Inflation numbers are bad news for the federal government in Australia.
Labor has made a political virtue out of its promise of returning its budget to surplus this financial year.
Trouble is the slowdown in the mining boom and the general economy has put a big dent in tax revenues.
In a mid-fiscal-year update last week, the federal government announced $A16.4 billion in spending cuts and tax increases over four years in a bid to deliver on the budget promise.
Problem is that means it's hitting the brakes at a time the economy is slowing.
Radio New Zealand's Sydney correspondent says that is why it's counting on the Reserve Bank to hit the accelerator on monetary policy to counter its budget trimming. The CPI numbers throw immediate rates relief into doubt.
