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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)



JUNE QTR KEY FIGURES

	Mar Qtr 2006 to Jun Qtr 2006	Jun Qtr 2005 to Jun Qtr 2006
Weighted average of eight capital cities	% change	% change
Food	4.1	8.3
Alcohol and tobacco	0.9	3.6
Clothing and footwear	0.8	-1.7
Housing	0.8	3.5
Household contents and services	0.8	1.4
Health	2.4	4.6
Transportation	3.4	7.7
Communication	0.1	-0.9
Recreation	-0.4	1.5
Education	0.0	5.8
Financial and insurance services	1.2	2.2
All groups	1.6	4.0
All groups excluding Housing and Financial and insurance services	1.9	4.4

All Groups, Quarterly change

Contribution to quarterly change, June quarter 2006

JUNE QTR KEY POINTS


THE ALL GROUPS CPI

• rose 1.6% in the June quarter 2006 compared with 0.9% in the March quarter.
• rose 4.0% through the year to June quarter 2006.

• The most significant contributors to the increase this quarter were fruit (+52.0%) and automotive fuel (+11.2%). They each contributed 0.5 percentage points to the 1.6% rise in the All groups CPI in the June quarter. Fruit contributed 0.6 percentage points to the 4.0% through the year CPI increase. Bananas accounted for most of the increase in fruit prices, both in the June quarter itself and through the year to June quarter. Automotive fuel contributed 0.9 percentage points to the through the year increase of 4.0%.
• Other significant contributors to the overall increase this quarter were hospital and medical services (+4.0%), house purchase (+1.1%), deposit and loan facilities (+1.5%), rents (+0.9%), other financial services (+1.0%), tobacco (+1.2%), house repairs and maintenance (+1.1%) and furniture (+1.3%).
• The most significant offsetting price falls were motor vehicles (-1.0%), audio, visual and computing equipment (-2.6%), women's outerwear (-2.1%) and domestic holiday travel and accommodation (-0.9%).

TREATMENT OF THE CHILD CARE TAX REBATE (CCTR) IN THE CPI

In 2004 the Federal Government announced that it would introduce a 30 per cent Child Care Tax Rebate (CCTR) for out-of-pocket child care costs from 1 July 2004. The CCTR will be able to be claimed for the first time in the 2005-06 income year tax returns. The ABS has considered the legislation regarding the CCTR and has concluded that the CCTR is set up in such a way that it will have no direct effect on the CPI. Further details are contained in the appendix to this issue.

ROUNDING

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

ABBREVIATIONS

ABS Australian Bureau of Statistics

CPI Consumer Price Index

INQUIRIES

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

ANALYSES AND COMMENTS


MAIN CONTRIBUTORS TO CHANGE


CPI GROUPS

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

FOOD (+4.1%)

The rise in food prices was largely due to fruit (+52.0%), snacks and confectionery (+2.1%), take away and fast foods (+0.8%) and restaurant meals (+0.6%). Food n.e.c. (-1.7%) was the only offsetting price fall of any significance.

The rise in fruit prices was mainly attributable to an increase of approximately 250% in the price of bananas during the June quarter 2006 due to shortages created by Cyclone Larry in March 2006. Prices also rose for citrus fruit, apples, melons and strawberries, in part reflecting increased demand for alternative fruit as consumers looked for a substitute for bananas. The fruit expenditure class contributed 0.79 index points to the change in the All Groups CPI in June quarter 2006 and 0.90 index points to the through the year change.

In calculating the CPI, the ABS does not make any allowance for short-term substitution effects such as those that may have occurred between bananas and other fruit in recent months. The methodology used to construct the CPI is by reference to a 'fixed basket' consisting of goods and services acquired by households. For the current (15th series) CPI, this is the pattern of household expenditure in 2003-04. The methodology holds the composition of this basket fixed from quarter to quarter. While the increase in the price of bananas has contributed to an increase in the CPI in June quarter there are likely to be offsetting falls in the CPI in future quarters as their supply and price return to normal.

Increasing distribution and packaging costs were cited by some respondents as contributing to price rises in a number of food categories, including dairy and related products, bread and cereal products, some meat products, soft drinks, waters and juices, and takeaway and fast foods.

Through the year to June quarter 2006, the food group rose 8.3%.

TRANSPORTATION (+3.4%)

The rise in transportation costs was due to automotive fuel (+11.2%), motor vehicle repair and servicing (+0.9%) and motor vehicle parts and accessories (+1.3%). These increases were partially offset by a fall in motor vehicles (-1.0%).

Automotive fuel prices rose in January (+5.3%), fell in February (-1.3%) and rose in March (+1.9%), April (+7.7%), May (+2.4%) and June (+2.5%) leading to the overall increase of 11.2% between the March and June quarters 2006. The automotive fuel expenditure class contributed 0.71 index points to the change in the All Groups CPI in June quarter 2006 and 1.38 index points to the through the year change.

The following graph shows the pattern of the average daily price behaviour for unleaded petrol for the eight capital cities over the last fifteen months.

Through the year to June quarter 2006, the transportation group rose 7.7%, primarily due to a 24.6% rise in automotive fuel.

HOUSING (+0.8%)

The rise in housing costs was mainly attributable to house purchase (+1.1%), rents (+0.9%) and house repairs and maintenance (+1.1%). The only offset was electricity (-1.2%).

House purchase rose in all capital cities with increases ranging from 0.4% in Sydney and 0.5% in Melbourne to 3.8% in Perth and 3.9% in Darwin. Builders cited increasing labour and material costs as the main reason for the price rises. Rents rose in all capital cities ranging from 0.5% in Sydney to 1.7% in Perth.

The fall in the electricity costs was due to the commencement of the Winter Energy Concession that applies in Melbourne from May until November each year and the return to off-peak rates in Adelaide in the June quarter from the peak rates that apply in the March quarter each year.

Through the year to June quarter 2006, the housing group rose 3.5%.

HEALTH (+2.4%)

The rise in health costs was due to hospital and medical services (+4.0%) and dental services (+1.4%). These rises were partially offset by a fall in the net cost of pharmaceuticals (-0.5%), mainly due to the effect of the Pharmaceutical Benefits Scheme safety net.

Hospital and medical services rose mainly as a result of an average increase of around 6% in private health fund premiums from 1 April 2006.

Through the year to June quarter 2006, the health group rose 4.6%.

FINANCIAL AND INSURANCE SERVICES (+1.2%)

All components in the financial and insurance services group rose in the June quarter with contributions from deposit and loan facilities (+1.5%), other financial services (+1.0%) and insurance services (+0.9%).

The rise in deposit and loan facilities was mainly due to increases in some direct banking charges, such as account keeping and transaction fees. The rise in other financial services was due to increased stamp duty payments on real estate transfers and real estate agent commissions on residential property sales.

Through the year to June quarter 2006, the financial and insurance services group rose 2.2%.

HOUSEHOLD CONTENTS AND SERVICES (+0.8%)

Most categories of household contents and services rose this quarter with furniture (+1.3%), glassware, tableware and household utensils (+3.4%), floor and window coverings (+0.8%), household cleaning agents (+1.5%), child care (+1.8%), hairdressing and personal care services (+0.8%) and other household services (+1.4%) being the most significant. There were no significant price falls.

The rise in the furniture and glassware, tableware and household utensils was largely due to the ending of widespread discounting by major retailers in the March quarter, associated with post-Christmas and summer sales.

Through the year to June quarter 2006, the household contents and services group rose 1.4%.

ALCOHOL AND TOBACCO (+0.9%)

All components in the alcohol and tobacco group rose this quarter with contributions from tobacco (+1.2%), beer (+0.7%), wine (+0.7%) and spirits (+0.8%).

The rise in tobacco and beer prices was mainly due to the residual effect of the increase in Federal excise and customs duty from 1 February. A reduction in the alcohol content of some beers, which is treated as a quality adjusted price increase, also contributed to the increase in beer prices.

Through the year to June quarter 2006, the alcohol and tobacco group rose 3.6%.

RECREATION (-0.4%)

The fall in the recreation index was mainly due to audio, visual and computing equipment (-2.6%) and domestic holiday travel and accommodation (-0.9%).

The fall in audio, visual and computing equipment was attributable to competitive pricing for televisions and other home entertainment items by major retailers.

The fall in domestic holiday travel and accommodation resulted from a seasonal reduction in accommodation tariffs in the June quarter, following the peak prices that apply in the summer holiday period each year.

Through the year to June quarter 2006, the recreation group rose 1.5%.

TRADABLES AND NON-TRADABLES

The tradables component (see table 8) of the All groups CPI rose 2.7% in the June quarter. 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 increase were fruit, automotive fuel, tobacco, furniture, and snacks and confectionery. Falls in motor vehicles, audio, visual and computing equipment, and women's outerwear provided the most significant offsets.

The non-tradables component of the CPI, which includes goods and services whose prices are largely determined by domestic price pressures, rose 0.8%. Within non-tradables, the goods component rose 0.8%, mainly due to house purchase, take away and fast foods, and beer. A fall in electricity provided the most significant offset. The non-tradables services component rose 0.9% with hospital and medical services, deposit and loan facilities, rents and other financial services being the main contributors. A fall in domestic holiday travel and accommodation provided the most significant offset.

Through the year to June quarter 2006, tradables rose 4.8% and non-tradables rose 3.4%. This compares with rises of 2.8% and 3.1%, respectively, for these components through the year to March quarter 2006.

CAPITAL CITIES COMPARISON


ALL GROUPS

All Groups: Percentage change from previous quarter

The lower result for Hobart was largely due to that city recording price movements for food, alcohol and tobacco, household contents and services, and financial and insurance services that were lower than most of the other cities and well below the national average. The higher result for Brisbane and Perth was mainly due to those cities recording price movements for housing that were well above the national average. Canberra recorded rises for housing, household contents and services, transportation and recreation that were above the national average.

Through the year to June quarter 2006, the All groups CPI rose in all capital cities with the increases ranging from 3.5% in Hobart to 4.8% in Canberra. Price increases in Perth were also high (+4.7%). The higher result for Perth was largely due to an 8.9% rise in housing, more than double the 3.5% increase for the weighted average of eight capital cities. Canberra recorded rises for housing, household contents and services, health, transportation and recreation that were above the national average.

CPI, All groups index numbers and percentage changes
	Index number(a)	Percentage change
	Jun Qtr 2006	Mar Qtr 2006 to Jun Qtr 2006	Jun Qtr 2005 to Jun Qtr 2006
Sydney	154.7	1.6	3.8
Melbourne	152.6	1.4	3.9
Brisbane	156.2	1.8	4.1
Adelaide	157.6	1.3	3.8
Perth	153.2	1.8	4.7
Hobart	154.0	1.2	3.5
Darwin	149.2	1.7	4.2
Canberra	154.9	1.8	4.8
Weighted average of eight capital cities	154.3	1.6	4.0
(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 June 138.8 136.9 138.1 139.1 134.6 137.0 135.0 137.2 137.6 September 139.6 137.8 139.2 140.3 135.8 137.5 135.4 138.1 138.5 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 (a) Base of each index: 1989-90 = 100.0.

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
June	2.8	2.9	3.1	3.0	2.4	2.7	2.1	2.8	2.8
September	3.1	3.1	3.7	3.7	3.3	3.5	2.2	3.7	3.2
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
Percentage Change (from previous quarter)
2002
June	0.7	0.7	0.7	1.0	0.7	1.3	0.9	1.2	0.7
September	0.6	0.7	0.8	0.9	0.9	0.4	0.3	0.7	0.7
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

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