Selected Living Cost Indexes, Australia

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Living Cost Indexes (LCIs) are designed to measure the effect of changes in prices on the out–of–pocket living expenses of selected household types

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Reference period
September 2020
Released
4/11/2020
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Main features

September key statistics

Weighted average of eight capital cities, All groupsJun Qtr 2020 to
Sep Qtr 2020
% change		Sep Qtr 2019 to
Sep Qtr 2020
% change
Selected Living Cost Indexes (LCIs) - Household type:  
 Pensioner and Beneficiary LCI (PBLCI)

0.8

0.9

 Employee LCI

1.3

-0.9

 Age pensioner LCI

0.3

0.9
 Other Government Transfer Recipient LCI

1.1

0.8

 Self-funded Retiree LCI 0.4

0.7

Consumer Price Index (CPI)1.60.7


In the September 2020 quarter, all five living cost indexes rose:

  • Child care was the main contributor for three of the five population sub-groups following the end of free child care on 13 July.
  • This was followed by automotive fuel increasing across all population sub-groups due to a partial recovery in world oil consumption and reduction in global oil production putting upward pressure on fuel prices.

What's new this quarter

An article was published on 11 October 2020 explaining the impact of COVID-19 on the September quarter CPI and Selected Living Cost indexes:

Main contributors to change

Percentage change, Commodity group - June Quarter 2020 to September Quarter 2020
Weighted average of eight capital citiesPensioner and beneficiary LCIEmployee LCIAge pensioner LCIOther government transfer recipient LCISelf-funded retiree LCIConsumer Price Index (CPI)
Food and non-alcoholic beverages-0.4-0.4-0.4-0.4-0.4-0.4
Alcohol and tobacco2.11.51.72.31.41.6
Clothing and footwear0.60.50.60.50.60.4
Housing (a)0.2-0.30.50.1-0.50.0
Furnishings, household equipment and services4.814.10.79.41.312.0
Health-1.90.1-1.6-2.6-0.4-0.1
Transport4.43.64.24.53.43.4
Communication-0.8-0.8-0.8-0.8-0.9-0.8
Recreation and culture0.81.00.40.90.61.1
Education2.42.20.12.40.62.1
Insurance and financial services (b)-1.4-3.9-0.4-2.4-0.20.1
All groups0.81.30.31.10.41.6

(a) New dwelling purchase by owner-occupiers are included in the CPI but excluded from the Selected Living Cost Indexes.
(b) The Selected Living Cost Indexes includes interest charges and general insurance. Interest charges are excluded from the CPI and general insurance is calculated on a different basis.

 

Transport

  • Rose across all households due to price increases in automotive fuel as world oil consumption partially recovered and global oil production fell. Automotive fuel rose in July (+3.5%), fell in August (-1.0%) and rose in September (+0.6%). 

Furnishings, household equipment and services

  • Three household types recorded rises due to child care, following the end of the 'Early Childhood Education and Care Relief Package', which temporarily made child care free in the June 2020 quarter. For more information on child care see Measuring the Consumer Price Index: September quarter update.
  • Price rises in furniture and household appliances due to strong demand for products such as home office furniture and fridges and freezers, combined with supply constraints also contributed to the rise.
  • Partially offsetting the rise was non-durable household products, which fell due to a return to discounting on products such as toilet paper and body washes.

Alcohol and tobacco

  • Rose across all households due to increases in tobacco prices, driven by the 12.5% annual excise indexation and bi-annual AWOTE increase on 1 September.

Education

  • Increases driven by preschool and primary education, following the end of free before and after school care on 13 July.

Health

  • Fell across four household types driven by pharmaceutical products due to increases in the proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS). 

Population sub-groups

At the All groups level, differences across the population subgroups quarterly movements are largely explained by the weight of child care and automotive fuel both of which increased this quarter. Annual price falls in child care, automotive fuel and mortgage interest have kept annual inflation subdued across the population subgroups.

Comparison of weights for selected components
 Child careAutomotive fuelMortgage interest
Quarterly movement (%) (a) 9.4-6.5
Annual movement (%)-24.4-13.4-17.6
 Weight for each population sub-group (%)
 Child careAutomotive fuelMortgage interest
CPI1.173.57(b)
Employee households1.473.758.00
Age pensioner households0.004.171.06
Other government transfer recipient households0.894.222.92
Self-funded retiree households0.003.500.64
Pensioner & beneficiary households0.484.132.05

(a) For more information on child care see Measuring the Consumer Price Index: September quarter update.
(b) Mortgage interest not included in the CPI.

  

Pensioner and beneficiary households (+0.8%)

  • Living costs for pensioner and beneficiary households recorded a smaller rise than employee households due to these households having a lower expenditure weight for child care, which was no longer free in the September quarter.
  • Over the past twelve months the PBLCI rose 0.9% due to rises in alcohol and tobacco (+11.0%) and food and non-alcoholic beverages (+3.8%). 

Employee households (+1.3%)

  • Living costs for employee households recorded the largest rise of all households due to having a higher expenditure weight for child care, which was no longer free in the September quarter. 
  • A fall in mortgage interest charges partially offset the rise following recent reductions in fixed and variable interest rates.
  • Over the past twelve months the LCI for employee households fell 0.9% due to falls in mortgage interest charges (-17.6%) and child care (-26.7%). Employee households was the only population sub-group to fall annually.

Age pensioner households (+0.3%)

  • Living costs for age pensioner households recorded a smaller rise compared to other households due to having no expenditure weight for child care.
  • Over the past twelve months the LCI for age pensioner households rose 0.9% due to rises in alcohol and tobacco (+8.3%) and food and non-alcoholic beverages (+3.9%).

Other government transfer recipient households (+1.1%)

  • Living costs for other government transfer recipient households recorded the second largest increase due to the weight of child care for this household type.
  • Over the past twelve months the LCI for other government transfer recipient households rose 0.8% due to rises in alcohol and tobacco (+12.3%) and food and non-alcoholic beverages (+3.8%). 

Self–funded retiree households (+0.4%)

  • Living costs for self–funded retiree households recorded a smaller rise compared to other households due to having no expenditure weight for child care.
  • Over the past twelve months the LCI for self–funded retiree households rose 0.7% due to rises in alcohol and tobacco (+5.8%) and food and non-alcoholic beverages (+3.6%). 

Data downloads

Table 1. All groups, index numbers and percentage changes, by household type

Data files
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Table 2. Commodity groups, index numbers, percentage changes and points contributions, by household type

Data files
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Table 3. Gross insurance, mortgage interest and consumer credit, index numbers and percentage changes, by household type

Data files
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Use of price indexes in contracts

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts that sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

Frequently asked questions

The Frequently Asked Questions page that has answers to a number of common questions to do with price indexes and the Consumer Price Index, in particular.

Previous catalogue number

This release previously used catalogue number 6467.0.

Methodology

Selected Living Cost Indexes, Australia methodology, September 2020