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6463.0 - Analytical Living Cost Indexes for Selected Australian Household Types, Sep 2011 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 14/11/2011   
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NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER) Release Date
December 2011 1 February 2012
March 2012 2 May 2012
June 2012 (final issue)1 August 2012



CHANGES IN THIS ISSUE

This issue incorporates the changes introduced into the September quarter 2011 Consumer Price Index, Australia (cat. no. 6401.0), which included an updated weighting pattern and a new commodity classification. For more details on the changes resulting from the introduction of the 16th Series CPI, refer to Information Paper: Introduction of the 16th Series Australian Consumer Price Index, 2011 (cat. no. 6470.0).

As a result of these changes to the CPI, there are changes to the Analytical Living Cost Indexes (ALCIs), including updated weighting patterns. For more details on the new weighting patterns and a comparison of the previous and current weights, refer to Analytical Living Cost Indexes and Pensioner and Beneficiary Living Cost Index: 16th Series Weighting Patterns, 2011 (cat. no. 6472.0).

The main changes that have been 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 has changed, 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 have changed from using state/territory 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 have been retained at the state/territory level;
  • the CPI Commodity Classification (CPICC) used to categorise the goods and services in the CPI, and subsequently the ALCIs, has been updated to ensure it reflects contemporary wording and groupings. To enable greater international comparability, the classification has been aligned to the United Nations Classification of Individual Consumption according to Purpose (COICOP) where possible. Consequently, there has been 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).
  • due to the introduction of the 16th Series CPI, estimates of points contribution of the expenditure classes to All Groups index number are only available from the June quarter 2011. As a result, it is impossible to calculate changes to the points contribution to All Groups from the September quarter 2010 to the September quarter 2011. The following tables have been suspended temporarily:
    • Table 5: Points contribution to annual change, Commodity group, index points - September quarter 2010 to September quarter 2011, and
    • Table 6: Contributions to total index, Commodity group, index points - September quarter 2010 to September quarter 2011.
  • Table 8 - Indexes for Mortgage Interest, Consumer Credit and Gross Insurance now includes a longer time series for mortgage interest and consumer credit. These indexes have an index reference period of June quarter 1998 = 100.0.
  • previously published estimates of the points contribution of the commodity groups to the change in the All groups index for the June quarter 2011 (Table 3) have been revised, due to the application of the new household expenditure weights.


FUTURE CHANGES

From the December quarter 2011, the release date of this publication will be brought forward. The Analytical Living Cost Indexes will generally be released on the first Wednesday following the release of Consumer Price Index, Australia (cat. no. 6401.0). The December quarter 2011 issue of this publication is scheduled for release on Wednesday 1 February 2012.

The June quarter 2012 issue of this product will be its final issue. From the September quarter 2012 issue (scheduled for release on 31 October 2012), statistics on the Analytical Living Cost Indexes for Selected Australian Household Types (cat. no. 6463.0) and the Pensioner and Beneficiary Living Cost Index (cat. no. 6467.0) will be amalgamated into a single product Selected Living Cost Indexes, Australia (cat. no. 6467.0).


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 September quarter 2011, changes in the living costs of employee households, age pensioner households and other government transfer recipient households all rose 0.6%. The self-funded retiree households living costs rose 0.8% in the September quarter 2011. The Consumer Price Index (CPI) (re-referenced) rose 0.6% over the same period. For more information about the September quarter 2011 ALCI 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 55.3%, followed by age pensioner households which rose 53.5%, then employee households which rose 52.8% and self-funded retiree households which rose 48.4%, all higher than the 48.3% rise in the CPI (re-referenced).

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 has 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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