This is what you get from living in a free market economy, unlike Malaysia, where it is a controlled economy. Free fall price rises and falls.
In the days of old, there were the 2 camps: a planned economy (think the Soviet Union, China, Cuba, North Korea and gang) and a free economy (UK, USA, Sweden, NZ etc). Malaysia (like many countries in the region) has opted for a controlled economy, where the price of essentials are set by the government, and prices kept low by government intervention (read: subsides).
So when calculating the CPI and the inflation rate, a basket of, you guessed it, essentials is used, from food to petrol. In Malaysia, that is convinently kept in control by a controlled economy. While in Australia, it is set my market forces (and some say, the duopoly between Woolies and Coles).
But even my grandmother can tell you that overall cost of living has gone up by more than 3%, no matter what Zeti says. (http://biz.thestar.com.my/news/story.asp?file=/2008/4/26/business/21072504&sec=business)
Its easy to blame food prices in the international markets without checking the fundimentals of a country's economy.
So you say that inflation in Australia is bad, but is it any better in Malaysia? You say that milk has gone up from 1.90 to 2.10 for 1 liters, but my bowl of kolo mee has gone up from RM 2.20 to 2.50 in about the same time.
And why the RM has been weak? The US$ is partly to blame, but its also due to the fact that a weak RM is in the interest of the Malaysian economy.
ohya kolok meee 2.20 to 2.50.
no comment; but in free economy; anything can be worst if you dont have enough reserve.