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6463.0 - Analytical Living Cost Indexes for Selected Australian Household Types, Jun 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 15/08/2011   
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NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER) Release Date
September 2011 14 November 2011
December 2011 1 February 2012
March 2012 2 May 2012
June 2012 1 August 2012



CHANGES IN THIS ISSUE

This issue incorporates a number of amendments to historical series in Table 7 - Analytical Living Cost Indexes and the CPI, where errors had been made in the rounding process when calculating the percentage changes. Please see paragraph 19 in the explanatory notes for more information on the ALCI calculation methodology.


CHANGES TO THE ALCI FROM SEPTEMBER QUARTER 2011

The September quarter 2011 issue of the Analytical Living Cost Indexes (ALCIs) will incorporate some changes flowing from the recent major review of the CPI.

The main changes that will be incorporated in the September quarter 2011 ALCI publication are:
  • new household expenditure weights for each household type derived from the 2009-10 Household Expenditure Survey (HES) and other data sources;
  • the coverage of the expenditure weights for some households will change, thus improving the alignment and scope of the price collection and expenditure estimates leading to improved overall estimates. The expenditure weights for employee households, age pensioner households and other government transfer recipient households will change from using national expenditures to capital city level expenditures, consistent with the approach used for the CPI. The 2009/10 HES included additional sampling of age pensioner and other government transfer recipient households. Analysis of the results of the 2009/10 HES showed that the expenditure weights at the capital city level were sufficiently reliable for all household types with the exception of self -funded retiree households. The expenditure weights for self-funded retiree households will be retained at the national level;
  • the CPI commodity classification (CPICC) used to categorise the goods and services in the CPI, and subsequently the ALCIs, will be updated to ensure it reflects contemporary wording and groupings. To enable greater international comparability, the classification will be aligned to the United Nations Classification of Individual Consumption according to Purpose (COICOP) where possible. Consequently, there will be considerable re-naming and some re-ordering of the items in the classification. A detailed list of changes to the CPICC, including tables showing correspondences between the 15th and 16th series commodity classifications can be found in Consumer Price Index Commodity Classification, Australia, 16th Series, 2011 (cat. no. 6401.0.55.004).

The 16th series CPI will be introduced from the September quarter 2011. The ABS will release a series of publications in the coming months to provide users with detailed information regarding the changes to the ALCIs and the CPI. For further details please refer to Changes to the CPI from September Quarter 2011 within Consumer Price Index, Australia, June quarter 2011 (cat. no. 6401.0) or www.abs.gov.au.


IMPACT OF THE FLOODS AND CYCLONE YASI

ABS price index compilation methodologies and quality assurance processes have ensured that any impact of the floods and cyclone on consumer prices is reflected in the data included in this publication.


ROUNDING

Any discrepancies between totals and sums of components in this publication are due to rounding.


CPI DATA RE-REFERENCED TO JUNE QUARTER 1998 = 100.0

For ease of comparison, the index reference period for the CPI data used throughout this publication has been re-referenced to June quarter 1998 = 100.0. All index numbers and percentage changes shown are calculated on this basis. This may lead to some minor differences due to rounding from the figures published in Consumer Price Index, Australia (cat. no. 6401.0).


INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070.


SUMMARY COMMENTARY


THE ANALYTICAL LIVING COST INDEX

The Analytical Living Cost Indexes (ALCI) for Selected Australian Household Types have been designed to answer the question:

'By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?'

In the June quarter 2011, changes in the living costs of age pensioner households, employee households and other government transfer recipient households all rose 0.9%. The self-funded retiree households living costs rose 1.0% in the June quarter 2011. The Consumer Price Index (CPI) (re-referenced) rose 1.0% over the same period. For more information about the June quarter 2011 results, see Results by Household Type.

Since the series began in the June quarter 1998 the living costs of other government transfer recipient households showed the highest rise of 54.3% followed by age pensioner households which rose 52.6% and employee households which rose 51.9%, all higher than the 47.4% rise in the CPI (re-referenced). The living costs of self-funded retiree households rose 47.2%.

These differences have come about for a number of reasons. The inclusion of mortgage interest and consumer credit charges in the analytical living cost indexes have a significant impact on employee and other government transfer recipient households. The inclusion of mortgage interest and consumer credit charges and the different treatments of housing and insurance in the ALCIs result in variations between the ALCIs and the CPI series. The expenditure patterns of those households measured by the ALCIs differ from those of the overall household sector covered by the CPI. This also contributes to differences in the percentage changes.

For a discussion of the relationship between the ALCIs and CPI, see the Explanatory Notes.


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