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6462.0 - Information Paper: Introduction of the 15th Series Australian Consumer Price Index 2005, 2005  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 30/09/2005   
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MEDIA RELEASE

September 30, 2005
Embargoed: 11:30 AM (AEST)
108/2005

ABS to revise Consumer Price Index

A forthcoming update of the Consumer Price Index (CPI), the nation's official measure of inflation, will take into account changed spending habits of Australians, according to an information paper released today by the Australian Bureau of Statistics (ABS).

The main outcomes will be to reflect changes in the importance of items in the CPI basket by updating the weight given to items and introducing financial services (such as bank fees and credit card charges) into the CPI.

The inclusion of financial services will be a world first by a statistical agency.

This will be the 15th review since the CPI was first compiled in 1960.

The ABS has reviewed the CPI about every five years since it was first compiled to ensure it remains relevant.Regular reviews ensure the weights reflect recent consumer spending patterns and provide the opportunity to reassess the scope and coverage of the index.

Today's information paper presents the updated weighting patterns, the information used in deriving the weights and some background on the major shifts in weights between the 14th and 15th series.

Results of the review will be incorporated into the September quarter 2005 CPI, to be published on 26 October 2005.

The Information Paper will also provide a mockup of the layout of the September quarter issue to enable key users to become familiar with it before the release date.

Further information is in Information Paper: Introduction of the 15th Series Australian Consumer Price Index 2005 (cat. no. 6462.0).

Background about today's Information Paper

Since 1960, when the Consumer Price Index (CPI) was first compiled, the Australian Bureau of Statistics (ABS) has maintained a program of periodic reviews of the CPI to ensure that it continues to meet community needs. The main objective of these reviews is to update item weights but they also provide an opportunity to reassess the scope and coverage of the index.

The scope of each review varies depending on the range of issues needing to be considered. The current (15th series) review is classified as a ‘minor review’ because it was largely restricted to updating the weights in the CPI basket. It is also implementing a decision first announced as part of the last ‘major review’ (the 13th series review in 1997 and 1998) to introduce a price index for financial services into the CPI.

The ABS has prepared the information paper to provide details of the broad outcomes from the 15th series CPI review. It describes the data used in deriving the weights and the ways in which some of the data have been adjusted to fit in with the CPI requirements and presents the updated weighting patterns, details of the changes to the structure of the index (mainly due to including financial services in the CPI) and some background on the major shifts in weights between the 14th and 15th series.

The ABS will release an updated Guide to the Consumer Price Index, 15th Series (cat. no. 6440.0) in conjunction with the release of the 15th series CPI on 26 October 2005.

A very detailed description of CPI concepts, the data used in compiling it, and the methodology underlying the CPI can be found in Australian Consumer Price Index: Concepts, Sources and Methods, 2005 (cat. no. 6461.0), which will be updated over the next few months to reflect the changes made during the 15th series review. It is expected to be released early in 2006.

Further information is in Information Paper: Introduction of the 15th Series Australian Consumer Price Index 2005 (cat. no. 6462.0).

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