6401.0.60.004 - Information Paper: An Implementation Plan to Maximise the Use of Transactions Data in the CPI , 2017  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 16/06/2017  First Issue
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4.1 The ABS has undertaken broad consultation regarding the implementation of multilateral methods to compile the Australian CPI. This commenced with the release of the Information paper: Making Greater Use of Transactions Data to compile the Consumer Price Index (cat. no. 6401.0.60.003), published 29 November 2016. Following this paper, the ABS sought user and stakeholder input to resolve the outstanding methodological challenges.

4.2 The ABS has collaborated with international experts and NSOs to resolve outstanding methodological issues (Appendix 1 and 2 contain peer reviews of ABS research). Additionally, the ABS conducted bilateral and multilateral consultations with key stakeholders, including: the Reserve Bank of Australia; the Treasury; Department of Social Services; Department of Finance; and State Treasuries. In all instances, experts, NSOs and stakeholders were supportive of maximising the use of transactions data to compile the CPI using multilateral methods.

4.3 This consultation with key stakeholders raised topics for further ABS research. These topics included:

      (i) The choice of aggregating prices directly to the EC level using multilateral methods;
      (ii) The choice and justification of multilateral methods; and
      (iii) The choice and justification of the half splice extension method.

4.4 The ABS has conducted further research with the following conclusions:
      (i) Aggregate prices using multilateral methods below the EC level using respondent classes as EAs.
      (ii) Aggregate prices using the GEKS-Törnqvist multilateral method based on theoretical properties and empirical evidence; and
      (iii) Aggregate prices using the mean splice extension method based on theoretical properties and empirical evidence.

4.5 In preparation for implementation in December quarter 2017, the ABS will parallel processes alongside the production of the CPI.