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6401.0 - Consumer Price Index, Australia, Jun 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 25/07/2007   
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JUNE QTR 2007 MAIN CONTRIBUTORS TO CHANGE


MAIN CONTRIBUTORS TO CHANGE


CPI GROUPS

Weighted average of eight capital cities,
Percentage change from previous quarter
Graph: Weighted average of eight capital cities, Percentage change from previous quarter



The discussion of the CPI groups below is ordered in terms of their absolute significance to the change in All groups index points (see tables 6 and 7).



TRANSPORTATION (+3.0%)

The 3.0% rise in transportation costs this quarter was mainly due to the rise in the price of automotive fuel (+9.1%). All other categories in transportation also rose, with motor vehicle repair and servicing (+0.9%) and motor vehicles (+0.2%) being the next most significant contributors.


Automotive fuel prices fell in January (-3.0%), then rose in February (+1.1%), March (+7.6%), April (+1.2%) and May (+3.7%), then fell slightly in June (-0.3%). The automotive fuel expenditure class contributed 0.56 index points to the increase in the All Groups CPI in June quarter 2007 and -0.29 index points to the through the year change.


The following graph shows the pattern of the average daily prices for unleaded petrol for the eight capital cities over the last fifteen months.


Diagram: Transportation (+3.0%)


Through the year to June quarter 2007, the transportation group rose 0.2%, with the main contributors being motor vehicles (+1.4%), motor vehicle repair and servicing (+2.7%) and other motoring charges (+4.8%). The fall in automotive fuel (-4.2%) provided the only offset.



FOOD (+1.7%)

The main contributors to the rise in food prices for the quarter were fruit (+8.4%) and vegetables (+6.1%), with less significant increases in soft drinks, waters and juices (+2.6) and take away and fast foods (+0.8%). Bacon and ham (-2.7%) provided the only significant offset.


The rise in fruit prices was due to significant increases in the prices of bananas (with supplies affected by colder weather in the growing areas), berries, melons and stone fruits. Apples provided the only significant offsetting price fall in fruit. The rise in vegetable prices was due mainly to price increases for fresh vegetables, particularly salad vegetables.


Through the year to June quarter 2007, food prices rose 2.2%, mainly due to increases in take away and fast foods (+4.0%), vegetables (+6.6%), soft drinks, waters and juices (+8.0%) and restaurant meals (+3.2%). The major offsetting annual fall was in fruit (-18.1%) driven by the fall in banana prices from the high levels experienced after Cyclone Larry.



HOUSING (+0.8%)

The rise in housing this quarter was mainly due to increases in both rents (+1.6%) and house purchase (+1.0%). This is the largest quarterly rise in rents since September quarter 1989, when the rise was 2.1%.


Average rents rose in every capital city, with the highest increases in Perth (+2.9%), Darwin (+2.4%), Brisbane (+2.2%) and Canberra (+2.0%). Sydney and Melbourne both showed the lowest increase of 1.3%.


Increases in house purchase prices were recorded in all capital cities, with increases ranging from 0.3% in Canberra to 2.5% in Hobart.


Over the twelve months to June quarter 2007, the housing group rose 3.6%. This rise was mainly attributable to rents (+5.2%), house purchase (+2.7%), and property rates and charges (+5.6%). Annually, housing increases were led by rises in Darwin (+7.3%), Perth (+5.7%) and Brisbane (+5.1%).



HOUSEHOLD CONTENTS AND SERVICES (+1.5%)

Most categories of household contents and services rose this quarter with furniture (+3.9%), towels and linen (+5.5%), glassware, tableware and household utensils (+3.6%) and child care (+1.7%) being the most significant. There were no significant price falls.


The rises in prices for furniture and glassware, towels and linen, and tableware and household utensils were largely due to the ending of widespread discounting associated with post-Christmas and summer sales at major retailers in the March quarter. The rise in the net price of child care across all cities this quarter was mainly due to rises in fees by some providers of private day care.


Through the year to June quarter 2007, the household contents and services group rose 2.1%.



HEALTH (+2.1%)

The rise in health costs was largely due to increases in prices of hospital and medical services (+3.4%) and dental services (+1.4%). These rises were partially offset by a fall in the net cost of pharmaceuticals (-0.4%), mainly due to the effect of the Pharmaceutical Benefits Scheme safety net.


Hospital and medical services rose mainly as a result of increases in private health fund premiums from 1 April 2007.


Through the year to June quarter 2007, the health group rose 4.1% due mainly to an increase in net hospital and medical services (+5.2%).



FINANCIAL AND INSURANCE SERVICES (+0.9%)

All categories of financial and insurance services rose this quarter with deposit and loan facilities (+1.3%), insurance services (+0.8%) and other financial services (+0.4%) all contributing to the increase.


Over the twelve months to June quarter 2007, financial and insurance services rose 1.5%.



ALCOHOL AND TOBACCO (+0.8%)

All four components in the alcohol and tobacco group rose this quarter with the most significant being contributions from beer (+1.8%), and spirits (+1.0%).


The rises in beer and spirit prices are attributed to higher raw materials costs and residual effects of the excise increase in the March quarter. There were small increases in prices of tobacco (+0.3%) and wine (+0.3%).


Through the year to June quarter 2007, the alcohol and tobacco group rose 3.0%, with rises in all categories except wine, which fell 1.0% over the year.



CLOTHING AND FOOTWEAR (+1.4%)

The rise in prices of clothing and footwear this quarter was due to increases in the price of accessories (+6.6%), women's underwear, nightwear and hosiery (+3.7%) and women's outerwear (+1.2%). The most significant offsetting movement was in women's footwear (-3.7%).


Over the twelve months to June quarter 2007, the cost of clothing and footwear rose 0.7%.



RECREATION (-0.4%)

The fall in recreation was due mainly to domestic holiday travel and accommodation (-3.5%). The only significant offsetting price rise was in overseas holiday travel and accommodation (+2.5%).


The fall in domestic holiday travel and accommodation was largely due to seasonal factors as prices receded from the peak season highs seen in March quarter. Decreases in both accommodation and fares contributed to the overall fall. Prices fell in seven of eight capital cities, led by Hobart (-6.1%), Melbourne (-5.7%) and Brisbane (-3.4%). The only city to record a rise was Darwin (+4.0%). Most cities recorded price rises for overseas holiday travel and accommodation, with Darwin (-1.8%) and Perth (-1.6%) being the exceptions.


Annually, Recreation rose 1.0% with the strongest rises in other recreational activities (+5.1%), domestic holiday travel and accommodation (+2.4%) and overseas holiday travel and accommodation (+2.9%).



COMMUNICATION (+0.2%)

The rise in communication costs was mainly due to an increase in the cost of telecommunication (+0.1%).


Over the twelve months to June quarter 2007, the cost of communication rose 1.5%.



TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 2.0% in the June quarter 2007. This component includes goods and services whose prices are largely determined on the world market and represents approximately 42% of the weight of the CPI. The main contributors to the increase were automotive fuel, fruit, vegetables and furniture. The most significant offset was a fall in audio, visual and computing equipment.


The non-tradables component of the CPI rose 0.7% in the March quarter. This component includes goods and services whose prices are largely determined by domestic price pressures and represents approximately 58% of the CPI. Within non-tradables, the services component rose 0.7%, mainly due to increases in hospital and medical services, rents and deposit and loan facilities. The major offset was provided by domestic holiday travel and accommodation. The non-tradable goods component rose 0.6% mainly due to house purchase.


Through the year to June quarter 2007, non-tradables rose 3.4% and tradables rose 0.3%. This compares with rises of 3.5% and 1.0%, respectively, for these components through the year to March quarter 2007.


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