Scott Morrison has conceded prices are rising on everyday items, but stressed that's due to external factors.
As Opposition Leader Anthony Albanese emerged from COVID-19 isolation on Friday, the campaign trail focus returned to the rising cost of living.
The prime minister said increasing inflation levels and stress on household budgets were because of factors overseas and outside government control.
"The external influences on the economy are going to continue for some time, particularly when we see the disruption of the war in Europe and the disruption which comes from the pandemic," he told reporters in Tasmania on Friday.
"You can't necessarily change the price of a lettuce, but what you can do is you can halve the petrol tax, and that's exactly what we did."
Australia's Inflation rate has risen to 5.1 per cent, the highest level in two decades, which has prompted speculation the Reserve Bank will lift interest rates for the first time in 12 years when it next meets on Tuesday.
Shadow treasurer Jim Chalmers said the coalition was ignoring cost of living pressures.
"(The government) want to talk about international comparisons, Australians couldn't give a stuff what inflation is in the United States," Dr Chalmers told reporters in the Sydney electorate of Reid.
"Australians know that what really matters here is that it's harder and harder for them to keep up, and almost impossible to get ahead."
Treasurer Josh Frydenberg defended the government's handling of the economy, but denied he was seeking to suggest the Reserve Bank hold off on raising interest rates until key wage figures come out later in May.
"I'm not saying that I will pre-empt in any way a decision of an independent board, namely of the Reserve Bank," he told ABC Radio.
"That is a decision for them, or them not to take at their upcoming meeting."
The treasurer said there was no silver bullet for many of the issues facing the Australian economy, such as workforce shortages, but the country's finances were tracking well.
Concerns on cost of living pressures have also extended to power prices, with new figures showing wholesale power prices rising by 141 per cent in the first three months of this year compared to the same time period in 2021.
As the prime minister announced a $70 million hydrogen hub in Tasmania, Mr Morrison dismissed calls that power prices would be better protected if there were more renewables in the energy mix.
"We have made a very fast transition, we have had record investments and increases in the capacity of renewable technologies and renewable energies. That hasn't been the issue," he said.
"The issue is ensuring that we keep pace with reliable, affordable baseload power that deals with the problem, with the 'intermittentness' of much of our renewable energy generation."
Dr Chalmers pledged Labor would bring down power prices by 2025 should it win office.
Mr Albanese spent his first day out of isolation in Sydney, before flying to Western Australia ahead of Labor's campaign launch in Perth on Sunday.
