6401.0 - Consumer Price Index, Australia, Dec 2010 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 25/01/2011   
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MAIN CONTRIBUTORS TO CHANGE


CPI GROUPS

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

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



FOOD (+2.2%)

The food group recorded an increase in the December quarter 2010. The most significant contributors were fruit (+15.5%) and vegetables (+11.4%). Seasonal factors and limited supply contributed to price rises in both fruit and vegetables. Beef and veal (-3.7%) provided the most significant offset.

Over the twelve months to the December quarter 2010, sixteen out of the twenty six food categories rose contributing to a 2.5% price rise across the food group. Increases were mainly driven by general price rises in vegetables (+12.8%) and take away and fast foods (+2.8%). Food n.e.c. (-2.9%) recorded the most significant offsetting price movement.


HOUSING (+0.6%)

The housing group recorded an increase in the December quarter 2010. The main contributors to the movement were house purchase (+0.7%), rents (+0.8%), electricity (+0.9%) and house repairs and maintenance (+0.8%). Gas and other household fuels (-0.5%) provided a partially offsetting fall.

Over the twelve months to the December quarter 2010, the housing group rose 5.0% with increases in all categories. The main contributors were electricity (+12.5%), rents (+4.2%), house purchase (+2.9%) and water and sewerage (+12.8%).


CLOTHING AND FOOTWEAR (-1.9%)

The clothing and footwear group recorded a decrease in the December quarter 2010. The main contributors to the movement were women's outerwear (-2.6%), accessories (-3.5%) and men's underwear, nightwear and socks (-7.1%).

Over the twelve months to the December quarter 2010, the clothing and footwear group fell 4.8%. The decrease was mainly due to falls in women's outerwear (-6.6%), men's outerwear (-5.3%), children's and infants' clothing (-8.0%) and accessories (-3.6%). Clothing services and shoe repair (+3.2%) recorded the largest offsetting annual rise. The general rate of customs duty on textile, clothing and footwear imports was reduced from 17.5% to 10.0% on 1 January 2010.


HEALTH (-1.2%)

The health group recorded a decrease in the December quarter 2010 with all capital cities registering a fall. The main contributor was pharmaceuticals (-6.2%) due to the effect of the Pharmaceutical Benefits Scheme safety net.

Over the twelve months to the December quarter 2010, the health group rose 5.0% due to increases in hospital and medical services (+6.9%), dental services (+3.5%) and pharmaceuticals (+0.8%).


ALCOHOL AND TOBACCO (+0.8%)

The alcohol and tobacco group recorded an increase in the December quarter 2010, with rises in tobacco (+1.2%), spirits (+1.0%), and beer (+0.6%).

Over the twelve months to the December quarter 2010, the alcohol and tobacco group rose 11.4% predominantly due to the effect of the 25% increase in federal excise on tobacco implemented on 30 April 2010.


HOUSEHOLD CONTENTS AND SERVICES (-0.6%)

The household contents and services group fell in the December quarter 2010, with falls in other household supplies (-1.2%) and glassware, tableware and household utensils (-2.9%). Child care (+1.1%) provided the largest offsetting increase.

Over the twelve months to the December quarter 2010, the household contents and services group fell 0.2%. This decrease was predominantly due to falls in major household appliances (-3.9%) and furniture (-1.2%).


TRANSPORTATION (+0.2%)

The main contributors to the increase in the transportation group in the December quarter 2010 were automotive fuel (+2.1%) and other motoring charges (+2.8%). Motor vehicles (-1.0%) and motor vehicle repair and servicing (-1.9%) recorded partially offsetting falls.

Automotive fuel fell in July (-1.6%), August (-1.0%) and September (-2.9%), rose in October (+2.5%), November (+0.8%) and December (+4.2%).

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 (+0.2%)

Over the twelve months to the December quarter 2010, the transportation group rose 1.7% primarily due to increases in automotive fuel (+4.7%), other motoring charges (+8.1%) and urban transport fares (+2.4%). Motor vehicles (-1.5%) recorded the most significant offsetting fall.


FINANCIAL AND INSURANCE SERVICES (-0.4%)

The main contributor to the decrease in the financial and insurance services group this quarter was deposit and loan facilities (-1.3%), which include both direct fees and prices derived from interest rate margins. The price of services charged by financial institutions varies across the range of products covered in the CPI. There was a decrease in the price of services charged on loan products. This was partially offset by an increase in the price of services charged on some deposit products. For more details on calculating prices of financial services, please see the appendix in the June quarter 2008 publication.

Insurance services recorded an increase of 0.5%, driven mainly by higher premiums for house insurance as a result of severe weather conditions in some cities. Other financial services also recorded an increase (+0.1%).

Over the 12 months to the December quarter 2010, the financial and insurance services group recorded an increase of 2.2%. This was due to increases in deposit and loan facilities (+2.1%), insurance services (+3.5%) and other financial services (+1.9%).


RECREATION (+0.2%)

The rise in the recreation group in the December quarter 2010 was mainly due to increases in domestic holiday travel and accommodation (+3.8%). This was driven by widespread seasonal price rises for Hobart (+7.1%), Adelaide (+6.9%), Canberra (+5.1%) and Perth (+5.8%). The most significant offset was recorded in audio, visual and computing equipment (-4.8%).

Over the twelve months to the December quarter 2010, the recreation group fell 1.9%. The main contributor to the movement was audio, visual and computing equipment (-18.3%). This was partially offset by a rise in other recreational activities (+2.6%).

In the CPI airfares are collected in advance (at the time of payment), but only used in the CPI in the quarter in which the trip is undertaken. Overseas airfares are collected two months in advance (October for travel in December) and domestic airfares are collected one month in advance (October for November).


COMMUNICATION (+0.1%)

The communication group recorded a rise in the December quarter 2010. Increases in fixed phones and mobile phones were partially offset by a decrease in the price of internet services.

In the twelve months to the December quarter 2010 the communication group recorded a fall of 0.4% due to a decrease in telecommunications (-0.6%).


EDUCATION GROUP (0.0%)

The education group reported no movement in the December quarter 2010.

Over the twelve months to the December quarter 2010, the education group rose 5.7%.


TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 0.3% in the December quarter 2010. Prices for the goods and services in this component are largely determined on the world market. The tradables component represents approximately 42% of the weight of the CPI. The most significant contributors to the 0.3% rise in the tradable goods component were fruit, vegetables, automotive fuel, tobacco, cheese and spirits. The most significant offsetting falls were in pharmaceuticals, motor vehicles, audio, visual and computing equipment and women's outerwear. The decrease in the tradable services component of 0.7% was driven by overseas holiday travel and accommodation.

The non-tradables component of the All groups CPI rose 0.4% in the December quarter 2010. Prices for the goods and services in this component are largely determined by domestic price pressures. The non-tradables component represents approximately 58% of the CPI. The non-tradable goods component rose 0.6% mainly due to price increases for house purchase, take away and fast foods, electricity and beer. The most significant offsetting movements were gas and other household fuels and milk. The non-tradable services component rose 0.4%, due to increases in domestic holiday travel and accommodation, rents, other motoring charges and house repairs and maintenance. The largest offsetting movements were in deposit and loan facilities and motor vehicle repair and servicing.

Over the twelve months to the December quarter 2010, tradables rose 1.6% and non-tradables rose 3.4%. This compares to tradables rising 1.4% and non-tradables rising 3.8% through the year to September quarter 2010. The main increases in tradables were for tobacco, automotive fuel, vegetables, soft drinks, waters and juices, fruit, snacks and confectionary, and spirits. Decreases in tradables were in audio, visual and computer equipment, motor vehicle, women's outerwear, men's outerwear, children's and infants' clothing, sport and recreational equipment and major household appliances. The main contributors to non-tradables were rises in electricity, rents, house purchase, hospital and medical services, water and sewerage, other motoring charges, take away and fast foods and deposit and loan facilities. The largest offsetting movements were in domestic holiday travel and accommodation, telecommunication, jams, honey and sandwich spreads and eggs.