CPI rose 0.6% in the March 2021 quarter

The  Consumer Price Index (CPI) rose 0.6 per cent in the March 2021 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).

Head of Prices Statistics at the ABS, Michelle Marquardt said: "Higher fuel prices, compared with the low prices seen in 2020, accounted for much of the rise in the March quarter CPI." 

The most significant rises in the March quarter were automotive fuel (+8.7 per cent), medical and hospital services (+1.5 per cent), and pharmaceutical products (+5.3 per cent) due to the resetting of the Medicare and Pharmaceutical Benefits Scheme safety nets. A rise in prices for accessories (+7.3 per cent) reflected high consumer confidence and demand for discretionary items such as jewellery, allowing jewellers to pass through elevated input costs.

The introduction, continuation and conclusion of a number of government schemes remained a factor in the March quarter, seen in price falls for new dwellings (-0.1 per cent) and tertiary education (-1.7 per cent). Ms Marquardt said "The fall in new dwelling prices was due to the impact of the Federal Government's HomeBuilder grant and similar grants by the Western Australian and Tasmanian state governments. Without the offset from these grants, the price of new dwellings would have risen, reflecting increases in materials and labour prices in response to strong demand".

"The Federal Government's Job-ready Graduates Package resulted in a fall in tertiary education fees this quarter.  While, on average, the costs for commencing students increased, those for continuing students fell mainly due to the grandfathering arrangements included in the package."

Annual inflation for the March 2021 quarter increased to 1.1 per cent following a rise of 0.9 per cent in the December quarter. Price rises in tobacco and furnishings were partially offset by falls in rents, automotive fuel and utilities. The trimmed mean, a measure of underlying inflation, rose by 1.1% which is the lowest annual movement on record. This followed a rise of 1.2 per cent in the December 2020 quarter.