When Australian opposition leader Peter Dutton wanted to throw red meat to an electorate hit by rising living costs, he headed to one Sydney’s largest meat markets.
Electricity costs have rocketed since the last election, he said, with businesses such as the Pendle Hill Meat Market spending thousands of dollars more a month on cold storage than they were in 2022. Those higher costs have been passed on to the consumer, he said.
Rising power expenses have become symbolic of a wider political debate ahead of a vote likely to be held in mid-May, with Dutton tying the ruling Labor party’s flagship investments in renewable energy to the cost of living crisis.
“Australians are paying more for their electricity and more for their gas because of the government’s reckless renewables-only energy policy,” he said. “It’s why Australians are really struggling.”
The cost of living remains at the “forefront” of the election, said Michele Levine, chief executive of research and polling company Roy Morgan.
“Everywhere you turn there are extra costs that people are being confronted with — energy bills, mortgage costs or rent, petrol prices, even the price of bananas — that’s where it’s really hurting,” she said.
In the run-up to the 2022 election, Prime Minister Anthony Albanese told voters that investment in offshore wind, hydrogen and rooftop solar would deliver cheaper energy bills in the long term.
However, electricity bills rose 14 per cent in 2023 following Russia’s full-scale invasion of Ukraine and would have risen further last year if not for government subsidies. The energy regulator this month said some power companies could raise residential prices by as much as 9 per cent. Households are also reeling from 13 interest rate rises between 2022 and 2024.
Jim Chalmers, Australia’s treasurer, said this month that “a lot of progress” had been made on getting inflation under control even as he acknowledged that “Australians are still under the pump”.
The government has introduced measures to help ease price pressures, Chalmers said, referring to energy subsidies, tax cuts, student debt relief and reforms of the childcare system. The budget, due at the end of March, offers the government another chance to provide support to stretched households.
The central bank cut interest rates by a quarter of a percentage point in February, the first reduction since 2020, and January inflation data showed consumer prices rose 2.5 per cent year on year, within the bank’s target band, with the cost of electricity and petrol now in retreat.
Yet energy prices remain much higher than when Labor took office.
“There is no sense that since the [rate] cut we’ve turned the corner on the economy,” said Tony Barry, a political strategist with Redbridge Group, noting that 81 per cent of those asked in a recent survey put the cost of living as their biggest worry, against 36 per cent for housing and 25 per cent for crime.
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“The impact of high inflation over the past couple of years has permanently increased the price level. That has hurt everyone, but particularly those on lower incomes and the more vulnerable,” said Michele Bullock, governor of the Reserve Bank of Australia, which has retained a cautious stance about future rate cuts this year.
Polls heading into the election show Dutton’s Liberal party edging ahead of Labor.
For Dai Le, an independent MP who won the western Sydney seat of Fowler in 2022 despite Labor’s election triumph, the government has woken up “far too late” to the budgetary pressure on households.
Le said Labor was now in danger of losing other blue-collar Sydney and Melbourne seats because voters had been “neglected” by the government.
“People are just choking on electricity prices and grocery bills,” she said. “One interest rate cut is not going to help people breathe.”
Rising prices have also hurt better-off Australians. Christian Speziali, who ran a construction and excavation business on Sydney’s affluent northern beaches for 25 years, said even wealthier customers have cut back on new swimming pools and driveways.
“We have politicians that couldn’t run a meat raffle in a bowling club,” he said.
“The ‘cost of living crisis’ is a really good sugar coat — political spin — for the fact that people can’t afford to live, to put braces on their kids, to fill up their cars with petrol and to pay their mortgages.”
Data visualisation by Haohsiang Ko
