To curb inflation, Governments must do more to directly reduce prices, ACOSS said following today’s interest rate rise.
“Government spending is not to blame for higher inflation. But governments can and should take further action to bring down costs for people doing it tough, including by further reducing out-of-pocket specialist and dental care costs as well as child care and aged care fees, capping rent increases, and covering solar subsidies on consumers’ power bills. This would help prevent further rate rises.” said ACOSS CEO Cassandra Goldie.
“By contrast, major spending cuts would have little impact on inflation and only hurt those with the least.”
ACOSS analysis shows that federal, state and local governments directly control or influence the prices of key goods and services comprising almost one fifth (19%) of the consumer price index. These include health services, childcare, and electricity prices.
Governments could also do more to curb excessive increases in rents, which rose by 3.9% over the year to December 2025 and would have risen by 4.2% without increases in Commonwealth Rent Assistance. The federal government should also reduce upward pressure on housing prices by curbing excessively generous property investor tax breaks which fuel demand.
“We welcome government efforts to ease costs for people, including by reducing the cost of prescription medicines. This approach directly reduces inflation while easing the cost of living. It’s clear more intervention of this kind is needed," said Dr Goldie.
“However government action on prices needs to be done in the right way and to help the right people. Poorly targeted financial relief like tax cuts and across-the-board energy rebates won’t help curb inflation and give financial relief to people who do not need it, whilst others remain in poverty.
“We urge governments to focus instead on targeted support for people doing it toughest, such as increasing the woefully inadequate JobSeeker payment.
“The urgent need to increase JobSeeker becomes even more important when interest rate increases result in higher unemployment, making it harder for people to find paid work.”
Contact details:
Charlie Moore: 0452 606 171