Inflation Calculator Australia
See what $100,000 needs to become to buy the same things later — and what it is worth if you leave it as cash.
| Total Inflation | 0% |
| Value of $1 Today in Future Dollars | $1.00 |
How Inflation Erodes Purchasing Power
Inflation is the rate at which the general level of prices rises over time. When inflation is 3% per year, something that costs $100 today will cost $103 in a year, $134 in ten years, and $181 in twenty years. Your dollars don't shrink — but what each one buys does.
The Inflation Formula
FV = PV × (1 + rate)^years
This tells you how much money you will need in the future to have the same purchasing power as PV today. The flip side — how much a fixed sum will be worth in today's terms — is PV ÷ (1 + rate)^years, and the purchasing power lost is 1 − 1/(1 + rate)^years.
A worked example
Say you have $100,000 today and want to know what it needs to grow to over 20 years at 3% inflation just to stand still. Using the formula: FV = 100,000 × (1.03)20 = $180,611. That's 80.6% total inflation over the period. Turn it around and the same $100,000, left untouched, would buy only $55,368 worth of today's goods in 20 years — nearly half your purchasing power gone to a rate most people barely notice. Plug your own figures into the calculator above.
Shorten the horizon and the same arithmetic still bites. Over 10 years at 3.0%, that $100,000 needs to become $134,392 to buy the same things — prices rise 34.4% across the decade, so a dollar today needs $1.34 to keep pace.
Inflation in Australia
The RBA targets CPI inflation of 2–3% over the medium term, and over the past 30 years average Australian inflation has been about 2.5% — which is why 2.5–3% is a reasonable assumption for long-range planning. The recent picture is less settled. Inflation peaked near 7.8% in late 2022 (the highest since the early 1990s), fell back through 2023–24, and has since refused to settle inside the band. Headline CPI slid from 4.2% in April 2026 to 3.5% in July, then jumped back to 4.0% in the year to August 2026. Underlying (trimmed mean) inflation told a flatter and less comfortable story: 3.6% in each of June, July and August.
| Year to | Headline CPI | Trimmed mean |
|---|---|---|
| April 2026 | 4.2% | 3.4% |
| May 2026 | 4.0% | 3.5% |
| June 2026 | 3.8% | 3.6% |
| July 2026 | 3.5% | 3.6% |
| August 2026 | 4.0% | 3.6% |
A single month of headline movement can be fuel or airfares. Three flat months of trimmed mean is the persistent trend, and the trimmed mean is the series the RBA weighs most heavily — which is the context for the Bank raising the cash rate to 4.60% on 29 September 2026, its fourth increase of the year. Behind the August figure, Housing was the largest contributor at 5.7%. If you are about to buy, stamp duty is a separate one-off and each state runs its own scale: NSW, Victoria, Queensland, South Australia, Western Australia, Tasmania, the Northern Territory and the ACT. Housing's 5.7% was the rise for the year, eased from 6.8% in June, with Transport close behind at 5.6% after fuel turned from a drag into a driver — Transport was flat at 0.1% in the year to June. Alcohol and tobacco rose 4.8%, Education 4.7%, Health 3.9%, Insurance and financial services 3.5%, Food and non-alcoholic beverages 3.0% and Recreation and culture 2.9%. One series note worth keeping straight: the ABS retired its Monthly CPI Indicator after the September 2025 reference month, so these figures come from the complete monthly Consumer Price Index, Australia.
Sources: Australian Bureau of Statistics — Consumer Price Index, Australia, August 2026 (reference period August 2026, released 30 September 2026) · Reserve Bank of Australia — Monetary Policy Decision, 29 September 2026 (cash rate raised to 4.60%)
Real vs Nominal Returns
When evaluating investments, the real return (after inflation) matters more than the nominal return. A savings account or term deposit earning 5% with inflation at 4.0% (the August 2026 headline rate) delivers a real return of only about 1.0%. Shares have historically delivered 7–9% nominal, or roughly 4–6% real — well ahead of inflation over long periods. Our compound interest calculator shows whether your savings are actually outpacing inflation or just keeping up in name.
What Inflation Does to $10,000
Two views of the same $10,000, from the calculator's formula: what it must grow to just to preserve today's purchasing power, and what it would actually be worth in today's dollars if left as cash. The gap widens fast with both time and the rate.
| Horizon | Must grow to (3%) | Real value (3%) | Must grow to (4%) | Real value (4%) |
|---|---|---|---|---|
| 5 years | $11,593 | $8,626 | $12,167 | $8,219 |
| 10 years | $13,439 | $7,441 | $14,802 | $6,756 |
| 20 years | $18,061 | $5,537 | $21,911 | $4,564 |
| 30 years | $24,273 | $4,120 | $32,434 | $3,083 |
At 3% over 30 years, $10,000 in a drawer keeps barely 40 cents in the dollar of its buying power; at 4% it keeps under 31 cents. That's the case for not holding more cash than you need. Size the buffer with the emergency fund calculator, check a term deposit against the current 4.0% headline figure, and see what rising prices do to a retirement date in when you can retire and the minimum pension drawdown. A month-by-month version of the same problem is the budget planner.