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PRICE INDEXES AND CONTRACT PRICE INDEXATION
1 ALL GROUPS, INDEX NUMBERS(a)
2 ALL GROUPS, PERCENTAGE CHANGES
CPI All GROUPS, WEIGHTED AVERAGE OF EIGHT CAPITAL CITIES, INDEX NUMBERS(a)





DECEMBER QTR KEY FIGURES

	Sep Qtr 2006 to Dec Qtr 2006	Dec Qtr 2005 to Dec Qtr 2006
Weighted average of eight capital cities	% change	% change
Food	0.5	8.6
Alcohol and tobacco	0.8	3.5
Clothing and footwear	-0.4	-2.0
Housing	0.5	3.2
Household contents and services	0.2	1.9
Health	-0.8	5.3
Transportation	-3.8	1.1
Communication	0.5	1.7
Recreation	1.4	2.4
Education	0.0	4.8
Financial and insurance services	0.5	1.4
All groups	-0.1	3.3
All groups excluding Housing and Financial and insurance services	-0.3	3.6

All Groups, Quarterly change

Contribution to quarterly change, December quarter 2006

DECEMBER QTR KEY POINTS


THE ALL GROUPS CPI

• fell 0.1% in the December quarter 2006 down from an increase of 0.9% in the September quarter.
• rose 3.3% through the year to December quarter 2006.

• The most significant price falls this quarter were automotive fuel (-12.4%), fruit (-5.2%), pharmaceuticals (-5.0%) and audio, visual and computing equipment (-2.7%).
• The decrease in automotive fuel contributed -0.86 index points to the December quarter CPI movement.
• The most significant offsetting price increases were domestic travel and accommodation (+6.2%), vegetables (+4.1%), rents (+1.0%) and house purchase (+0.5%).

CHANGES IN THIS ISSUE

This issue includes an Appendix on the Treatment of child-care services in the Australian Consumer Price Index (CPI).

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

Weighted average of eight capital cities, Percentage change from previous quarter

TRANSPORTATION (-3.8%)

The main contributor to the 3.8% fall in transportation this quarter was the fall in the price of automotive fuel (-12.4%), with average quarterly prices returning to the lowest levels since June Quarter 2005. All other categories in transportation rose, with motor vehicle repair and servicing (+1.0%) and motor vehicles (+0.3%) being the most significant.

Automotive fuel prices fell in July (-0.5%), August (-0.1%), September (-8.9%), October (-6.3%) and November (-1.9%) then rose in December (+2.8%). The automotive fuel expenditure class contributed -0.86 index points to the change in the All Groups CPI in December quarter 2006 and -0.15 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.

Through the year to December quarter 2006, the transportation group rose 1.1%, with the main contributors being motor vehicle repair and servicing (+4.1%), motor vehicles (+1.5%) and other motoring charges (+4.6%). A fall in automotive fuel (-2.3%) provided the only offset.

RECREATION (+1.4%)

Recreation recorded its strongest quarterly increase since September quarter 2005, due mainly to domestic holiday travel and accommodation (+6.2%). This increase resulted from a seasonal increase in accommodation tariffs and airfares. Overseas holiday travel and accommodation also rose (+1.2%).

The major offsetting price fall was in audio, visual and computing equipment (-2.7%), reflecting ongoing price falls in this category.

Annually, Recreation rose 2.4% with the strongest rises in holiday travel and accommodation, with the domestic component increasing by 7.6% and the overseas component by 5.9%. Over the same period, audio, visual and computing equipment fell by 8.0%.

HOUSING (+0.5%)

The rise in housing this quarter was mainly due to rents (+1.0%) and house purchase (+0.5%).

Increases in average rents were recorded in all capital cities and range from Perth (+1.8%) to Hobart (+0.6%). House purchase average price movements range from Darwin (+4.2%) to Sydney (-0.4%).

Through the year to December quarter 2006, the housing group rose 3.2%. This rise was mainly attributable to rents (+3.7%), house purchase (+2.1%), and property rates and charges (+5.6%). Annually, housing increases were led by rises in Darwin (+9.5%) and Perth (+7.7%).

FOOD (+0.5%)

The rise in food prices was largely due to vegetables (+4.1%), cakes and biscuits (+2.0%), restaurant meals (+0.8%), bread (+1.8%) and take away and fast foods (+0.6%). This was offset by price falls in fruit (-5.2%) and Beef and veal (-1.9%).

The increase in prices of vegetables resulted from adverse effects of weather conditions on vegetable crops leading to shortages in the supply of many vegetables.

The fall in fruit prices was largely due to the lower quarterly average price of bananas. Following an increase of 406% over the June and September quarters 2006, banana prices fell 19% in December quarter. Prices remained high in October and early November before falling consistently through the remainder of the quarter. With the exception of melons all other fruit rose.

Over the twelve months to December quarter 2006, food prices rose 8.6%, mainly due to increases in fruit (+72.2%). The only significant offsetting annual fall was in poultry (-3.0%).

ALCOHOL AND TOBACCO (+0.8%)

Three of the four components in the alcohol and tobacco group rose this quarter with contributions from beer (+1.2%), spirits (+1.5%) and tobacco (+0.6%). Wine prices fell slightly (-0.1%).

The rises in beer, spirit, and tobacco prices can be attributed to the discontinuation of specials and to the flow on effects of the increase in Federal excise and customs duty from 1 August.

Through the year to December quarter 2006, the alcohol and tobacco group rose 3.5%, with rises in all categories except wine, which fell 0.3% over the year.

HEALTH (-0.8%)

The fall in health costs in December quarter 2006 was due to a fall in the net cost of pharmaceuticals (-5.0%) more than offsetting a rise in the net cost of hospital and medical services (+0.4%).

The fall in the net cost of pharmaceuticals was due to the cyclical effect of the Pharmaceutical Benefits Scheme. The number of people accessing the PBS Safety Net benefits reaches a peak in the December quarter. There was a slight rise in gross pharmaceutical prices.

The small rise in the net cost of hospital and medical services was due to the combined effects of gross price increases across all services, static Bulk Billing percentages and the cyclical effect of the Medicare Plus Safety Net.

Over the year to December quarter 2006, the health group rose 5.3%, with the largest component increase in net hospital and medical services (+6.4%).

TRADABLES AND NON-TRADABLES

The non-tradables component (see table 8) of the CPI rose 0.8% in the December quarter. This component includes goods and services whose prices are largely determined by domestic price pressures and represents approximately 58% of the CPI. Within non-tradables, the services component rose 0.9%, mainly due to domestic holiday travel & accommodation and rents. The major offset was provided by insurance services. The non-tradable goods component rose 0.7% mainly due to house purchase.

The tradables component of the All groups CPI fell 1.4%. 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 main contributors to the decrease were automotive fuel, fruit and pharmaceuticals. The most significant offset was a rise in vegetables.

Through the year to December quarter 2006, tradables rose 2.9% and non-tradables rose 3.5%. This compares with rises of 4.4% and 3.6%, respectively, for these components through the year to September quarter 2006.

CAPITAL CITIES COMPARISON


ALL GROUPS

All Groups: Percentage change from previous quarter

Significant falls in automotive fuel prices were recorded in all cities. In Darwin these fuel price falls were more than offset by higher than average Housing (+2.3%) and Food (+1.1%) costs. Similarly, the result in Perth was driven mostly by higher than average prices in Recreation (+2.8%) and Housing (+0.7%).

Through the year to December quarter 2006, the All groups CPI rose in all capital cities with the increases ranging from 2.5% in Hobart to 5.0% in Darwin. The higher result for Darwin was largely due to a 9.5% rise in Housing, nearly triple the 3.2% increase for the weighted average of eight capital cities. Perth also recorded a rise for Housing (+7.7%) that was well above the national average.

CPI, All groups index numbers and percentage changes
	Index number(a)		Percentage change
	Dec Qtr 2006		Sep Qtr 2006 to Dec Qtr 2006	Dec Qtr 2005 to Dec Qtr 2006
Sydney	155.8		-0.2	3.2
Melbourne	153.5		-0.1	2.9
Brisbane	157.3		-0.1	3.4
Adelaide	158.8		-0.3	3.0
Perth	155.5		0.4	4.4
Hobart	154.7		-0.3	2.5
Darwin	152.6		0.5	5.0
Canberra	155.6		-0.3	3.1
Weighted average of eight capital cities	155.5		-0.1	3.3
(a) Base of each index: 1989-90 = 100.0.

SELECTED TABLES FROM CONSUMER PRICE INDEX, AUSTRALIA (CAT. NO. 6401.0) 1 ALL GROUPS, INDEX NUMBERS(a) ALL GROUPS, Index numbers(a) Period Sydney Melbourne Brisbane Adelaide Perth Hobart Darwin Canberra Weighted average of eight capital cities 2002-03 141.1 139.7 140.7 142.7 136.8 139.1 136.8 139.7 140.2 2003-04 144.1 142.8 144.8 147.0 139.6 142.6 138.7 143.4 143.5 2004-05 147.7 145.7 148.5 150.4 144.0 147.1 141.8 146.7 147.0 2005-06 152.1 150.2 153.2 155.2 150.1 151.8 146.5 151.9 151.7 2002 December 140.4 139.0 139.9 141.5 136.4 138.0 136.2 139.2 139.5 2003 March 142.1 140.9 141.8 144.6 137.4 140.0 137.5 140.7 141.3 June 142.2 140.9 141.8 144.3 137.4 140.8 137.9 140.7 141.3 September 142.4 141.8 143.3 145.4 138.6 141.1 137.8 141.9 142.1 December 143.6 142.1 144.2 146.2 139.2 142.0 138.5 142.9 142.8 2004 March 145.0 143.5 145.4 147.7 139.6 143.0 139.0 143.9 144.1 June 145.5 143.9 146.3 148.6 141.0 144.3 139.6 144.8 144.8 September 146.2 144.2 146.8 149.0 142.0 145.0 140.8 145.5 145.4 December 147.3 145.3 148.0 150.0 143.3 146.7 141.1 146.3 146.5 2005 March 148.2 146.4 149.2 150.9 144.4 148.0 141.9 147.0 147.5 June 149.0 146.9 150.0 151.8 146.3 148.8 143.2 147.8 148.4 September 150.5 148.6 150.9 153.4 147.8 150.1 144.7 149.7 149.8 December 151.0 149.2 152.1 154.1 149.0 151.0 145.4 150.9 150.6 2006 March 152.2 150.5 153.5 155.6 150.5 152.2 146.7 152.2 151.9 June 154.7 152.6 156.2 157.6 153.2 154.0 149.2 154.9 154.3 September 156.1 153.7 157.5 159.3 154.9 155.1 151.8 156.0 155.7 December 155.8 153.5 157.3 158.8 155.5 154.7 152.6 155.6 155.5 (a) Base of each index: 1989-90 = 100.0. Back to Top

2 ALL GROUPS, PERCENTAGE CHANGES

ALL GROUPS, Percentage changes
Period	Sydney	Melbourne	Brisbane	Adelaide	Perth	Hobart	Darwin	Canberra	Weighted average of eight capital cities
Percentage Change (from previous financial year)
2002-03	2.8	3.3	3.2	4.0	2.8	3.3	2.3	3.3	3.1
2003-04	2.1	2.2	2.9	3.0	2.0	2.5	1.4	2.6	2.4
2004-05	2.5	2.0	2.6	2.3	3.2	3.2	2.2	2.3	2.4
2005-06	3.0	3.1	3.2	3.2	4.2	3.2	3.3	3.5	3.2
Percentage Change (from corresponding quarter of previous year)
2002
December	2.8	3.1	3.0	3.6	2.9	3.1	2.0	3.2	3.0
2003
March	3.0	3.6	3.4	5.0	2.8	3.6	2.8	3.8	3.4
June	2.4	2.9	2.7	3.7	2.1	2.8	2.1	2.6	2.7
September	2.0	2.9	2.9	3.6	2.1	2.6	1.8	2.8	2.6
December	2.3	2.2	3.1	3.3	2.1	2.9	1.7	2.7	2.4
2004
March	2.0	1.8	2.5	2.1	1.6	2.1	1.1	2.3	2.0
June	2.3	2.1	3.2	3.0	2.6	2.5	1.2	2.9	2.5
September	2.7	1.7	2.4	2.5	2.5	2.8	2.2	2.5	2.3
December	2.6	2.3	2.6	2.6	2.9	3.3	1.9	2.4	2.6
2005
March	2.2	2.0	2.6	2.2	3.4	3.5	2.1	2.2	2.4
June	2.4	2.1	2.5	2.2	3.8	3.1	2.6	2.1	2.5
September	2.9	3.1	2.8	3.0	4.1	3.5	2.8	2.9	3.0
December	2.5	2.7	2.8	2.7	4.0	2.9	3.0	3.1	2.8
2006
March	2.7	2.8	2.9	3.1	4.2	2.8	3.4	3.5	3.0
June	3.8	3.9	4.1	3.8	4.7	3.5	4.2	4.8	4.0
September	3.7	3.4	4.4	3.8	4.8	3.3	4.9	4.2	3.9
December	3.2	2.9	3.4	3.0	4.4	2.5	5.0	3.1	3.3
Percentage Change (from previous quarter)
2002
December	0.6	0.9	0.5	0.9	0.4	0.4	0.6	0.8	0.7
2003
March	1.2	1.4	1.4	2.2	0.7	1.4	1.0	1.1	1.3
June	0.1	0.0	0.0	-0.2	0.0	0.6	0.3	0.0	0.0
September	0.1	0.6	1.1	0.8	0.9	0.2	-0.1	0.9	0.6
December	0.8	0.2	0.6	0.6	0.4	0.6	0.5	0.7	0.5
2004
March	1.0	1.0	0.8	1.0	0.3	0.7	0.4	0.7	0.9
June	0.3	0.3	0.6	0.6	1.0	0.9	0.4	0.6	0.5
September	0.5	0.2	0.3	0.3	0.7	0.5	0.9	0.5	0.4
December	0.8	0.8	0.8	0.7	0.9	1.2	0.2	0.5	0.8
2005
March	0.6	0.8	0.8	0.6	0.8	0.9	0.6	0.5	0.7
June	0.5	0.3	0.5	0.6	1.3	0.5	0.9	0.5	0.6
September	1.0	1.2	0.6	1.1	1.0	0.9	1.0	1.3	0.9
December	0.3	0.4	0.8	0.5	0.8	0.6	0.5	0.8	0.5
2006
March	0.8	0.9	0.9	1.0	1.0	0.8	0.9	0.9	0.9
June	1.6	1.4	1.8	1.3	1.8	1.2	1.7	1.8	1.6
September	0.9	0.7	0.8	1.1	1.1	0.7	1.7	0.7	0.9
December	-0.2	-0.1	-0.1	-0.3	0.4	-0.3	0.5	-0.3	-0.1

LONGER TERM SERIES:

				Quarter ending
Year	31 March	30 June	30 September	31 December
1985	68.1	69.7	71.3	72.7
1986	74.4	75.6	77.6	79.8
1987	81.4	82.6	84.0	85.5
1988	87.0	88.5	90.2	92.0
1989	92.9	95.2	97.4	99.2
1990	100.9	102.5	103.3	106.0
1991	105.8	106.0	106.6	107.6
1992	107.6	107.3	107.4	107.9
1993	108.9	109.3	109.8	110.0
1994	110.4	111.2	111.9	112.8
1995	114.7	116.2	117.6	118.5
1996	119.0	119.8	120.1	120.3
1997	120.5	120.2	119.7	120.0
1998	120.3	121.0	121.3	121.9
1999	121.8	122.3	123.4	124.1
2000	125.2	126.2	130.9	131.3
2001	132.7	133.8	134.2	135.4
2002	136.6	137.6	138.5	139.5
2003	141.3	141.3	142.1	142.8
2004	144.1	144.8	145.4	146.5
2005	147.5	148.4	149.8	150.6
2006	151.9	154.3	155.7	155.5
(a) Base of each index:1989-90 = 100.0