6401.0 - Consumer Price Index, Australia, Dec 2009 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 27/01/2010   
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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



FOOD (+1.4%)

The food group rose 1.4% in the December quarter 2009. The most significant contributors to the increase were fruit (+15.9%), vegetables (+2.0%), food n.e.c. (+2.6%) and restaurant meals (+0.9%). The rise in fruit was driven by adverse weather in some growing areas, which resulted in lower yields and short supplies for some types of fruit. Bacon and ham (-6.2%) provided the most significant offset.

Over the twelve months to December quarter 2009, nineteen of the twenty six food categories rose to create a 1.9% price increase across the food group. Increases were mainly driven by general price rises in take away and fast foods (+3.8%), restaurant meals (+3.2%), fruit (+4.6%), snacks and confectionery (+3.1%) and fish and other seafood (+5.9%). Vegetables (-4.9%) and milk (-4.8%) recorded the most significant negative price movements.


HOUSING (+0.8%)

Most categories of housing recorded price rises this quarter, with the most significant being house purchase (+1.0%) and rents (+1.0%).

House purchase increased in all cities ranging from Melbourne (+1.3%) to Canberra (+0.3%). Rents increased in all cities ranging from Darwin (+1.7%) to Hobart, Adelaide and Canberra (+0.8%).

Over the twelve months to December quarter 2009 the housing group increased 5.5% mainly due to rises in rents (+5.4%), electricity (+15.7%), house purchase (+2.4%) and water and sewerage (+14.1%).


RECREATION (+1.5%)

The increase in recreation this quarter was mainly due to price rises for domestic holiday travel and accommodation (+6.6%), overseas holiday travel and accommodation (+2.3%) and pets, pet food and supplies (+3.1%). The major offset was provided by audio, visual and computing equipment (-7.1%).

Over the twelve months to December quarter 2009, the recreation group rose 1.1%. This rise was mainly due to audio, visual and computing media and services (+6.7%) and pets, pet food and supplies (+12.7%). Audio, visual and computing equipment (-12.4%) and overseas holiday travel and accommodation (-4.4%) provided the major offsets.


TRANSPORTATION (-0.8%)

The main contributor to the decrease in transportation costs this quarter was the fall in the price of automotive fuel (-2.8%). Motor vehicles (-0.3%) was the only other category to fall. Motor vehicle repair and servicing (+0.4%), other motoring charges (+0.6%) and urban transport fares (+0.2%) all recorded rises.

Automotive fuel fell in July (-0.2%), rose in August (+2.7%), fell in September (-1.9%), fell in October (-3.5%), rose in November (+1.6%) and rose in December (+0.4%).

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: TRANSPORTATION (–0.8%)

Over the twelve months to December quarter 2009, the transportation group rose 1.2%, with the main contributor being motor vehicles (+2.3%). Motor vehicle repair and servicing (+3.3%), other motoring charges (+6.0%), motor vehicles parts and accessories (+5.4%) and urban transport fares (+4.4%) also increased. Automotive fuel (-3.8%) provided the only offsetting decrease.


FINANCIAL AND INSURANCE SERVICES (+0.7%)

The major contributors to the increase in financial and insurance services this quarter were other financial services (+1.2%) and insurance services (+1.3%).

The positive movement in insurance services was due to increases in all categories of insurance.

Over the twelve months to December quarter 2009, the financial and insurance services group recorded a decrease of 6.3%. This decrease was mainly due to falls in deposit and loan facilities (-15.4%) and other financial services (-0.5%). This was partially offset by an increase in insurance services (+8.4%).


HEALTH (-0.9%)

The major contributor to the fall in health costs this quarter was pharmaceuticals (-5.3%). Dental services provided the main offset (+0.8%). The fall in the net price of pharmaceuticals was due to cyclical effects of the Pharmaceutical Benefits Scheme (PBS) safety net. The number of people accessing and receiving subsidised prescription pharmaceuticals (the PBS safety net) reaches a peak in December quarter.

Over the twelve months to December quarter 2009, the health group rose 4.7% due to increases in hospital and medical services (+5.9%), dental services (+4.2%) and pharmaceuticals (+1.6%).


ALCOHOL AND TOBACCO (+0.5%)

The alcohol and tobacco group recorded an increase of 0.5% in the December quarter 2009, with rises in beer (+2.1%) and spirits (+0.8%). Wine (0.0%) recorded no change. The rises in beer and spirit prices were mainly due to the residual effect of the federal excise from August 2009. Tobacco (-0.5%) provided an offsetting fall.

Over the twelve months to December quarter 2009, the alcohol and tobacco group rose 3.1%.


CLOTHING AND FOOTWEAR (+0.2%)

The rise in clothing and footwear this quarter was due to increases in men's outerwear (+1.1%), men's underwear, nightwear and socks (+1.2%), and clothing services and shoe repair (+2.1%). Children's footwear (-3.4%) registered the largest offsetting decrease.

Over the twelve months to December quarter 2009, the clothing and footwear group rose 2.1%. The increase was mainly due to rises in accessories (+5.6%) and women's underwear, nightwear and hosiery (+8.9%). Women's footwear (-2.3%) recorded the largest offsetting decrease.


EDUCATION GROUP (+0.1%)

The education group reported a rise in the December quarter 2009. The only component movement was an increase in preschool and primary education (+0.4%).

Over the twelve months to December quarter 2009, the education group rose 5.6%.


HOUSEHOLD CONTENTS AND SERVICES (+0.0%)

The household contents and services group did not move in percentage terms this quarter. The most significant upward contributors were furniture (+1.4%), tools (+1.3%) and hairdressing and personal care services (+0.9%). Offsetting decreases came from major household appliances (-2.8%), glassware, tableware and household utensils (-1.3%) and toiletries and personal products (-0.6%).

Over the twelve months to December quarter 2009, the household contents and services group rose 3.6%. This increase was predominantly due to rises in furniture (+5.7%), other household supplies (+3.7%) and floor and window coverings (+4.3%).


TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 0.1% in the December quarter 2009. 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 decrease in the tradable goods component of -0.1% was driven by falls in automotive fuel, audio, visual and computing equipment and pharmaceuticals. The most significant offsetting increases in tradeable goods were in fruit, vegetables, furniture, pets, pet food and supplies and food n.e.c.. The increase in the tradeable services component of +2.2% was driven by overseas holiday travel and accommodation.

The non-tradables component of the All groups CPI rose 0.8% in the December quarter 2009. 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 0.9% mainly due to price increases for house purchase, beer, gas and other household fuels and electricity. The most significant offsetting movement was bacon and ham. The non-tradables services component rose 0.9%, due to domestic holiday travel and accommodation, rents, other financial services, insurance services, restaurant meals and motor vehicle repair.

Through the year to December quarter 2009, non-tradables rose 2.6% and tradables rose 1.4%. This compares to non-tradables rising 2.3% and tradables showing a drop of 0.5%, respectively, for these components through the year to September quarter 2009. The main increases in non-tradables were rents, electricity, house purchase, hospital and medical services, insurance services, water and sewerage and beer. The largest offsetting decrease was in deposit and loan facilities. Furniture, motor vehicles, audio, visual and computing media and services and tobacco were the main contributors to the rise in tradables. Decreases in tradeables were recorded for automotive fuel and audio, visual and computing equipment.