With many consumers facing electricity price increases of between 10 and 20 per cent compared with a year ago, the RBA's assistant governor of economics, Luci Ellis, on Tuesday said the rises were likely to contribute to inflation.

"It is something we're watching," Dr Ellis said at the Citi investment conference in Sydney. "We have stated publicly that we do expect that retail electricity prices will be adding to the CPI."

Even so, Dr Ellis also played down the overall impact on spending, given that for most consumers, energy costs still account for a fairly small proportion of the budget.

As a result, the sharp rises in prices are unlikely to trigger a significant decline in consumer spending.

"I think one of the things that I've observed over the years is that you often have a lot of focus on the big-ticket items that are ostensibly going to make households feel poorer, but then you look at the numbers, and for most households, energy costs are about 4 or 5 per cent," she said.

"For low-income households it is higher, that is true. But this is not a dominant factor within household spending."

Alongside rising electricity costs, households are also facing weak wages growth and high levels of underemployment, which has caused some economists to predict consumer spending will weaken over coming quarters.

Dr Ellis indicated there was more uncertainty over how rising electricity prices could affect business investment, and she said the central bank was working "very intensively" with businesses on how the cost of energy affected decisions on whether to invest. Higher electricity costs could be significant relative to profit margins, she said.

"While for most businesses electricity is a relatively low percentage of their overall costs, when we look at that relative to margins, it may well be much greater," Dr Ellis said.

Dr Ellis was speaking on a panel alongside chief executive of the Business Council of Australia Jennifer Westacott, who reiterated the lobby group's argument that lower corporate taxes were needed to drive business investment.

However, Dr Ellis played down the impact of corporate tax cuts on domestic investors, saying the corporate tax rate was "irrelevant" because of Australia's system of dividend imputation. This policy, which is unusual internationally, means domestic investors receive a tax credit for company taxes already paid.

"From the perspective of the domestic investor, the corporate tax rate is irrelevant, it really just doesn't matter because you get it back anyway through dividend imputation. It really only matters if you're a foreign investor making the choice to invest in Australia versus another economy," Dr Ellis said.