RBA governor Michele Bullock says federal government’s $300 energy bill rebate is unlikely to affect inflation

The Reserve Bank of Australia’s governor says the federal government’s proposed $300 energy bill relief will not have a “material” impact on reducing inflation, but is also unlikely to make inflation worse.

Appearing at a Senate estimates hearing in Parliament House on Wednesday morning, the RBA governor told the committee that the measure — a centrepiece of May’s federal budget — was unlikely to reduce inflation to a point that would lead to potential rate cuts.

Responding to Nationals Senator Matt Canavan, Michele Bullock said the central bank would “look through” the rebate’s impact on headline inflation and focus on the RBA’s preferred “underlying” measure instead.

“The government’s rebate … might affect people’s expectations, and it also might affect prices that are indexed,” Ms Bullock said.

“But in terms of the underlying pulse of inflation, we’re looking through that to the underlying, the trimmed mean, if you like, and we don’t think it’s going to have an impact on that.”

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