According to data published by the Australian Bureau of Statistics (ABS) on Wednesday, the consumer price index (CPI), which measures the cost of living, rose 2.1 percent in the March quarter and 5.1 percent for the 12 months to March 2022.
It marks the biggest annual CPI reading since 2001 when a 10-percent goods and services tax (GST) was introduced.
The ABS said the growing cost of living was driven by a 5.7-percent increase in the cost of building a new house and an 11-percent rise in fuel prices.
The cost of food increased by 2.8 percent in the March quarter led by beef and vegetables, the cost of which increased by 7.6 and 6.6 percent, respectively.
"Continued shortages of building supplies and labor, heightened freight costs and ongoing strong demand contributed to price rises for newly built dwellings," said Michelle Marquardt, head of Prices Statistics at the ABS.
"The CPI's automotive fuel series reached a record level for the third consecutive quarter, with fuel price rises seen across all three months of the March quarter."
Responding to the data, Treasurer Josh Frydenberg urged Australians to vote for "strength and stability" at the general election on May 21.
Jim Chalmers, the Opposition Labor Party's Treasury spokesperson, said that "only Labor is taking the challenges in our economy seriously."
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