The guts of this problem is the definition of "CPI". The RBA is bound by targets it agrees with the Treasurer, as set out in the Statement on the Conduct of Monetary Policy (last issued on 8th December 2023). The Banking Act 1959 (Cth) does not specifically state that CPI should be targeted (to be within a specific band), thus the Statement states that "an appropriate goal is consumer price inflation between 2 and 3 percent". RBA Governor interpretations differ on the definition, with conservative Governors (such as Bullock) opting for the trimmed mean annual inflation (which,alegedly, reduces the effect of irregular or temporary price changes that can impact CPI). But it could easily be argued by Chalmers that "real" inflation does indeed include irregular influences, such as electricity rebates, as "cash in pocket" (thus spending power) increases when CPI is lower, without having to wait for the trimmed mean to be lower (i.e. Broad money increases).
Putting that into plain English: there is sufficient evidence to argue that "trend CPI" is sufficiently under 3% to allow for a cut in rates, if it is necessary. So the key question is not "can they" but "should they" cut rates.
