1.1. A wide range of separate consumer, producer and international trade price indexes is available in Australia. These individual indexes can be considered as partial indicators as they each relate to a particular segment of economic activity. Each index was developed to meet specific requirements and is released in its own separate, specialised publication, with substantial differences in profile. Further, there is by-product price data contained in the national accounts publications.
1.2. Given that price measures are used for a wide variety of purposes including analysis of inflation, indexation, contract escalation, derivation of constant price value estimates and international studies, the selection of the most appropriate measure(s) for any given application is particularly important.
1.3. Therefore, emphasis needs to be placed on effective communication with users as to the data choices available, and the characteristics of each of the different measures, in this important field of statistics.
1.4. In terms of the analysis of inflation, the high profile CPI is the most commonly used measure, even though not specifically designed for this purpose nor necessarily conceptually well suited.
1.5. In this context, the paper develops a new, integrated, statistical framework for a system of price indexes designed to assist in the analysis of inflation. The paper also proposes enhancing the way price statistics are published.
1.6. Chapter 2 of the paper describes each of the available price measures; Chapter 3 develops the new statistical framework; Chapter 4 outlines an economy-wide price index model; Chapter 5 describes a new household consumption index; Chapter 6 introduces a new approach to measuring underlying household inflation; Chapter 7 advises of proposals to review the strategy for the publication of price statistics; and Chapter 8 outlines plans for consultation with users. A glossary of key technical terms is also presented.
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