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6401.0 - Consumer Price Index, Australia, Sep 2010 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/10/2010   
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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



HOUSING (+2.3%)

The housing group recorded an increase this quarter with rises in all categories. The main contributors to the movement were water and sewerage (+12.8%), electricity (+6.0%) and property rates and charges (+6.2%) primarily due to annual price increases in July. Also contributing to the rise were rents (+1.1%), house purchase (+0.5%), gas and other household fuels (+2.2%) and house repairs and maintenance (+0.6%).

Over the twelve months to September quarter 2010 the housing group rose 5.2% mainly due to rises in electricity (+12.4%), house purchase (+3.2%) and rents (+4.3%).


ALCOHOL AND TOBACCO (+3.1%)

The alcohol and tobacco group recorded an increase of 3.1% in the September quarter 2010 with rises in tobacco (+7.0%), wine (+0.6%), beer (+0.5%) and spirits (+0.7%). The rise for tobacco was due to the flow on effect of the 25% increase in excise tax implemented on 30 April 2010 as well as the rise in the rate of federal excise on 1 August 2010.

Over the 12 months to the September quarter 2010, the alcohol and tobacco group rose 11.2% mainly due to the increase in tobacco (+25.4%).


HOUSEHOLD CONTENTS AND SERVICES (+0.8%)

The household contents and services group rose 0.8% this quarter with rises in furniture (+1.4%) and other household supplies (+1.2%). Tools (-1.0%) and major household appliances (-0.6%) provided the largest offsetting falls.

Child care (+2.4%) recorded a rise this quarter primarily due to price rises at most providers which was partially offset by an increase in the maximum rate of Child Care Benefit (CCB) from 5 July 2010. For further information please see the Appendix on page 34 of this issue.

Over the twelve months to September quarter 2010, the household contents and services group rose 0.4%. This increase was predominantly due to rises in other household services (+3.8%) and hairdressing and personal care services (+3.2%).


RECREATION (+0.7%)

The rise in the recreation group this quarter was mainly due to increases in domestic holiday travel and accommodation (+1.9%) and overseas holiday travel and accommodation (+1.7%). The most significant offset was audio, visual and computing equipment (-2.7%).

Over the twelve months to September quarter 2010, the recreation group fell 0.7%. The main contributor was audio, visual and computing equipment (-20.3%). This was partially offset by a rise in sports participation (+3.8%).

As the CPI is compiled on an acquisitions basis, airfares are collected in advance (at the time of payment), but are only used in the CPI in the quarter in which the trip is undertaken. Overseas airfares are collected two months in advance (July for travel in September) and domestic airfares are collected one month in advance (July for travel in August).


CLOTHING AND FOOTWEAR (+1.4%)

The clothing and footwear group recorded an increase in the September quarter 2010 following two quarters of price falls. Increases in accessories (+2.4%) and men's outerwear (+2.2%) were partially offset by a decrease in women's outerwear (-0.8%).

Over the twelve months to September quarter 2010, the clothing and footwear group fell 2.8%. The decrease was mainly due to falls in women's outerwear (-4.4%), children's and infants' clothing (-6.5%) and women's underwear, nightwear and hosiery (-4.9%). The general rate of customs duty on textile, clothing and footwear imports was cut from 17.5% to 10.0% on 1 January 2010. Clothing services and shoe repair (+3.3%) recorded the largest offsetting rise.


FINANCIAL AND INSURANCE SERVICES (+0.5%)

The major contributor to the increase in the financial and insurance services group this quarter was insurance services (+1.9%). This was driven by increases in premiums partially due to recent extreme weather conditions in some cities. Other financial services (+0.2%) also contributed to the increase with rises in taxes on transfers in several cities.

Deposit and loan facilities (+0.1%), which include both direct fees and prices derived from interest rate margins, recorded a rise during the September quarter 2010. The prices of services charged by financial institutions varies across the range of products covered in the CPI. There was an increase in the price of services charged on deposit products which was partially offset by a decrease in the price of services charged on loan products, resulting in a positive price change overall. For more details on calculating prices of financial services, please see the appendix in the June quarter 2008 publication.

Over the twelve months to September quarter 2010, the financial and insurance services group recorded an increase of 3.4%. This was due to increases in deposit and loan facilities (+3.4%), other financial services (+3.0%) and insurance services (+4.3%).


EDUCATION GROUP (+0.1%)

The education group reported a rise in the September quarter 2010 following a rise in preschool and primary education (+0.7%).

Over the twelve months to the September quarter 2010, the education group rose 5.8%.


TRANSPORTATION (-0.6%)

There was a decrease in transportation costs this quarter with a fall in the price of automotive fuel (-3.7%). Other motoring charges (+3.0%), motor vehicle repair and servicing (+0.7%), motor vehicles (+0.3%) and urban transport fares (+0.8%) recorded partially offsetting quarterly rises.

Automotive fuel fell in April (-0.5%), rose in May (+1.5%) and fell in June (-1.4%), July (-1.6%), August (-1.0%) and September (-2.9%).

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 (–0.6%)

Over the twelve months to September quarter 2010, the transportation group rose 0.6%, with the main contributor being other motoring charges (+5.8%). Urban transport fares (+2.5%) and motor vehicle repair and servicing (+2.0%) also recorded a rise. Motor vehicles (-0.8%) and automotive fuel (-0.3%) fell.


FOOD (-0.5%)

The food group fell 0.5% in the September quarter 2010. The most significant contributors were vegetables (-5.4%) and soft drinks, waters and juices (-1.8%). The fall in vegetables resulted mainly from seasonal factors and favourable weather conditions in growing areas, which resulted in increased supplies for a number of vegetables. Take away and fast foods (+0.5%) provided the most significant offset.

Over the twelve months to September quarter 2010, seventeen out of the twenty six food categories rose to create a 1.7% rise across the food group. Increases were mainly driven by general price rises in restaurant meals (+2.4%), take away and fast foods (+1.9%), vegetables (+3.3%) and fruit (+3.3%). Jams, honey and sandwich spreads (-3.5%) recorded the most significant offsetting price movement.


HEALTH (-0.7%)

The health group recorded a negative movement this quarter with all capital cities registering a fall. The major contributor was pharmaceuticals (-3.9%) due to the effect of the Pharmaceutical Benefits Scheme safety net.

Over the twelve months to September quarter 2010, the health group rose 5.2% due to increases in hospital and medical services (+6.9%), dental services (+3.8%) and pharmaceuticals (+1.8%).


COMMUNICATION (-0.3%)

The major contributor to the decrease in the communications group was telecommunications (-0.5%) partially due to falls in the price of internet services. A rise in postal (+6.4%) in part due to an increase in the price of a basic postage stamp from 55 cents to 60 cents provided a partial offset.

Over the twelve months to September quarter 2010, the communications group fell 0.4%.


TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 0.2% in the September 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 rises in the tradable goods component of 0.1% were in tobacco, furniture, other household supplies, accessories and men's outerwear. The most significant offsetting falls were in automotive fuel, vegetables, pharmaceuticals and audio, visual and computing equipment. The increase in the tradable services component of 1.6% was driven by overseas holiday travel and accommodation.

The non-tradables component of the All groups CPI rose 1.1% in the September 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 1.7% mainly due to price increases for water and sewerage, electricity, house purchase, gas and other household fuels, take away and fast foods and beer. The most significant offsetting movement was bread. The non-tradable services component rose 0.9%, due to increases in property rates and charges, rents, domestic holiday travel and accommodation, other motoring charges, insurance services, sports participation and house repairs and maintenance. The most significant offset was telecommunication.

Over the twelve months to September quarter 2010, tradables rose 1.4% and non-tradables rose 3.8%. This compares to tradables rising 1.4% and non-tradables rising 4.2% through the year to June quarter 2010. The main increases in tradables were for tobacco, vegetables, fruit, snacks and confectionary, overseas holidays and accommodation, pets, pet food and supplies and soft drinks, waters and juices. Decreases in tradables were in audio, visual and computer equipment, women's outerwear, major household appliances, motor vehicles and children's and infants' clothing. The main contributors to non-tradables were rises in electricity, house purchase, rents, hospital and medical services, water and sewerage, deposit and loan facilities, beer and other financial services. The largest offsetting movements were in telecommunications, jams, honey and sandwich spreads, eggs and poultry.


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