when specifically energy prices were going to fall.

“We’ve tried to be clear about the composition of this inflation challenge and the fact that the war in Ukraine will make electricity and gas prices a bigger part, a bigger part of this inflation challenge,” he said.

Mr Chalmers said natural disasters, such as flooding, also increased the cost of living.

“Here’s what we expect…the 20 percent (increase in energy bills) is already underway. It’s actually partly a result of the increases that (former Energy Secretary) Angus Taylor hid during the election campaign,” he said.

‘So we also need that perspective. We expect (a) 20 percent (increase), then (a) 30 percent (increase).’

Speers interrupted Mr Chalmers to say, ‘we heard this this week, when are prices going down?’

Mr Chalmers’ response probably hadn’t calmed the nerves of Australians wondering how much they could save for Christmas.

“We’ve given the short-term forecast, the 20 percent and the 30 percent (increase). That goes for this year and next year,” he said.

‘Of course this will have an effect if we invest more in cheaper and cleaner forms of energy, depending of course on which regulatory interventions we can take wisely in the short term.

“But I think we expect prices to go up this year and next year, especially for families and for Australians and for Australian industry.”

The Insiders host then suggested to Mr Chalmers that he didn’t know when prices would fall.

Well, we know they will moderate over time and we know we give ourselves the best chance of doing that by investing in new sources of cleaner and cheaper energy, which is the government’s priority. Mr Chalmers.