The worst of the inflationary spike resulting in cost of living increases could be behind Australians, with the treasurer expecting the peak to have passed. The latest inflation figures are due out this week and Treasurer Jim Chalmers says he's hoping they will begin to moderate soon after spiking throughout last year. Dr Chalmers said despite the Treasury and the Reserve Bank estimates of a December quarter peak, cost of living pressures will still continue to bite. "We've still got a big inflation challenge in our economy even as we get to the other side of the peak," he told Sky News on Sunday. "Inflation will be higher than we'd like for longer than we'd like, that's just the reality." The predictions came off the back of shipping and housing costs dropping quicker than anticipated. Dr Chalmers said that cost of living relief will feature in the budget, but the government is being careful to not add fuel to the inflation fire. "We want inflation to moderate as soon as it can," he said. "A big part of our focus in our budget and in our economic plan is how we provide responsible cost of living relief and grow the economy without adding to these inflationary pressures." Opposition Leader Peter Dutton said the government had underestimated the cost of living pressures that businesses and workers were facing. He said Australians will face a tougher 2023 due to Labor's intervention in the energy market. "The treasurer is trying to put all sorts of spin on what will be in the May budget," he told Sky News. "They're making decisions, including in the energy policy area, that will have upward pressure on bills and will introduce a lack of reliability within the system. "That's going to be a disaster for small businesses and manufacturing who will just take their manufacturing offshore." But Dr Chalmers insists the decision to cap coal and gas prices at the end of last year was a necessary intervention by the government. Treasury analysis conducted using data from the Australian Stock Exchange before and after the market intervention found that wholesale electricity prices should rise by less than initially predicted. Updated Treasury forecasts have prices in Queensland coming in at 44 per cent lower than predicted, 38 per cent lower in NSW, 32 per cent lower in South Australia and 29 per cent lower in Victoria. "We expect it to make a meaningful difference to these price increases that were forecast in the October budget," Dr Chalmers said of the intervention. "Our objective here is to try and moderate, to try and take the sting out of, to try and take the edge off some of these (energy) price rises ... through 2023." Australian Associated Press
