Leading economists are criticising coalition claims that inflation has doubled under Labor, saying politicians are overplaying the influence governments have over the economy.
The coalition has distributed a graphic on social media stating that average inflation when it was last in power - 2013 to 2022 - was 2.2 per cent, compared to 4.1 per cent under Labor, from mid-2022.
“Life is more expensive under Labor,” the graphic says.
“Inflation has doubled under Labor,” added opposition frontbencher Ted O’Brien, who was one of the coalition figures to share the post.
But experts told AAP FactCheck the claim is misleading as it overplays the influence governments have on inflation, particularly given global conditions following COVID-19.
They also noted inflation was at 6.1 per cent when the coalition lost power. It peaked shortly after and has been reducing ever since under Labor.
“I don’t think this is a fair or meaningful comparison,” associate professor of economics at the University of Sydney, Stella Huangfu, said.
“Inflation in Australia was driven by multiple factors, primarily supply chain disruptions caused by COVID-19.
“In fact, all major economies - including the US, UK, and Canada - experienced high inflation from around May 2022. Given this broader global context, it doesn’t make sense to attribute inflation solely to Labor.”
University of Western Australia professor Jakob Madsen, said the claim was “a joke” and it would be more relevant to compare Australia’s inflation against other similar economies.
Economist Saul Eslake said the claim didn't follow as a matter of logic or economics.
“It rather reminds me of being told in my first-year statistics class about the British researcher who found a correlation between the number of storks off the north coast of Wales and the British birth rate."
Inflation was consistently around two per cent for several years prior to the pandemic, when it nose-dived, Mr Eslake said.
It then shot up, reaching 6.1 per cent when the coalition lost power. It peaked at 7.8 per cent - just two quarters after Labor won - and has been reducing ever since.
Mr Eslake said inflation is a “lagging indicator” in that it tends to reflect matters that have happened in the economy during earlier periods.
“To the extent that any government should shoulder the blame for inflation, most of the blame for this spurt in inflation should be sheeted home to the previous coalition government, not the current Labor government,” Mr Eslake said.
Both the coalition and Labor are attempting to use inflation as an indicator of how they have managed - and their opponents have mismanaged - the economy.
On Sunday, Peter Dutton suggested a minority Labor government would fuel inflation through increased taxation and spending.
Prime Minister Anthony Albanese contrasted that message on Monday by focusing on easing price growth.
“Inflation’s going down,” Mr Albanese said.
“When we were elected, interest rates had started to rise, now they’ve started to fall.”
Prof Madsen said both parties were overplaying the influence governments had over the economy ahead of an election that’s slated to focus intensely on the rising cost of living.
