Wednesday 1 June 2022 05:04 AM Labor Treasurer Jim Chalmers economy electricity prices inflation petrol ... trends now

Australian electricity bills are expected to double in July following a surge in wholesales prices with new Treasurer Jim Chalmers warning of 'skyrocketing inflation'.

In the year to March, wholesale electricity prices soared by 141 per cent, prompting one power company boss to urge his 70,000 customers to switch provider.

Financial comparison group Finder is predicting electricity prices to climb by up to 100 per cent from July 1, effectively doubling the price.

An interest rate rise in May - the first since November 2010 - has caused the first national fall in Australia house prices since September 2020 - the era before the Reserve Bank slashed the cash rate to a record-low of 0.1 per cent. 

In his first media conference as treasurer, Mr Chalmers warned of economic troubles with inflation climbing by 5.1 per cent - the fastest pace in two decades.

'This perfect storm of energy price spikes is doing enormous damage to our employers, to our households and to our national economy,' he said.

'There are far more troubling aspects in our economy: skyrocketing inflation is a big challenge.'

Australia's economy grew by 0.8 per cent in the March quarter, a big drop from 3.6 per cent in the final three months of 2021 following the end of lockdowns in Sydney and Melbourne.

But wages are growing by just 2.4 per cent - less than half the headline inflation rate of 5.1 per cent, Australian Bureau of Statistics data showed.

The Reserve Bank of Australia is expected to raise interest rates seven more times in the coming year, with Westpac expecting a 2.25 per cent cash rate by May 2023, up from 0.35 per cent now.

'Falling real wages is a big challenge, the impact of interest rate rises the Reserve Bank governor has flagged - big challenge,' Mr Chalmers said.

RBA Governor Philip Lowe last month raised the cash rate by a quarter of a percentage point to 0.35 per cent, breaking a repeated promise to leave rates untouched until 2024 'at the earliest'. 

Prime Minister Anthony Albanese wants the Fair Work Commission to award a pay rise to Australia's 2.7 million minimum wage and low-paid award workers that is in line with inflation.

This is occurring as power companies prepare to put up their prices from July 1, with Australian Energy Market Operator data showing a 141 per cent surge in wholesale prices to $87 in the year to March.

Mr Chalmers blamed the previous Coalition's government's failed energy policies for the price surge.