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6401.0 - Consumer Price Index, Australia, Jun 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/07/2011   
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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  - percenntage change



FOOD (+1.4%)

The food group recorded an increase in the June quarter 2011. The most significant contributors were fruit (+26.9%) and restaurant meals (+1.3%). The rise in fruit prices was mainly attributable to an increase of approximately 138% in the price of bananas in the June quarter 2011 due to shortages created by Cyclone Yasi in February 2011. Banana prices increased 377% over the six months to the June quarter 2011. Vegetables (-10.3%) provided the most significant offset, due to favourable growing conditions.

Over the twelve months to the June quarter 2011, fifteen out of the twenty six food categories rose, contributing to a 6.1% price rise across the food group. Increases were mainly driven by price rises in fruit (+66.6%), and vegetables (+9.7%). Milk (-10.8%) recorded the most significant offsetting price movement due to extensive price discounting across some retail outlets.


TRANSPORTATION (+1.2%)

The main contributors to the increase in the transportation group in the June quarter 2011 were automotive fuel (+4.0%) and urban transport fares (+1.1%). Motor vehicle repair and servicing (-0.9%) and motor vehicles (-0.2%) recorded the largest offsetting falls.

Automotive fuel rose in January (+2.4%), February (+2.2%), March (+4.8%) and April (+1.4%), then fell in May (-0.1%) and June (-3.4%).

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: Average price of ULP, cents per litre

Over the twelve months to the June quarter 2011, the transportation group rose 3.5%, primarily due to increases in automotive fuel (+11.3%) and other motoring charges (+6.3%). Motor vehicles (-1.4%) and motor vehicle repair and servicing (-1.7%) recorded partial offsetting falls.


FINANCIAL AND INSURANCE SERVICES (+1.6%)

The main contributor to the increase in the financial and insurance services group in the June quarter 2011 was deposit and loan facilities (+2.1%), 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. In the June quarter 2011 there was an increase in prices derived from interest rate margins partially offset by falls in direct fees. 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 1.6% in the June quarter 2011, driven mainly by higher premiums for house insurance and household contents insurance.

Over the twelve months to the June quarter 2011, the financial and insurance services group recorded an increase of 4.2%. This was due to increases in deposit and loan facilities (+5.5%), insurance services (+5.3%) and other financial services (+2.1%).


HOUSEHOLD CONTENTS AND SERVICES (+1.5%)

The household contents and services group rose in the June quarter 2011, with increases in furniture (+6.0%) and towels and linen (+7.5%). These increases were largely due to the cessation of specials offered in the March quarter 2011.

Over the twelve months to the June quarter 2011, the household contents and services group rose 0.1%. This increase was predominantly due to rises in other household services (+4.4%), child care (+7.5%), hairdressing and personal care services (+3.0%) and furniture (+1.0%), partially offset by falls in toiletries and personal care products (-2.4%), other household supplies (-1.8%) and major household appliances (-3.5%).


HEALTH (+2.0%)

The health group recorded an increase in the June quarter 2011 with all capital cities registering a rise. The main contributor was hospital and medical services (+3.4%), which rose mainly as a result of the increases in private health fund premiums effective from 1 April 2011. The only offset was pharmaceuticals (-0.8%), mainly due to a greater proportion of consumers exceeding the Pharmaceutical Benefits Scheme safety net compared to the March quarter 2011.

Over the twelve months to the June quarter 2011, the health group rose 4.0% mainly due to increases in hospital and medical services (+5.6%), dental services (+2.7%) and pharmaceuticals (+0.6%).


HOUSING (+0.4%)

The housing group recorded an increase in the June quarter 2011. The main contributor to the increase was rents (+1.1%) which recorded rises in both private and government rents. Government rents charged to pensioners and other welfare recipients are set as a proportion of income. Previous income increases to pensions in May 2009 were quarantined from the calculation of rental charges and have now been passed on to households in some states. The only offsetting price fall was in electricity (-1.5%) due to the seasonal switch to off-peak pricing in Melbourne and Adelaide.

Over the twelve months to the June quarter 2011, the housing group rose 4.6% with increases in all categories. The main contributors were rents (+4.5%), electricity (+10.7%), house purchase (+2.4%) and water and sewerage (+12.8%).


CLOTHING AND FOOTWEAR (+2.5%)

The clothing and footwear group recorded an increase in the June quarter 2011. The main contributors to the movement were accessories (+8.8%) and men's outerwear (+1.7%). The increase in accessories was mainly due to a rise in the price of jewellery. These increases were partially offset by a decrease in women's footwear (-2.3%).

Over the twelve months to the June quarter 2011, the clothing and footwear group increased 1.1%. The main contributors to the movement were accessories (+10.2%) and clothing services and shoe repair (+2.7%). Women's outerwear (-2.0%) provided the most significant offset.


RECREATION (-0.6%)

The fall in the recreation group in the June quarter 2011 was mainly due to decreases in audio, visual and computing equipment (-6.3%), domestic holiday travel and accommodation (-1.5%) and overseas holiday travel and accommodation (-1.2%). The most significant offset was recorded in pets, pet food and supplies (+4.0%).

Over the twelve months to the June quarter 2011, the recreation group fell 0.3%. The main contributors to the movement were audio, visual and computing equipment (-19.5%), sport and recreational equipment (-6.7%) and overseas holiday travel and accommodation (-1.9%). This was partially offset by a rise in other recreational activities (+4.0%).

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


ALCOHOL AND TOBACCO (+0.7%)

The alcohol and tobacco group recorded an increase in the June quarter 2011. The main contributor to the rise was tobacco (+1.4%) partially due to the flow-on effects of the federal excise tax increase from 1 February 2011.

Over the twelve months to the June quarter 2011, the alcohol and tobacco group rose 5.6%. This was driven by increases in tobacco (+12.0%) which was mainly due to the flow-on effect of the 25% increase in federal excise on tobacco implemented on 30 April 2010.


COMMUNICATION (+0.4%)

The communication group recorded a rise in the June quarter 2011 due to rises in both postal (+2.1%) and telecommunication (+0.4%).

In the twelve months to the June quarter 2011, the communication group recorded a rise of 0.4%.


EDUCATION (0.0%)

The education group recorded no movement in the June quarter 2011.

Over the twelve months to the June quarter 2011, the education group rose 5.9%.


TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 1.3% in the June quarter 2011. Prices for the goods and services in this component are largely determined on the world market. The tradables component represents approximately 40% of the weight of the CPI. The most significant contributors to the 1.4% rise in the tradable goods component were for fruit, automotive fuel, furniture, accessories, tobacco, towels and linen, glassware, tableware and household utensils and pets, pet foods and supplies. The most significant offsetting falls were for vegetables, audio, visual and computing equipment, toiletries and personal care products, food n.e.c. and other household supplies. The decrease in the tradable services component of 1.3% was driven by overseas holiday travel and accommodation.

The non-tradables component of the All groups CPI rose 0.6% in the June quarter 2011. Prices for the goods and services in this component are largely determined by domestic price pressures. The non-tradables component represents approximately 60% of the CPI. The non-tradable goods component rose 0.1% mainly due to house purchase and take away and fast foods. The most significant offsetting movements were for electricity and milk. The non-tradable services component rose 0.9%, due to increases for hospital and medical services, deposit and loan facilities, rents, insurance services, other financial services and restaurant meals.

Over the twelve months to the June quarter 2011, the tradables and non-tradables component both rose 3.6%. This compares to both components rising 3.3% through the year to the March quarter 2011. The main increases in tradables were for fruit, automotive fuel, tobacco, vegetables, accessories and lamb and mutton. The main decreases in tradables were for audio, visual and computing equipment, motor vehicles, sport and recreational equipment. The main contributors to non-tradables were rises for rents, electricity, deposit and loan facilities, house purchase, hospital and medical services and water and sewerage. The largest offsetting movements were for milk and motor vehicle repair.

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