Chalmers urged to loosen performance test to get super behind net zero
In a paper published ahead of Treasurer Jim Chalmers' three day Economic Reform Roundtable next month, the Association of Superannuation Funds of Australia said its members were sometimes hesitant to invest in areas such as renewable energy because they risked getting a poor performance grade.
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Even if these aren't new ideas, we have a chance to shift the conversation
The Treasurer has released the agenda for the much-vaunted three-day Economic Reform Roundtable he is hosting in just a few short days (August 19 to 21), and there is feverish activity on many fronts in the lead-up. Submissions aplenty and roundtables hosted by Ministers to capture input from those not in the impressive core group of 23 attendees that will participate in all sessions over the three days. The public release of some submissions has helped generate lead-up discussion. Possibilities are being canvassed, and the government's appetite for decisiveness and boldness is being probed. This, in turn, has generated hope, interest and some debate. The Productivity Commission's proposal to lower the company tax rate for SMEs is an example of quality thought-leadership. It aims to boost entrepreneurship, investment and competitiveness and would be funded by tax changes for the big end of town. It is an example of bold, multidimensional and transformative reform we need. Like so many bigger ideas, it is not uncontested. Where do the benefits and costs land? What are the trade-offs? Which businesses are driving prosperity gains and are most helping budget repair? What of the three in five small businesses that are not companies? You get the idea. Cautious optimism was very much the vibe at the recent small business roundtable I attended, along with other willing contributors assembled by Small Business Minister Anne Aly and Treasury. It was one of the numerous lead-up roundtables before the big event. The small-business champions, professional bodies, industry associations and financial and digital service providers all contributed meaningfully and constructively. Many of the well-argued ideas for reform were not new, but definitely warranted reiteration and reinforcement. Beyond sharing many great ideas, those gathered were keen to know about the government's economic reform ambition and appetite, and who the ball-carriers are who will ensure that constructive and considered input is embraced. This is particularly important for positive small business policy action. So many of the impacts and incentives guiding enterprising women and men's decision-making are (sadly) not directly the responsibility of the Minister for Small Business. Pleasingly for many of the roundtable participants, Minister Aly's opening remarks were strong, energetic and encouraging. The minister clearly appreciates that positive change for the small business community requires a whole-of-government effort. And whole-of-government support for small businesses is justified and necessary given the sector's vital contribution to Australia's economic wellbeing. Making up almost 98 per cent of Australian businesses, small enterprises generate about one-third of our GDP, which is nearly $600 billion in annual economic activity. Our smaller firms employ more than 5.1 million people, or two in five of the private sector workforce. While this current contribution is impressive and compelling, the small business share of overall economic activity and workforce opportunities has been in decline, like in other developed economies. Arresting this decline is an excellent and meaningful initial benchmark for reform success. To improve Australia's productivity, economic resilience and budget sustainability, we need to go beyond halting this decline. Turning it around will require improving operating conditions, encouraging entrepreneurship and nurturing an environment more conducive to small business success. This objective is why I have been banging on about the Australian Small Business and Family Enterprise Ombudsman's 14 steps to energise enterprise since August last year. These 14 steps are practical, readily implementable and action-driven. Pleasingly, many of these 14 steps are reflected in submissions and public statements about where the focus of the Economic Reform Roundtable should be and what practical commitments should emerge. Even if some of these ideas are not new, a Roundtable commitment to act will shift the conversation. Reform ideas will have landed, gained traction and political buy-in. Advocates can progress conversations from a how-'bout-this pitching of reform propositions to a how's-it-going inquiry about genuine progress. And that has to be positive and momentum-building. There are many calls for better incentives for small businesses to form, invest, take risks, survive and thrive. Discounting small business company tax paid in the first three years will help new firms get through the early years' "cashflow value of death". This will support reinvestment into a more robust foundation and help reduce the rate and cost of the reported 50 per cent small business failure rate within the first three years of operation. A more generous and durable instant asset write-off provision will support vital capital deepening and capability-building in smaller firms. A restoration of tax incentives to encourage investment in digitisation, AI and technology uptake, energy efficiency and electrification, will boost productivity, support innovation and competitiveness, and enhance resilience and market access. Australian small businesses are falling behind their Asia-Pacific counterparts in the adoption of digital technologies. Investing in targeted support and education for small businesses to adopt digital technologies in their businesses can increase productivity by streamlining processes, building resilience to economic shocks, mitigating the risks of cybersecurity threats, supporting innovation and growth, and enhancing competitiveness with larger firms. Small businesses are not shrink-wrapped versions of big corporations. Right-sizing has to be the imperative in a renewed commitment to lift the regulatory burden and compliance costs imposed on small businesses. A genuinely risk-based, small-business-first approach and robust impact evaluation framework that genuinely considers non-regulatory options is needed. Including a mandatory small business impact section in all Cabinet submissions and adding small business engagement and support criteria to the regulatory agency performance assessment framework will enhance both thoughtfulness toward smaller respondents and accountability. Implementing digital reforms, which will encourage the adoption of business-ready new tech and AI, offers the promise of streamlining the business of running the business. Digital compliance and reporting systems that work in harmony with the natural business systems currently used by small businesses can ease the regulatory burdens. Regulators can really help by being very discerning about what they are asking small businesses, and in supporting small firms understand and meet what is being imposed. Synchronising and harmonising the ask of small businesses across various regulators and levels of government, and a tell-us-once ethos, shouldn't be too much of an ask. The United Nations reminds us that small and medium enterprises as the "frontline drivers of innovation, inclusion, and resilience". Small and family businesses need to be front of mind for our policymakers, especially as we head into the economic roundtable. When thinking about how best to drive the economic resilience and productivity improvements, energising enterprise through small businesses is a great starting point. The Treasurer has released the agenda for the much-vaunted three-day Economic Reform Roundtable he is hosting in just a few short days (August 19 to 21), and there is feverish activity on many fronts in the lead-up. Submissions aplenty and roundtables hosted by Ministers to capture input from those not in the impressive core group of 23 attendees that will participate in all sessions over the three days. The public release of some submissions has helped generate lead-up discussion. Possibilities are being canvassed, and the government's appetite for decisiveness and boldness is being probed. This, in turn, has generated hope, interest and some debate. The Productivity Commission's proposal to lower the company tax rate for SMEs is an example of quality thought-leadership. It aims to boost entrepreneurship, investment and competitiveness and would be funded by tax changes for the big end of town. It is an example of bold, multidimensional and transformative reform we need. Like so many bigger ideas, it is not uncontested. Where do the benefits and costs land? What are the trade-offs? Which businesses are driving prosperity gains and are most helping budget repair? What of the three in five small businesses that are not companies? You get the idea. Cautious optimism was very much the vibe at the recent small business roundtable I attended, along with other willing contributors assembled by Small Business Minister Anne Aly and Treasury. It was one of the numerous lead-up roundtables before the big event. The small-business champions, professional bodies, industry associations and financial and digital service providers all contributed meaningfully and constructively. Many of the well-argued ideas for reform were not new, but definitely warranted reiteration and reinforcement. Beyond sharing many great ideas, those gathered were keen to know about the government's economic reform ambition and appetite, and who the ball-carriers are who will ensure that constructive and considered input is embraced. This is particularly important for positive small business policy action. So many of the impacts and incentives guiding enterprising women and men's decision-making are (sadly) not directly the responsibility of the Minister for Small Business. Pleasingly for many of the roundtable participants, Minister Aly's opening remarks were strong, energetic and encouraging. The minister clearly appreciates that positive change for the small business community requires a whole-of-government effort. And whole-of-government support for small businesses is justified and necessary given the sector's vital contribution to Australia's economic wellbeing. Making up almost 98 per cent of Australian businesses, small enterprises generate about one-third of our GDP, which is nearly $600 billion in annual economic activity. Our smaller firms employ more than 5.1 million people, or two in five of the private sector workforce. While this current contribution is impressive and compelling, the small business share of overall economic activity and workforce opportunities has been in decline, like in other developed economies. Arresting this decline is an excellent and meaningful initial benchmark for reform success. To improve Australia's productivity, economic resilience and budget sustainability, we need to go beyond halting this decline. Turning it around will require improving operating conditions, encouraging entrepreneurship and nurturing an environment more conducive to small business success. This objective is why I have been banging on about the Australian Small Business and Family Enterprise Ombudsman's 14 steps to energise enterprise since August last year. These 14 steps are practical, readily implementable and action-driven. Pleasingly, many of these 14 steps are reflected in submissions and public statements about where the focus of the Economic Reform Roundtable should be and what practical commitments should emerge. Even if some of these ideas are not new, a Roundtable commitment to act will shift the conversation. Reform ideas will have landed, gained traction and political buy-in. Advocates can progress conversations from a how-'bout-this pitching of reform propositions to a how's-it-going inquiry about genuine progress. And that has to be positive and momentum-building. There are many calls for better incentives for small businesses to form, invest, take risks, survive and thrive. Discounting small business company tax paid in the first three years will help new firms get through the early years' "cashflow value of death". This will support reinvestment into a more robust foundation and help reduce the rate and cost of the reported 50 per cent small business failure rate within the first three years of operation. A more generous and durable instant asset write-off provision will support vital capital deepening and capability-building in smaller firms. A restoration of tax incentives to encourage investment in digitisation, AI and technology uptake, energy efficiency and electrification, will boost productivity, support innovation and competitiveness, and enhance resilience and market access. Australian small businesses are falling behind their Asia-Pacific counterparts in the adoption of digital technologies. Investing in targeted support and education for small businesses to adopt digital technologies in their businesses can increase productivity by streamlining processes, building resilience to economic shocks, mitigating the risks of cybersecurity threats, supporting innovation and growth, and enhancing competitiveness with larger firms. Small businesses are not shrink-wrapped versions of big corporations. Right-sizing has to be the imperative in a renewed commitment to lift the regulatory burden and compliance costs imposed on small businesses. A genuinely risk-based, small-business-first approach and robust impact evaluation framework that genuinely considers non-regulatory options is needed. Including a mandatory small business impact section in all Cabinet submissions and adding small business engagement and support criteria to the regulatory agency performance assessment framework will enhance both thoughtfulness toward smaller respondents and accountability. Implementing digital reforms, which will encourage the adoption of business-ready new tech and AI, offers the promise of streamlining the business of running the business. Digital compliance and reporting systems that work in harmony with the natural business systems currently used by small businesses can ease the regulatory burdens. Regulators can really help by being very discerning about what they are asking small businesses, and in supporting small firms understand and meet what is being imposed. Synchronising and harmonising the ask of small businesses across various regulators and levels of government, and a tell-us-once ethos, shouldn't be too much of an ask. The United Nations reminds us that small and medium enterprises as the "frontline drivers of innovation, inclusion, and resilience". Small and family businesses need to be front of mind for our policymakers, especially as we head into the economic roundtable. When thinking about how best to drive the economic resilience and productivity improvements, energising enterprise through small businesses is a great starting point. The Treasurer has released the agenda for the much-vaunted three-day Economic Reform Roundtable he is hosting in just a few short days (August 19 to 21), and there is feverish activity on many fronts in the lead-up. Submissions aplenty and roundtables hosted by Ministers to capture input from those not in the impressive core group of 23 attendees that will participate in all sessions over the three days. The public release of some submissions has helped generate lead-up discussion. Possibilities are being canvassed, and the government's appetite for decisiveness and boldness is being probed. This, in turn, has generated hope, interest and some debate. The Productivity Commission's proposal to lower the company tax rate for SMEs is an example of quality thought-leadership. It aims to boost entrepreneurship, investment and competitiveness and would be funded by tax changes for the big end of town. It is an example of bold, multidimensional and transformative reform we need. Like so many bigger ideas, it is not uncontested. Where do the benefits and costs land? What are the trade-offs? Which businesses are driving prosperity gains and are most helping budget repair? What of the three in five small businesses that are not companies? You get the idea. Cautious optimism was very much the vibe at the recent small business roundtable I attended, along with other willing contributors assembled by Small Business Minister Anne Aly and Treasury. It was one of the numerous lead-up roundtables before the big event. The small-business champions, professional bodies, industry associations and financial and digital service providers all contributed meaningfully and constructively. Many of the well-argued ideas for reform were not new, but definitely warranted reiteration and reinforcement. Beyond sharing many great ideas, those gathered were keen to know about the government's economic reform ambition and appetite, and who the ball-carriers are who will ensure that constructive and considered input is embraced. This is particularly important for positive small business policy action. So many of the impacts and incentives guiding enterprising women and men's decision-making are (sadly) not directly the responsibility of the Minister for Small Business. Pleasingly for many of the roundtable participants, Minister Aly's opening remarks were strong, energetic and encouraging. The minister clearly appreciates that positive change for the small business community requires a whole-of-government effort. And whole-of-government support for small businesses is justified and necessary given the sector's vital contribution to Australia's economic wellbeing. Making up almost 98 per cent of Australian businesses, small enterprises generate about one-third of our GDP, which is nearly $600 billion in annual economic activity. Our smaller firms employ more than 5.1 million people, or two in five of the private sector workforce. While this current contribution is impressive and compelling, the small business share of overall economic activity and workforce opportunities has been in decline, like in other developed economies. Arresting this decline is an excellent and meaningful initial benchmark for reform success. To improve Australia's productivity, economic resilience and budget sustainability, we need to go beyond halting this decline. Turning it around will require improving operating conditions, encouraging entrepreneurship and nurturing an environment more conducive to small business success. This objective is why I have been banging on about the Australian Small Business and Family Enterprise Ombudsman's 14 steps to energise enterprise since August last year. These 14 steps are practical, readily implementable and action-driven. Pleasingly, many of these 14 steps are reflected in submissions and public statements about where the focus of the Economic Reform Roundtable should be and what practical commitments should emerge. Even if some of these ideas are not new, a Roundtable commitment to act will shift the conversation. Reform ideas will have landed, gained traction and political buy-in. Advocates can progress conversations from a how-'bout-this pitching of reform propositions to a how's-it-going inquiry about genuine progress. And that has to be positive and momentum-building. There are many calls for better incentives for small businesses to form, invest, take risks, survive and thrive. Discounting small business company tax paid in the first three years will help new firms get through the early years' "cashflow value of death". This will support reinvestment into a more robust foundation and help reduce the rate and cost of the reported 50 per cent small business failure rate within the first three years of operation. A more generous and durable instant asset write-off provision will support vital capital deepening and capability-building in smaller firms. A restoration of tax incentives to encourage investment in digitisation, AI and technology uptake, energy efficiency and electrification, will boost productivity, support innovation and competitiveness, and enhance resilience and market access. Australian small businesses are falling behind their Asia-Pacific counterparts in the adoption of digital technologies. Investing in targeted support and education for small businesses to adopt digital technologies in their businesses can increase productivity by streamlining processes, building resilience to economic shocks, mitigating the risks of cybersecurity threats, supporting innovation and growth, and enhancing competitiveness with larger firms. Small businesses are not shrink-wrapped versions of big corporations. Right-sizing has to be the imperative in a renewed commitment to lift the regulatory burden and compliance costs imposed on small businesses. A genuinely risk-based, small-business-first approach and robust impact evaluation framework that genuinely considers non-regulatory options is needed. Including a mandatory small business impact section in all Cabinet submissions and adding small business engagement and support criteria to the regulatory agency performance assessment framework will enhance both thoughtfulness toward smaller respondents and accountability. Implementing digital reforms, which will encourage the adoption of business-ready new tech and AI, offers the promise of streamlining the business of running the business. Digital compliance and reporting systems that work in harmony with the natural business systems currently used by small businesses can ease the regulatory burdens. Regulators can really help by being very discerning about what they are asking small businesses, and in supporting small firms understand and meet what is being imposed. Synchronising and harmonising the ask of small businesses across various regulators and levels of government, and a tell-us-once ethos, shouldn't be too much of an ask. The United Nations reminds us that small and medium enterprises as the "frontline drivers of innovation, inclusion, and resilience". Small and family businesses need to be front of mind for our policymakers, especially as we head into the economic roundtable. When thinking about how best to drive the economic resilience and productivity improvements, energising enterprise through small businesses is a great starting point. The Treasurer has released the agenda for the much-vaunted three-day Economic Reform Roundtable he is hosting in just a few short days (August 19 to 21), and there is feverish activity on many fronts in the lead-up. Submissions aplenty and roundtables hosted by Ministers to capture input from those not in the impressive core group of 23 attendees that will participate in all sessions over the three days. The public release of some submissions has helped generate lead-up discussion. Possibilities are being canvassed, and the government's appetite for decisiveness and boldness is being probed. This, in turn, has generated hope, interest and some debate. The Productivity Commission's proposal to lower the company tax rate for SMEs is an example of quality thought-leadership. It aims to boost entrepreneurship, investment and competitiveness and would be funded by tax changes for the big end of town. It is an example of bold, multidimensional and transformative reform we need. Like so many bigger ideas, it is not uncontested. Where do the benefits and costs land? What are the trade-offs? Which businesses are driving prosperity gains and are most helping budget repair? What of the three in five small businesses that are not companies? You get the idea. Cautious optimism was very much the vibe at the recent small business roundtable I attended, along with other willing contributors assembled by Small Business Minister Anne Aly and Treasury. It was one of the numerous lead-up roundtables before the big event. The small-business champions, professional bodies, industry associations and financial and digital service providers all contributed meaningfully and constructively. Many of the well-argued ideas for reform were not new, but definitely warranted reiteration and reinforcement. Beyond sharing many great ideas, those gathered were keen to know about the government's economic reform ambition and appetite, and who the ball-carriers are who will ensure that constructive and considered input is embraced. This is particularly important for positive small business policy action. So many of the impacts and incentives guiding enterprising women and men's decision-making are (sadly) not directly the responsibility of the Minister for Small Business. Pleasingly for many of the roundtable participants, Minister Aly's opening remarks were strong, energetic and encouraging. The minister clearly appreciates that positive change for the small business community requires a whole-of-government effort. And whole-of-government support for small businesses is justified and necessary given the sector's vital contribution to Australia's economic wellbeing. Making up almost 98 per cent of Australian businesses, small enterprises generate about one-third of our GDP, which is nearly $600 billion in annual economic activity. Our smaller firms employ more than 5.1 million people, or two in five of the private sector workforce. While this current contribution is impressive and compelling, the small business share of overall economic activity and workforce opportunities has been in decline, like in other developed economies. Arresting this decline is an excellent and meaningful initial benchmark for reform success. To improve Australia's productivity, economic resilience and budget sustainability, we need to go beyond halting this decline. Turning it around will require improving operating conditions, encouraging entrepreneurship and nurturing an environment more conducive to small business success. This objective is why I have been banging on about the Australian Small Business and Family Enterprise Ombudsman's 14 steps to energise enterprise since August last year. These 14 steps are practical, readily implementable and action-driven. Pleasingly, many of these 14 steps are reflected in submissions and public statements about where the focus of the Economic Reform Roundtable should be and what practical commitments should emerge. Even if some of these ideas are not new, a Roundtable commitment to act will shift the conversation. Reform ideas will have landed, gained traction and political buy-in. Advocates can progress conversations from a how-'bout-this pitching of reform propositions to a how's-it-going inquiry about genuine progress. And that has to be positive and momentum-building. There are many calls for better incentives for small businesses to form, invest, take risks, survive and thrive. Discounting small business company tax paid in the first three years will help new firms get through the early years' "cashflow value of death". This will support reinvestment into a more robust foundation and help reduce the rate and cost of the reported 50 per cent small business failure rate within the first three years of operation. A more generous and durable instant asset write-off provision will support vital capital deepening and capability-building in smaller firms. A restoration of tax incentives to encourage investment in digitisation, AI and technology uptake, energy efficiency and electrification, will boost productivity, support innovation and competitiveness, and enhance resilience and market access. Australian small businesses are falling behind their Asia-Pacific counterparts in the adoption of digital technologies. Investing in targeted support and education for small businesses to adopt digital technologies in their businesses can increase productivity by streamlining processes, building resilience to economic shocks, mitigating the risks of cybersecurity threats, supporting innovation and growth, and enhancing competitiveness with larger firms. Small businesses are not shrink-wrapped versions of big corporations. Right-sizing has to be the imperative in a renewed commitment to lift the regulatory burden and compliance costs imposed on small businesses. A genuinely risk-based, small-business-first approach and robust impact evaluation framework that genuinely considers non-regulatory options is needed. Including a mandatory small business impact section in all Cabinet submissions and adding small business engagement and support criteria to the regulatory agency performance assessment framework will enhance both thoughtfulness toward smaller respondents and accountability. Implementing digital reforms, which will encourage the adoption of business-ready new tech and AI, offers the promise of streamlining the business of running the business. Digital compliance and reporting systems that work in harmony with the natural business systems currently used by small businesses can ease the regulatory burdens. Regulators can really help by being very discerning about what they are asking small businesses, and in supporting small firms understand and meet what is being imposed. Synchronising and harmonising the ask of small businesses across various regulators and levels of government, and a tell-us-once ethos, shouldn't be too much of an ask. The United Nations reminds us that small and medium enterprises as the "frontline drivers of innovation, inclusion, and resilience". Small and family businesses need to be front of mind for our policymakers, especially as we head into the economic roundtable. When thinking about how best to drive the economic resilience and productivity improvements, energising enterprise through small businesses is a great starting point.
Sky News AU
a day ago
- Sky News AU
Labor told 'implied carbon prices', fixing broken renewables approvals key to lowering emissions in Productivity Commission report
A new report from the Productivity Commission has called on Labor to introduce reforms which would produce a similar effect to an "enduring, national carbon price". The interim report, titled: "Investing in cheaper, cleaner energy and the net zero transformation", is part of a series requested by Treasurer Jim Chalmers ahead of the Albanese government's economic roundtable. In it, the Productivity Commission warns the government must move to address "the gaps and overlaps in emissions reduction incentives, speed up approvals for clean energy infrastructure, and create a resilience-rating system for all housing to meet our clean energy targets and adapt to climate change". By doing so, the report says Labor will be able to both lower the cost of cutting emissions, while also maximising the opportunities presented by the energy transition to boost the economy. The Commission places heavy emphasis on a market-based approach, arguing both the Renewable Energy Target and the Capacity Investment Scheme, both central to Labor's net zero agenda, be scrapped in favour of direct incentives in the electricity sector. It also calls for the creation of a new independent agency which would determine a set of "carbon values" against which all emissions reduction policies would be assessed. The agency would set "carbon values" based on the "implied carbon prices" needed to meet Australia's emissions. By doing so, the Commission argues Australia could meet its internationally agreed climate targets at the lowest possible cost. "Our recommendations align with many of the benefits conferred by a broad-based, enduring, national carbon price – a policy that many, including the PC, have consistently argued for," the report said. In addition to factoring in the price of carbon while assessing emissions reduction plans, the report also calls for major reforms to the approval process for renewables projects. "We need to build a large amount of clean energy infrastructure to meet climate targets and ensure reliable and affordable energy supply. But our sluggish and uncertain approval processes are not up to the task," Commissioner Martin Stokie said. "Getting to yes or no quicker on priority projects would meaningfully speed up the clean energy transition." The Commission argues for substantive changes to the Environment Protection and Biodiversity Conservation Act, including the introduction of national environmental standards, improved regional planning and clear rules about engaging with local communities and Aboriginal and Torres Strait Islander peoples. It also recommends the appointment of an independent Clean Energy Coordinator-General to work across government and break through roadblocks, as well as the creation of a "strike team" to rapidly asses priority projects. Other recommendations included in the report include an increase to the number of facilities covered by Labor's emissions reduction program for industry, the Safeguard Mechanism, and the abolishment of a fringe benefits tax exemption for electric vehicles.
Sky News AU
a day ago
- Sky News AU
Three years of soaring inflation continues to weigh on Aussie households despite Jim Chalmers lauding inflation's decline
Aussies continue to be plagued with the cumulative impacts of years of price rises despite Treasurer Jim Chalmers lauding a recent drop in inflation. Mr Chalmers on Wednesday boasted about inflation falling to its lowest point since March 2021 when annual headline inflation sank to 2.1 per cent in the June quarter. 'No major advanced economy has achieved what Australia has been able to achieve,' the Treasurer said during Question Time. 'Inflation in the low 2s, unemployment in the low 4s (and) three years of continuous economic growth. 'At the same time that inflation is going up in the US, the UK, Canada, New Zealand, it's coming down here in Australia.' But household budgets are strained by cumulative price rises since Labor came to power with a myriad of factors including global supply chain constraints and large government spending being blamed for costs of many everyday goods soaring. analysis of Australian Bureau of Statistics inflation data has revealed how the costs of many household items have skyrocketed in the 36 months to July 1. Eggs are up a whopping 41 per cent with the good soaring 19.1 per cent over the past year alone. It comes amid shortages that left supermarket shelves bare after avian flu swept the nation's poultry farms. Insurances are up more than 35 per cent, while rents have jumped 19.68 per cent and gas and household fuels are up almost 30 per cent. Meanwhile, a litany of household staples including milk (up 17.88 per cent), bread (up 19.87 per cent) and fruit (up 18.37 per cent) have surged in recent years. The cost of food and non-alcoholic beverages as a whole are up 14.43 per cent, just above the 12.37 per cent total consumer price index rise over the past three years. Despite massive inflation amongst some goods, others have either sank in cost or increased below the CPI jump. Fuel costs (down 6.12 per cent) have settled since they spiked after Russia invaded Ukraine, while meat and seafoods have only risen about six per cent over three years. The rises feel unsustainable for many Australians, and the pain will not evaporate until wages catch up with the price jumps seen across the economy. Deloitte Access Economics partner Stephen Smith predicted it will be about half a decade before Australians can regain their pre-pandemic purchasing power. 'While inflation is now back within the RBA's target band, Australians are not going to see prices fall back to where they were before the pandemic,' Mr Smith told 'While some prices do fluctuate over time – such as petrol and certain groceries – prices more generally tend to rise. 'Inflation is generally forecast to remain in the RBA's target band of 2-3 per cent into the future, which means it will take several years before Australians' purchasing power is restored to pre-pandemic levels. 'In other words, the households today cannot afford the same basket of goods and services that they could before the pandemic, and they are unlikely to recover that purchasing power for at least another five years.' Shadow Treasurer Ted O'Brien said the recent inflation data was welcome news for millions of Aussies banking on further rate relief, but stressed cumulative price rises weighed heavily on households. 'A rate cut would be welcome relief to the average Australian mortgage holder who is currently paying an additional $1,900 in interest every month compared to when Labor came to office,' a statement from Mr O'Brien read. 'The price of everything has gone up under Labor and, despite today's announcement, it is never coming down. 'The ABS data simply indicates prices are now increasing at a slower rate.' Trimmed mean inflation – the middle 70 per cent of price changes core the RBA's rate decisions – continues to fall within the central bank's 2-3 per cent target band, sparking hopes of mortgage relief down the track. Many have criticized large government spending, which has soared to 27.6 per cent of GDP, for worsening inflation while prices jumped after the pandemic. 'Government spending did exacerbate the inflation problem, primarily because of income support and other payments to households, which added to spending in the economy,' Mr Smith said. 'Some of this support, such as the energy bill relief payments, could have been better targeted toward low-income households, reducing spending pressure in the economy. He acknowledged that government spending was 'not the primary driver of inflation' with administered prices - which are set by non-market forces, based on inflation data and are for services such as childcare, medical and insurance. 'This perpetuates the problems and makes it more difficult to bring inflation back down to more normal levels,' Mr Smith said. Lifting the nation's economy and putting more cash back into everyday Aussies' pockets will come into focus this month when leaders across business, politics and unions congregate at the upcoming economic roundtable. It is here where the leading minds will attempt to conjure up a solution to the nation's lagging growth and stalling productivity.
