Cost of living: 2022 sign comes back to haunt Australia

As a reporter following the election campaign around the nation, watching Jim Chalmers and Katie Gallagher stare at rows of Cavendish bananas was not one of the campaign’s most exciting events.

However, as the two Labor heavyweights inspected the fresh produce, the party’s staffers were busy erecting a placard outside the shop that illuminated what they were there for.

It was two years into the Covid pandemic, and a new buzzword was on everyone’s lips as inflation started to kick in earnestly: the “cost of living crisis”.

The placard was titled “Your Shopping Trolley Under Scott Morrison”, and it displayed the percentage price increases of everyday staples over the previous year under the Liberal government.

At the time, the Coalition government was being politically battered over the rising costs of groceries caused by an inflation storm fuelled by the outbreak of war in Europe, broken pandemic supply lines and devastating east coast floods.

While the Morrison government cried that the crisis was caused by “international factors beyond our control”, Dr Chalmers stood next to the placard in Homebush and blamed the surging prices on “a failure of domestic economic resilience”.

What the sign showed

The graphic showed, among other items, that vegetables had spiked 12.7 per cent, beef had gone up 12.1 per cent and butter and oil had shot up by 8.6 per cent.

And while the Covid crisis has been consigned to the dark recesses of our minds, the cost of living crisis shows no signs of abating four years later.

Since then, Australia has endured a total of 16 interest rate hikes as it still grapples with a disaster that is piling pressure on families around the nation.

Inflation peaked at 7.8 per cent in November 2022, prompting the Reserve Bank of Australia to deliver 13 rate hikes, lifting the cash rate from an emergency low of 0.1 per cent up to 4.35 per cent.

While inflation cooled across 2024-25 — leading to three rate cuts — it is now back on the rise and mortgage owners are bracing for more pain in the form of three further rate hikes this year.

So while in early 2022 Aussies were dealing with elevated prices at the supermarkets, they at least had cheaper mortgages that were easier to service.

And, looking at Australian Bureau of Statistics Consumer Price Index (CPI) cumulative data to the latest March 2026 release, it appears those grocery prices have kept on rising.

In the four years since Dr Chalmers stood next to that campaign poster, the cumulative damage to the household budget has been brutal. Beef prices have risen by 22.8 per cent, vegetables are up 24.5 per cent, and butter and oil have rocketed by 38.5 per cent — when looking at direct dollar comparisons to the 2022 poster.

This year, the growth rate of the prices of the products on the poster have slowed considerably.

The government has argued direct dollar comparisons are “not fair” because inflation naturally causes prices to grow year-to-year.

It instead points to data showing a dramatic slowdown in the rate of price hikes in recent months — notably vegetables, which spiked at 11.7 per cent through-the-year in May 2022 but grew by just 1.9 per cent in the 12 months up until April this year. Oils and fats grew by 13 per cent in 2022, and actually fell by 0.2 per cent in the past year. Cleaning and maintenance product prices grew by 10.8 per cent in 2022, but only grew 1 per cent in the past year.

Despite a period of lower inflation, it doesn’t mean groceries got cheaper.

Because of compounding inflation, a lower rate of inflation just means the prices are increasing on top of the massively inflated prices of previous years, just at a slower rate.

Add this on top of the interest rate shock for homeowners, and it’s easy to see why Australians are struggling.

Retail expert and Queensland University of Technology professor Gary Mortimer said the 2022 poster is a warning that groceries can “very quickly” inflate for a number of unforeseeable reasons.

“When it comes to food and groceries, there’s lots of input costs that can inflate pretty quickly the retail price,” he told news.com.au.

“Recently we’ve seen the price of cocoa increase and also the price of coffee grains. Cocao was a big one early this year. It was originally about $US2000 a tonne and then it really peaked at almost $US12,000 a tonne. So it went up 600 per cent.

“And that’s why we saw such price increases in chocolate and Easter eggs. We’re seeing that soften up a little bit now, which is good, but it’s still relatively high. The same thing happened with coffee grains.

“So when you think about things like sugar, wheat, grain, they can very quickly inflate.”

A major caveat in these increased prices we’ve had since 2022 is that we’ve seen a war in the Middle East push up oil prices, which passes onto the cost of producing and transporting food, and ultimately to the consumer.

In his budget speech, the Treasurer put the war front and centre of the crisis — one might even suggest he was blaming “international factors beyond our control” — and used it as justification for the billions spent on new cost of living measures, like his modest $250 tax cuts.

In 2022, Labor used the basket of goods placard as a weapon to say the Coalition had lost control of the economy, one of the major arguments that helped the party win that election.

Four years later, global oil shocks, the war in the Middle East and local supply constraints have forced Dr Chalmers to defend the exact same type of grocery increases he once campaigned against.

Prof Mortimer, however, warns that we still haven’t seen the full impact of the fuel crisis on food prices just yet. He said we could see big spikes in the coming six to 12 months, as trucking companies had absorbed a lot of the increased costs so far.

“The Fair Work Commission put forward a mandate for retailers, wholesalers and manufacturers to review their third-party logistics contracts every two weeks rather than when the contracts end,” he said.

“So, I think trucking companies have absorbed that price to some extent, and then manufacturers and retailers have absorbed that cost.

“But I think it’s now getting to a point where you will start to see those costs filter into retail prices. And then, of course, we’ve got increases in insurance, electricity, and utility costs.

“All of those costs continue to inflate, and as they inflate, that puts more pressure on operational costs, which obviously puts more pressure on retail prices.”

Treasurer Jim Chalmers said helping with the cost of living is one of the government’s top priorities.

“It is why we’ve backed higher wages for workers, delivered tax cuts that the Liberals voted against, and provided plenty of cost of living relief like cheaper medicines, cheaper childcare, more Medicare bulk billing, slashing student debt, help with energy bills and help with rents,” he saio in a statement to news.com.au.

“We recognise that Australians are still under pressure and that’s why fighting inflation and helping with the cost of living were both front and centre of the budget.

“We’re delivering more tax cuts for workers including a new round of tax cuts starting in July, help with fuel costs, help for more Australians to get into homes, more funding for public hospitals, cheaper medicines and support for higher wages.”

Inflation suddenly drops for one reason

This week, ABS figures were released showing inflation actually fell in April as it rose in most major advanced economies. Inflation picked up in April in Canada, France, Germany, Italy and the United States.

Markets are now almost universally expecting the Reserve Bank to keep rates on hold at 4.35 per cent at its June meeting, with 95 per cent factoring in a hold.

That is good news for households in the short term, but markets still expect at least one more hike this year.

Meanwhile, Dr Chalmers had some bad news on fuel prices, which had the biggest impact on the slowing inflation rate, according to the ABS.

He virtually ruled out extending the excise reduction on fuel, which came in on April 1, being extended beyond July 1 when it is due to end.

“We’re not anticipating extending that or expecting to extend it, but we keep it under review really from week to week, and that’s because what we’re trying to do here is to provide cost-of-living relief in the most responsible way that we can,” Dr Chalmers told reporters.

Official figures released by the Australian Bureau of Statistics show yearly headline inflation fell from 4.6 per cent in March to 4.2per cent in April.

But the all-important trimmed mean inflation rate – which the RBA watches because it strips out volatile and seasonal items –rose to 3.4 per cent for the 12 months to April, showing underlying price pressures are still in the Australian economy.

Both numbers are still well above the RBA’s target of inflation between 2-3 per cent.

One in five Aussies eating from bins

As the cost of living spirals, the Salvation Army released a new national report this week with some confronting case studies and statistics.

It showed Australians are regularly skipping meals, eating expired food and, in some cases, eating from bins to survive.

Some of the key findings include:

• 91 per cent skipped meals in the past year

• 82 per cent went an entire day without eating

• 60 per cent ate expired or spoiled food

• Nearly 1 in 5 reported eating from bins

• 35 per cent of parents said their children had gone to school hungry

Here are some of the disturbing ancedotes shared in the survey.

“It has been a daily stress, always working out how to ration food to make sure the kids have enough to keep them full every day. The stress of having to pick and choose which bills I can and can’t pay, running out of fuel, and needing to figure out how to get to places,” said a 39-year-old woman from Queensland.

“It has stopped my children and me from leaving the house and seeing anyone, as we simply can’t afford even a simple outing. Even a trip to the park is questionable, as it requires fuel to get there,” said a 33-year-old woman from NSW.

“I feel like a failure to my children. I feel like my life has no value. Instead of enjoying special times like Christmas, my children’s birthdays, or even the tooth fairy, they are just major sources of stress that I start worrying about weeks before they arrive. I’ve lost all confidence and feel ashamed and embarrassed,” said a 49-year-old woman from Victoria.