Bills
Electricity inflation fell from 22.4 per cent to 6.1 per cent in a month. Almost none of that is about what power costs
The Australian Bureau of Statistics published the July 2026 Consumer Price Index at 11.30am on 26 August 2026. Annual electricity inflation came in at 6.1 per cent, down from 22.4 per cent a month earlier. That is one of the largest single-month moves you will see in a price series, and the ABS explains both the level and the collapse the same way: rebates. Not generation, not networks, not retail margins. When and whether governments paid a credit into your account.
What the ABS actually published
Headline first, for context. The Consumer Price Index (CPI) rose 3.5%, down from 3.8% in
the 12 months to June 2026
, and Trimmed mean inflation was 3.6%, unchanged from 3.6% in
the 12 months to June 2026
. Within the month,
In the month of July, the CPI rose 1.0% in original and 0.6% in seasonally adjusted terms
.
Electricity sits inside the Housing group, which rose 5.0 per cent over the year. The ABS
names its drivers: The main contributors to the annual rise were New dwellings (+5.7%), Rents
(+3.6%) and Electricity (+6.1%)
.
Then the sentence that matters most to anyone paying a power bill:
The annual rise of 6.1% in electricity costs is largely due to the ending of Commonwealth and
State Government electricity rebates
. And immediately after it:
This is down from a 22.4% rise in the 12 months to June 2026 mainly due to the timing of
rebate payments in 2025
.
Read that twice, because it says something odd
Both halves of the electricity story are attributed to rebates, and they point in opposite directions. The rise is because rebates ended, so the price a household sees went back up toward the unsubsidised price. The fall in the rise is because of when rebates were paid in 2025, which changes what this year is being compared against.
Neither explanation is about the cost of producing or delivering electricity. A number that most people will read as "power got 6.1 per cent dearer" is, on the statistician's own account, mostly a record of government payments switching on and off.
The part that will confuse people, and we are not going to pretend it away
In the same release: Prices for Electricity fell 1.6% in monthly terms following annual
price reviews
. July is the month benchmark prices reset. We wrote up
what changed on your power bill on 1 July at the
time, region by region.
And the two utilities beside it went the other way in the same clause:
prices for Water and sewerage (+5.8%) and Gas and other household fuels (+2.8%) rose
following annual price reviews
. So the ABS attributes a rise in two utilities and a fall in
the third to the same cause, in the same sentence.
We are not going to invent a mechanism for that. The release does not give one beyond the words quoted, and the honest position is that the monthly electricity fall is stated but not explained in this publication. If you want to know why your own bill went up in July while the national electricity index went down, the answer is not in this document, and anyone telling you it is has not read it.
Why this matters beyond one month
Rebates are temporary by design. Every one of them eventually ends, and when it does the measured price jumps even though nothing about supply has changed. That means the electricity line in the inflation figures will keep swinging on political decisions rather than on the energy system, and it will keep being reported as though it measures the cost of power.
For a household deciding whether to put solar on the roof or a battery on the wall, the inflation number is close to useless as a signal. It tells you about subsidy timing. The things that actually move a bill over a decade, network charges, tariff structure and how much of your own generation you use, are not what this series is tracking.
One more thing in the release, worth diarising
Buried in the update notes: Commencing from February 2027, the CPI will be published on the
fourth Wednesday of each month
, rather than the final Wednesday. A small administrative
change, and the sort of thing that quietly breaks anybody's calendar reminders next year.
Our view
Labelled as opinion, resting on the figures above. The ABS has done nothing wrong here. It measures what households actually pay, and if a government pays part of the bill then what they pay really does fall. The problem is entirely in the reading. An electricity figure that moves 16 percentage points in a month without any change in the cost of electricity is a number that should come with a warning, and the warning exists, in the release, in a sentence most coverage will not quote.
Our practical suggestion is narrow: when you see an electricity inflation figure, ask what happened to rebates in the comparison period before you conclude anything about the price of power. On this release, that question accounts for nearly all of it.
What this does not tell you
These are national figures. They are not your bill, not your state, and not your retailer, and the CPI does not publish a figure for what any individual household pays. We have quoted the ABS rather than paraphrasing where the wording carries the caveat, because "largely due to" and "mainly due to" are doing real work in those sentences. We have not modelled anything and have not sought comment from the ABS. Nothing here forecasts what electricity prices will do next.
Sources
- Australian Bureau of Statistics, Consumer Price Index, Australia, July 2026 (released 26 August 2026 at 11.30am AEST, read the same day): the headline annual CPI of 3.5 per cent and the fall from 3.8 per cent, the trimmed mean of 3.6 per cent, the monthly movements of 1.0 per cent original and 0.6 per cent seasonally adjusted, the Housing group rise of 5.0 per cent and its three named contributors, the 6.1 per cent annual electricity figure and its attribution to the ending of Commonwealth and state rebates, the fall from 22.4 per cent and its attribution to the timing of rebate payments in 2025, the monthly falls and rises for electricity, gas and water following annual price reviews, and the note that from February 2027 the CPI moves to the fourth Wednesday of each month.
How we did this. Every figure and quotation comes from the ABS release itself, read on the day it was published, rather than from any summary of it. Percentages are the ABS's own and are quoted as published. The headline figures were checked a second way against the time series printed in the same release, where July 2026 shows a 1.0 per cent monthly change and a 3.5 per cent annual change, matching the key statistics. Where the release states something without explaining it, this page says so rather than supplying a mechanism: the 1.6 per cent monthly fall in electricity is reported exactly as the ABS reports it. No individual, company or retailer is named or criticised here, and the subject is a published national statistic.
See something wrong? Request a correction and we will check it against the ABS release and log the outcome here.