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APPENDIX 1 RE-REFERENCING THE SELECTED LIVING COST INDEXES
A conversion factor is calculated as follows:
Rounded conversion factor = 100.0/179.7 = 0.5565
Index number for the June quarter 2012 (index reference period 1989-90 = 100.0) = 180.4
Index number for the June quarter 2012 (index reference period 2011-12 = 100.0) = 180.4 x 0.5565 = 100.4
The conversion factor may be used to convert any historical All Groups CPI, weighted average of eight capital cities index numbers to the new index reference period. Different conversion factors will be required for each index series.
NOTE: The above example is calculated using the published index numbers that have been rounded to one decimal. The ABS has calculated the conversion factors from unrounded index numbers, to obtain a greater degree of precision. The preferred conversion factors which use this greater degree of precision are available in Table 1 below.
CONVERTING THE RE-REFERENCED SERIES BACK TO THE OLD INDEX REFERENCE PERIOD
Similarly, to convert index numbers on the new index reference period back to the old index reference period will also require rescaling of index numbers. The conversion factors that should be applied are obtained by taking the inverse of the previously described conversion factor.
Using the example above, a conversion factor is calculated as follows:
Rounded conversion factor = 179.7/100.0 = 1.7970
Index number for the June quarter 2012 (index reference period 2011-12 = 100.0) = 100.4
Index number for the June quarter 2012 (index reference period 1989-90 = 100.0) = 100.4 x 1.7970 = 180.4
The conversion factor may be used to convert any historical All Groups CPI, weighted average of eight capital cities index number to the old index reference period. Once again, different conversion factors will be required for each index series.
Index numbers and percentage changes are always published to one decimal place, with the percentage changes being calculated from the rounded index numbers. A consequence of re-referencing price indexes can be that period-to-period percentage changes may differ slightly to those previously published. These differences do not constitute a revision of the index series and are simply the effect of rounding and the re-referencing. There may be slight differences between user calculations and published values due to the greater level of precision of the values used in calculations performed by the ABS.
It should be noted that a different conversion factor will apply for each Selected Living Cost index series. For example the conversion factor for Pensioner and beneficiary households, All Groups will differ from the factor for Employee households, All Groups and for Employee households, Gross insurance. Conversion factors for converting to the new index reference period are provided in Table 1 below.
For further information, contact the National Information and Referral Service Hotline on 1300 135 070. The ABS provides further information on re-referencing in Consumer Price Index: Concepts, Sources and Methods, 2011 (cat. no. 6461.0) and Frequently Asked Questions available at <https://www.abs.gov.au>.
Table 1. Selected living cost indexes, Weighted average of eight capital cities, Conversion factors, to index reference period 2011-12=100.0
CPI Conversion factors for converting the CPI index values to the new index reference period are provided in 'Table 17 - CPI conversion factors, from index reference period 1989-90 to 2011-12' available as a data cube on the 'Downloads' tab of the September quarter 2012 issue of Consumer Price Index, Australia (cat. no. 6401.0).
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