Inflation has dominated the 2025 election campaign, with politicians clamouring to pitch themselves as the answer to the cost-of-living pains voters are suffering.
The coalition has blamed Labor for rising prices and a decline in living standards, while Labor government ministers point out that inflation was rising in 2022 and is now falling.
The economy, however, doesn't conform to parliamentary terms; experts say the reality of the cost of living is more complicated than either Anthony Albanese's or Peter Dutton's talking points.
AAP FactCheck spoke to experts and pulled together the data to help voters cut through the economic spin.
AUSTRALIAN INFLATION UNPACKED
While politicians can make it seem the economy started after the last election, experts said the reality is Australia has seen large upward and downward inflation swings in the past five years.
Oxford Economics Australia's head of macroeconomic forecasting Sean Langcake explained there are numerous reasons for that volatility, but one that's impossible to miss is COVID-19.
At the onset of the pandemic, inflation fell sharply because much of the economy shut down, which artificially reduced total demand and, by extension, price pressures, Mr Langcake said.
Before long, however, inflation began rising, particularly for goods such as furniture, electronics, household appliances, clothing and footwear - all of which are often imported from overseas.
"It became more difficult to get our hands on more goods from overseas, so prices went up," Mr Langcake told AAP FactCheck.
Inflation began rising towards the end of 2020 and then accelerated in 2021, with energy prices also rising after Russia expanded its invasion of Ukraine.
While those issues largely reflect what economists call "supply side factors", there were also inflationary pressures generated by demand as lockdowns ended in 2021, experts said.
Richard Holden, an economist at the University of NSW, said stimulus from governments and the Reserve Bank of Australia (RBA) supported the economy during COVID.
The stimulus also, however, lifted family budgets, priming consumers to buy more goods and services.
"We basically came out of COVID in good shape, but with a lot of fiscal [government] and monetary stimulus still in the system [economy]," Professor Holden told AAP FactCheck.
Mr Langcake said strong domestic demand helped drive up inflation for services in 2022 as well, which partially offset falling goods prices - keeping inflation higher for longer.
Australia wasn't the only country to see a large fall in inflation during lockdown and a big spike as lockdowns lifted; in fact, Australian inflation peaked lower than other economies, including the UK and the US.
However, Stella Huangfu, a macroeconomist at the University of Sydney, told AAP FactCheck that inflation has also taken longer to ease in Australia than in other comparable countries.
THE ROLE OF GOVERNMENT POLICY
There's debate among economists about the role government policy has played in both enabling the rise and slowing the fall in inflation relative to other comparable economies.
Mr Langcake said that government policies during and after the pandemic played a role in influencing inflation, but there are many other factors, including RBA actions.
Dr Huangfu said a key reason inflation has taken longer to fall is the RBA didn't raise interest rates as high as central banks in other nations did over the past three years.
This was a concerted strategy from the RBA, experts said, with governor Michele Bullock explaining the intention was to prevent higher rates due to increasing unemployment.
Prof Holden does think the government has played a leading role alongside the RBA in Australia's inflation outcomes, pointing to expansionary budgets from both major parties.
He said government spending has underpinned higher levels of demand than otherwise, which contributes to the imbalance between demand and supply that can lift inflation.
"[The coalition's] last budget [in 2022] was pretty stimulatory, as an election budget, so there's blame on both sides of politics here," Prof Holden said.
"But then we just saw incredibly stimulatory budgets from the Labor government."
UNPICKING LIVING STANDARDS
The election campaign has also seen claims about living standards across Australia, which are intertwined with inflation because prices determine the purchasing power of families.
But while political slogans make such issues appear straightforward, experts say living standards are complex and can't be measured directly.
Often experts, including at the Organisation for Economic Co-operation and Development (OECD), look at indicators of housing, employment, healthcare and education to assess the wellbeing of households across the economy.
When it comes to material living standards, economist Saul Eslake said one key measure economists examine is real household disposable income (HDI) per capita.
This statistic adjusts household disposable income for inflation and population, indicating how the purchasing power for individual households is changing across the economy.
Mr Eslake said Australia experienced the "largest and most protracted" decline in at least 65 years when real HDI per capita fell sharply between September 2021 and June 2024.
While politicians can make it appear this sharp decline in material living standards occurred after the 2022 federal election, experts say the evidence tells a different story.
Mr Eslake said around a third of the decline occurred under the Morrison government, and two-thirds under the Albanese government.
However, he said it "would be wrong to attribute" the whole decline in either period to actions taken by each government.
The decline in real HDI per capita in Australia has also been relatively large compared to comparable economies globally, but Mr Eslake pointed out there are structural differences.
He said tax brackets are indexed to inflation in the US and UK, which means families haven't experienced the burden of bracket creep to the extent Australian workers have.
Additionally, Mr Eslake said, Australia has a high rate of variable mortgages, making the effects of higher interest rates on budgets more severe than in economies such as the US.
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