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6401.0 - Consumer Price Index, Australia, Dec 2007  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 23/01/2008   
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DECEMBER KEY FIGURES

Sep Qtr 2007
to Dec Qtr 2007
Dec Qtr 2006
to Dec Qtr 2007
Weighted average of eight capital cities
% change
% change

Food
-0.1
1.2
Alcohol and tobacco
1.3
3.6
Clothing and footwear
0.2
1.6
Housing
1.1
4.8
Household contents and services
0.8
-1.0
Health
-1.0
4.1
Transportation
2.4
5.6
Communication
0.0
0.4
Recreation
0.8
1.0
Education
0.0
4.1
Financial and insurance services
2.1
4.9
All groups
0.9
3.0
All groups excluding Housing and Financial and insurance services
0.7
2.2

All Groups Quarterly change
Graph: All Groups Quarterly change

Contribution to quarterly change
-
December Quarter 2007
Graph: Contribution to quarterly change—December Quarter 2007



DECEMBER KEY POINTS


THE ALL GROUPS CPI

  • rose 0.9% in the December quarter 2007, compared with a rise of 0.7% in the September quarter.
  • rose 3.0% through the year to December quarter 2007.


OVERVIEW OF CPI MOVEMENTS
  • The most significant contributors to the increase this quarter were automotive fuel (+7.3%), deposit and loan facilities (+2.7%), house purchase (+1.3%), rents (+1.6%), domestic holiday travel and accommodation (+3.7%) and other financial services (+1.9%).
  • The most significant offsetting price falls this quarter were for fruit (-13.5%), vegetables (-6.9%), pharmaceuticals (-5.4%) and audio, visual and computing equipment (-4.3%).


NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER) Release Date
March 2008 23 April 2008
June 2008 23 July 2008



ROUNDING

Any discrepancies between totals and sums of components in this publication are due to rounding.



CHANGES IN THIS ISSUE

There are no changes in this issue.



ABBREVIATIONS

ABS Australian Bureau of Statistics


CPI Consumer Price Index



INQUIRIES

For further information about these and related statistics, contact Lee Taylor on Canberra (02) 6252 6251 or the National Information and Referral Service on 1300 135 070.



SUMMARY COMMENTARY


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




TRANSPORTATION (+2.4%)

The most significant increase in transportation costs this quarter was due to the rise in the price of automotive fuel (+7.3%). Most other categories in transportation rose, with motor vehicle repair (+0.9%) and urban transport fares (+1.5%) being the most significant. The only offsetting fall was in motor vehicles (-0.7%).


Automotive fuel prices fell in July (-3.4%) and August (-2.2%) then rose in September (+0.7%), October (+2.0%), November (+5.8%) and December (+4.7%). The automotive fuel expenditure class contributed +0.47 index points to the overall 1.50 index points change in the All Groups CPI in December quarter 2007 and +0.87 index points to the through the year change.


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 (+2.4%)


Through the year to December quarter 2007, the transportation group rose 5.6%, the rise in automotive fuel (+14.3%) was the most significant contributor to the increase. There were also rises in the price of motor vehicle repair (+2.9%), other motoring charges (+5.2%), motor vehicle parts and accessories (+5.4%) and urban transport fares (+4.4%). Motor vehicles prices fell 0.5%.



HOUSING (+1.1%)

Most categories of housing recorded price rises this quarter. Main contributors to the increases were increases in house purchase (+1.3%) and rents (+1.6%). This is the largest quarterly rise for house purchases since March quarter 2005.


Average rents rose in every capital city, ranging from 0.4% in Hobart to 3.2% in Perth.


Increases in house purchase prices were recorded in all capital cities, with Brisbane (+3.0%) and Melbourne (+2.0%) being the highest and Sydney (+0.6%), Adelaide (+0.5%) and Perth (+0.3%) being the lowest.


Over the four quarters to December quarter 2007, the housing group rose 4.8%, mainly due to rents (+6.4%) and new house prices (+4.3%).



FINANCIAL AND INSURANCE SERVICES (+2.1%)

All categories of financial and insurance services recorded price rises this quarter. Deposit and loan facilities rose 2.7%, other financial services increased 1.9% and insurance services increased 1.2%.


Through the year to December quarter 2007, financial and insurance services rose 4.9% due mainly to increases in the prices of deposit and loan facilities and other financial services.



RECREATION (+0.8%)

The rise in recreation was due mainly to increased prices for domestic holiday travel and accommodation (+3.7%), with less significant increases in prices for audio, visual and computing media and services (+2.2) and overseas holiday travel and accommodation (+1.0%). Audio, visual and computing equipment (-4.3%) provided the only significant offsetting price fall.


Domestic holiday travel and accommodation rose in line with the normal seasonal pattern, with rises in fares and accommodation for most destinations. Increases were observed in all cities except Darwin (-13.0%) and Hobart (-0.2%). The falls in Darwin and Hobart were due to falls in fares.


Over the year to December quarter 2007, Recreation rose 1.0% due largely to rises in overseas holiday travel and accommodation (+5.5%), with less significant increases in other recreational activities (+4.0%) and sports participation (+5.5%). The most significant price fall was in audio, visual and computing equipment (-11.1%).



ALCOHOL AND TOBACCO (+1.3%)

Beer (+2.1%) and tobacco (+1.1%) provided the most significant contributions to the rise in prices for the alcohol and tobacco group this quarter. There were no falls in any category in any city.


The rise in beer is due to widespread general price rises and the cessation of specials in some cities. Increases ranged from 0.6% in Perth to 3.5% in Melbourne.


Tobacco prices rose in all cities, ranging from 0.7% in Perth and Hobart to 2.0% in Darwin.


In the twelve months to December quarter 2007, the alcohol and tobacco group rose 3.6%, with rises in all categories.



HOUSEHOLD CONTENTS AND SERVICES (+0.8%)

The major contributor to the rise in household contents and services this quarter was furniture (+2.1%), with less significant increases in other household services (+2.0%) hairdressing and personal care services (+1.2%) and other household supplies (+0.7%). There was a small fall in the prices of household cleaning agents (-1.2%).


The rise in furniture prices was largely driven by prices returning from widespread specials during September quarter sales, as well as some general price rises this quarter. Increases were recorded in all cities except Darwin (-0.4%), with the highest being in Sydney (+3.0%).


Other household services rose in all cities, ranging from 0.6% in Sydney to 5.1% in Perth , mainly due to increases in prices for gardening services and house cleaning.


Through the year to December quarter 2007, the household contents and services group fell 1.0% due mostly to the fall in “out-of-pocket" expenses for child care in the September quarter 2007. This resulted from the inclusion of the Child Care Tax Rebate (CCTR) as a rebate for the first time and the additional 10% indexation of the Child Care Benefit (CCB) rates on top of the usual annual CPI indexation. See the appendix Child Care Services in the CPI in the September Quarter 2007 release of this publication.



HEALTH (-1.0%)

The fall in health costs in December quarter 2007 is due to a fall in the net cost of pharmaceuticals (-5.4%) more than offsetting a rise in dental services (+0.9%).


The fall in the net cost of pharmaceuticals is due to the cyclical effect of the Pharmaceutical Benefits Scheme safety net. The number of people accessing the PBS Safety Net benefits reaches a peak in the December quarter. All capital cities saw significant falls due to the fall in the "out-of-pocket" cost of PBS prescription pharmaceuticals.


Dental services rose in all cities, with increases ranging from 0.1% in Canberra to 2.9% in Adelaide.


Over the year to December quarter 2007, the health group rose 4.1%, with the largest increase being in net hospital and medical services (+4.8%).



FOOD (-0.1%)

The small fall in food prices this quarter was due to falls in fruit (-13.5%) and vegetables (-6.9%) offsetting rises in most other food categories. The most significant rises were for milk (+5.6%), take away and fast foods (+1.4%), bread (+2.7%), cheese (+4.9%), poultry (+4.1%), food n.e.c. (+3.8%), snacks and confectionary (+2.0%) and restaurant meals (+1.0%).


Fruit was in plentiful supply due to good conditions reported in most growing areas. Price falls were observed across a range of fruit, most significantly bananas, but also rockmelons, watermelons and strawberries. Some offsetting rises were observed for oranges, apples, mandarines and pears.


The fall in vegetables prices was due to the plentiful supply of some vegetables resulting from generally good conditions in growing areas, combined with widespread specials. The largest fall was observed for lettuce, with lesser falls for tomatoes and cauliflower. Partially offsetting these falls were rises for potatoes, pumpkin and onions.


The rises in milk and cheese prices were reported to be due to strong world demand for dairy products, as well as the reduced availability of feed in Australia. The increase in bread prices is reported to be due to increases in the price of flour and production costs. Increases in prices of take away and fast foods were observed across all items.


Food prices rose 1.2% over the twelve months to December quarter 2007 mainly due to increases in prices of take away and fast foods (+4.9%), vegetables (+8.6%), restaurant meals (+3.8%), bread (+8.8%) and milk (+10.1%). Fruit (-32.0%) provided the only significant offsetting annual fall, driven by lower through-the-year banana prices.



CLOTHING AND FOOTWEAR (+0.2%)

The rise in prices of clothing and footwear this quarter was due to small increases in a number of categories, due to some general price rises as well as the end of the specials in a number of cities. The most notable increases were for accessories (+1.7%) and women's footwear (+2.4%). Small falls were recorded in men's footwear (-2.4%) and women's outerwear (-0.4%).


Over the twelve months to December quarter 2007, the cost of clothing and footwear rose 1.6% with accessories (+5.3%) being the most significant contributor.



TRADABLES AND NON-TRADABLES

The non-tradables component of the CPI (see table 8) rose 1.3% in the December quarter. This component includes goods and services whose prices are largely determined by domestic market conditions and represents approximately 58% of the CPI. Within non-tradables, the services component rose 1.2%, mainly due to increases in deposit and loan facilities, rents, domestic holiday travel and accommodation and other financial services. There were no offsetting falls in non-tradable services. The non-tradable goods component rose 1.5% mainly due to a rise in prices for house purchase. There were no significant offsets.


The tradables component of the All groups CPI rose 0.3% in the December quarter 2007. This component includes goods and services whose prices are largely determined on the world market and represents approximately 42% of the weight of the CPI. The rise in automotive fuel prices provided the main contribution to the increase, with less significant contributions from furniture, tobacco and audio, visual and computing media and services. The most significant offsets were fruit, vegetables, pharmaceuticals and audio, visual and computing equipment.


Over the twelve months to December quarter 2007, non-tradables rose 4.2%, while tradables rose 1.4%. This compares with a rise of 3.5% for non-tradables and a fall of 0.3% for tradables over the twelve months to September quarter 2007. The main drivers in through-the-year non-tradables were rents and house purchase.


Automotive fuel was the main contributor to the through-the-year rise in tradables, with less significant contributions from vegetables, overseas holiday travel and accommodation and tobacco.



CAPITAL CITIES COMPARISON


ALL GROUPS

All Groups: Percentage change from previous quarter
Graph: All Groups: Percentage change from previous quarter



All capital cities showed rises in the All groups level CPI this quarter. Darwin rose 0.3%, while all other cities were in the range of 0.8% to 1.1%. In all cities automotive fuel was the main contributor, followed by deposit and loan facilities. House purchase, rents, domestic holiday travel and accommodation and other financial services were also significant in most cities. Fruit and vegetables showed significant offsetting falls in most cities. Pharmaceuticals and audio, visual and computing equipment also fell in all cities.


The lower result for Darwin was mainly due to a combination of a fall in domestic holiday travel and accommodation and a smaller increase in automotive fuel prices compared to other cities.


Over the year to December quarter 2007, the All groups CPI rose in all capital cities with the increases ranging from 2.4% in Sydney to 3.9% in Brisbane. The higher result in Brisbane is largely due to a 8.2% rise in Housing, substantially higher than the 4.8% increase for the weighted average of eight capital cities.

CPI, All groups index numbers and percentage changes

Index number(a)
Percentage change
Dec Qtr 2007
Sep Qtr 2007
to Dec Qtr 2007
Dec Qtr 2006
to Dec Qtr 2007

Sydney
159.5
0.9
2.4
Melbourne
158.5
1.0
3.3
Brisbane
163.4
1.1
3.9
Adelaide
163.1
1.0
2.7
Perth
160.2
0.8
3.0
Hobart
159.2
0.8
2.9
Darwin
157.1
0.3
2.9
Canberra
160.8
1.0
3.3
Weighted average of eight capital cities
160.1
0.9
3.0

(a) Base of each index: 1989-90 = 100.0.


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