Carbon tax axe aiding economy: Cormann

Finance Minister Mathias Cormann says the latest inflation figures shows how axing the carbon tax has reduced cost of living pressures.

The consumer price index rose just 0.5 per cent in the September quarter, which helped lower the annual rate to 2.3 per cent from 3.0 per cent three months earlier.

It was the first official inflation reading since the Abbott government scrapped the carbon tax.

The Australian Bureau of Statistics said a 5.1 per cent drop in electricity prices was a key factor in the quarterly result.

Senator Cormann, standing in for Treasurer Joe Hockey who is in China, said this is the single largest quarterly fall in electricity prices since ABS electronic records began in September 1980.

"Scrapping the carbon tax was always about reducing cost of living pressures and passing the savings onto families and businesses," Senator Cormann said in statement on Wednesday.

"Today's consumer price index shows these benefits are making their way through the economy."