6456.0 - Information Paper: Introduction of the 14th Series Australian Consumer Price Index, 2000  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 29/09/2000   
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PREFACE

In Information Paper: Price Indexes and The New Tax System (cat. no. 6425.0), released on 3 May 2000, the Australian Bureau of Statistics (ABS) described the issues and implications of The New Tax System (TNTS) for the suite of producer and consumer indexes compiled by the ABS.

That information paper noted that while the direct impact of TNTS on the producer price indexes would be limited, implementation of TNTS raised some complex issues for the Consumer Price Index (CPI).

To ensure the CPI continues to be a reliable measure of price inflation for the household sector, the ABS announced plans to make some changes to the CPI from September quarter 2000, thus introducing the 14th series CPI. The paper also discussed options for measuring the impact of TNTS on the CPI, including the compilation of an experimental constant tax rate measure, which will abstract from the direct or first round effects of changes in tax rates on the prices of consumer goods and services.

Following release of that information paper, the ABS conducted seminar programs in all capital cities and has benefited from feedback from a wide range of users of the CPI. The ABS has also continued working on the earlier proposals, fine tuning where necessary. One consequence of this more recent work has been the decision not to proceed with the proposal to include financial services in the 14th series CPI.

The present information paper summarises the major changes that arise with the 14th Series CPI, including details of the new item weights, structure, and the revised publication format. The paper also includes more information about the experimental constant tax rate measure.


KEY DECISIONS TAKEN IN RESPECT OF THE 14TH SERIES CPI

  • A new utility-based commodity classification will be introduced to better address possible consumer substitution between commodities in response to relative price changes.
  • Weights will be updated based on the 1998-99 Household Expenditure Survey (HES).
  • Financial services will continue to be excluded from the CPI.
  • The ABS will compile an experimental constant tax rate measure, which will abstract from the direct or first round effects of changes in tax rates on the prices of consumer goods and services. This measure will be published in the December 2000 issue of Australian Economic Indicators (Cat. no. 1350.0), due for release on 30 November 2000