Opposition leader Brendan Nelson says the Rudd government's policy is to blame for high inflation figures that have dashed hopes for early interest rate relief.
Financial services charges, petrol, rents and health fund premiums were the main drivers of the inflation result in the June quarter.
Banks were the top offenders, with deposit and loan fees jumping 9.5 per cent in the June quarter, while fuel cost 8.7 per cent more.
But Dr Nelson says the government have not only failed to keep inflation in check, but much of their policies are contributing to the problem.
"After last year's promise to bring down the cost of petrol, groceries and housing, today's figures confirm not only that Labor has failed to deliver on this commitment, but that cost-of-living pressures are actually increasing as a result of (Prime Minister Kevin) Rudd's policies."
The CPI figures included a 6.1 per cent increase in the price of spirits.
The Australian Bureau of Statistics said this was the largest quarterly increase in the price of spirits since the series began in 1980 and predominantly due to the introduction of an increased tax on all pre-mixed spirits from April.
"The Rudd government has claimed the inflation genie is out of the bottle, well today we see the inflation genie is out of the spirit bottle," opposition health spokesman Joe Hockey said.
"Despite what the government says, their budget is inflationary and the 6.1 per cent increase in the price of spirits clearly shows this."
He said the tax on ready-to-drink beverages was an "ill-conceived" measure and nothing more than a $3 billion "tax grab".
Opposition treasury spokesman Malcolm Turnbull said upcoming increases in the luxury car tax and changes to the Medicare levy surcharge would further increase pressure on the CPI.
He said the coalition was confident the RBA would manage the inflation problem, much of which was generated by external factors such as increases in the price of fuel.
"We’ve seen in the inflation figures today the proof that the Budget, Mr Swan’s Budget, far from putting downward pressure on inflation has in fact added to inflationary pressures.
"It wasn’t global forces that forced him to go on a $3 billion tax grab on RTDs that’s put up the price of spirits overall, its added to inflation that’s part of the CPI.
"It isn’t global forces that have caused them to change the Medicare surcharge levy, that will in due course raise private health insurance rates.
"And it isn’t global forces that caused them to put a tax on so-called luxury cars that will also add to inflation just as we predicted it would at the time of the Budget.
"So, Wayne Swan is not an inflation fighter at all, he’s added upward pressure to inflation."
A flood of weaker economic figures in recent weeks had raised hopes that 12-year high interest rates had done enough to stem the inflation flow.
Some economists had gone so far as to tip a rate cut by the years end, but today's CPI data, along with data released by the Reserve Bank suggest those predictions may have been premature.
Federal Treasurer Wayne Swan said the new figures show Australia is facing a "long term challenge" to put downward pressure on inflation, and has warned the banks to carefully consider interest rate rises outside of official adjustments.
Mr Swan said the inflation issue is stemming from problems spread throughout the economy and there is no point in trying to ''sugar coat'' the problem.
"We inherited inflation at a 16 year high," Mr Swan said. "Now that didn't happen overnight, it's been building for a long time and it will take time to deal with."