The -1.9% plunge in the headline consumer price index (CPI) smashed the -1.5% decrease recorded in the December quarter of 1953. 

"This was the largest quarterly fall in the 72 year history of the CPI," said Chief Economist for the ABS, Bruce Hockman.

This was driven by the impacts of the COVID-19 pandemic which squashed consumer demand for many products.

The ABS said COVID impacts via temporary free childcare, healthcare premium and rental deferrals, petrol prices and travel bans all contributed to the steep fall, while alcohol and tobacco were among the few products that increased in price. 

Childcare costs plunged -95%, followed by petrol prices (-19.3%), and pre-school and primary education (-16.2%). 

Mr Hockman said if it weren't for this, CPI would have risen albeit marginally.

"Excluding these three components, the CPI would have risen 0.1 per cent in the June quarter."

It brings the annual inflation rate to -0.3%, falling well outside the Reserve Bank's inflation target range of between 2-3%. 

"Since 1949, this was only the third time annual inflation has been negative. The previous times were in 1962 and 1997-98," Mr Hockman said.

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Provider

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  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.75% p.a on their savings rate balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.20%
Disclosure

Savings Accelerator

  • Special offer: Savings Accelerator (Kick Starter offer).
  • For a limited time, new ING customers can get a bonus 0.75% p.a on their savings rate balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
  • If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.20%
Disclosure
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  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
Disclosure

High Interest Savings Account (<$250k)

  • Bonus rate for the first 4 months from account opening
  • No account keeping fees
  • No minimum balance
Disclosure
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*Score $20 using code SWIPE20
  • Sign up with code SWIPE20 to score $20 after 5 card purchases in your first 30 days. *See terms on the app store
  • Deposit $500+ per month from an external source to earn the bonus interest.
  • Tiered rates apply to savings balances.
Disclosure
*Score $20 using code SWIPE20

Save Account

  • Sign up with code SWIPE20 to score $20 after 5 card purchases in your first 30 days. *See terms on the app store
  • Deposit $500+ per month from an external source to earn the bonus interest.
  • Tiered rates apply to savings balances.
Disclosure
4000$product[$field["value"]]$product[$field["value"]]$product[$field["value"]]More details

Hi Saver

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    Bonus Saver

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      Online Saver

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        Up Saver Account

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          Qsaver

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            Bonus Saver Account

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              Bonus Saver

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                Maxi Saver

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                  Bonus Saver Account

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                    Netsave Account

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                      Growth Saver

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                        Simple Saver

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                          Virgin Money Boost Saver

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                            HomeME Savings Account (<$100k)

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                              Online Savings - Premium Saver

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                                mySaver

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                                  Online Savings Account

                                    Important Information and Comparison Rate Warning

                                    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of July 13, 2025. View disclaimer.

                                    Important Information and Comparison Rate Warning

                                    Notable price increases driven on the back of increased spending during the COVID-19 pandemic include cleaning products (+6.2%), toilet paper (+4.5%), furniture (+3.8%); major household appliances (+3.0%) and audio, visual and computing equipment (+1.8%).

                                    The figures from the ABS fell just shy of economists predictions.

                                    Westpac economists had forecast a -2.4% decline in the June quarter CPI, while the rest of the market had predicted a -2% fall.

                                    Westpac senior economist Justin Smirk said the pandemic has extinguished hopes of a recovery.

                                    "Despite many of the shocks being one offs that are set to be reversed, the COVID shutdown has shifted what we thought were signs of a recovery to a broader mixed outcome with signs of a underlying deflationary trend in many series again in Q3," Mr Smirk said.

                                    "Looking at the big one offs it is important to distinguish which are policy induced (so there should be a quick rebound to previous levels as short-term assistance is unwound) and those induced by the collapse in demand (fuel prices due to the collapse in crude prices) which have already seen something of a rebound so far through the September quarter.

                                    "These prices are not expected to make a full recovery any time soon."

                                    Mr Smirk said the bank expects the CPI to bounce back by 2.1% in the next quarter, but warns it may not be enough.

                                    "Even if we see the expected significant bounce in Q3 associated with the unwinding of government assistances packages, it will not be enough to drive a meaningful lift in underlying inflationary momentum."