Selected Living Cost Indexes, Australia

The Living Cost Indexes (LCI) have been designed to answer the question:

'By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?'

In the March 2020 quarter, the living costs of pensioner and beneficiary households (PBLCI) rose 0.8%. Over the same period, the living costs of age pensioner households rose 0.8%, other government transfer recipient households rose 0.7%, self funded retiree households rose 0.2% and employee households rose 0.1%. For more information about the March 2020 quarter results see Main Contributors to Change.

The inclusion of mortgage interest and consumer credit charges, and the different treatments of housing and insurance costs in the LCIs result in variations between the LCIs and the Consumer Price Index (CPI). The expenditure patterns of those households measured by the LCIs differ from those of the overall household sector in scope of the CPI; these also contribute to differences in the percentage changes.

For a discussion of the relationship between the LCIs and CPI, see the Methodology.

• 2.2% rise in food and non-alcoholic beverages was the main contributor as drought conditions saw price rises in fruit, vegetables, dairy, grain and cereal products in the March quarter. Bushfires increased transport costs for some fresh produce and strong export demand combined with falling supply resulted in further price rises for meat.
• 5.1% rise in health was driven by pharmaceutical products and medical and hospital services due to a reduction in the proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS) and Medicare Benefits Scheme (MBS). The safety net thresholds for both the PBS and MBS were reset on 1 January, increasing out-of-pocket expenses.
• 2.7% fall in transport was the main partial offset, driven by automotive fuel as recent falls in world oil prices flowed through to fuel prices.
• The living cost index (LCI) for the pensioner and beneficiary households (PBLCI) recorded a larger rise compared to the CPI (+0.3%) this quarter. This was due to PBLCI households having a higher expenditure weight for food and non-alcoholic beverages and health, both of which rose this quarter.
• Over the past twelve months the PBLCI rose 2.4% while the CPI rose 2.2%.
   

• 1.9% rise in food and non-alcoholic beverages was the main contributor as drought conditions saw price rises in fruit, vegetables, dairy, grain and cereal products in the March quarter.
• 1.7% fall in recreation and culture was the main partial offset, driven by international holiday travel and accommodation and domestic holiday travel and accommodation due to winter off-peak season in Europe and America and weak demand in domestic accommodation.
• 1.3% fall in insurance and financial services was driven by mortgage interest charges, following recent cuts in interest rates.
• The LCI for employee households recorded a smaller rise compared to the CPI (+0.3%) this quarter due to the inclusion of mortgage interest charges, which fell this quarter.
• Over the past twelve months the LCI for employee households rose 1.1% while the CPI rose 2.2%. This was due to a fall in mortgage interest charges which is not included in the CPI.
   

• 4.6% rise in health was the main contributor driven by pharmaceutical products and medical and hospital services.

• 2.2% rise in food and non-alcoholic beverages was the main contributor as drought conditions saw price rises in fruit, vegetables, dairy, grain and cereal products in the March quarter.
• 2.6% fall in transport was the main partial offset, driven by automotive fuel.
• The LCI for age pensioner households recorded a larger rise compared to the CPI (+0.3%) this quarter.
• Over the past twelve months the LCI for age pensioner households rose 2.4% while the CPI rose 2.2%.
   

• 2.2% rise in food and non-alcoholic beverages was the main contributor as drought conditions saw price rises in fruit, vegetables, dairy, grain and cereal products in the March quarter.

• 6.3% rise in health was driven by pharmaceutical products and medical and hospital services.
• 2.7% fall in transport was the main partial offset, driven by automotive fuel.
• The LCI for other government transfer recipient households recorded a larger rise compared to the CPI (+0.3%) this quarter.
• Over the past twelve months the LCI for other government transfer recipient households rose 2.4% while the CPI rose 2.2%.
   

• 2.1% rise in food and non-alcoholic beverages was the main contributor as drought conditions saw price rises in fruit, vegetables, dairy, grain and cereal products in the March quarter.

• 1.9% rise in health was driven by pharmaceutical products and medical and hospital services.
• 2.0% fall in recreation and culture was the main partial offset, driven by international holiday travel and accommodation and domestic holiday travel and accommodation due to winter off-peak season in Europe and America and weak demand in domestic accommodation.
• 1.9% fall in transport was driven by automotive fuel.
• The LCI for self–funded retiree households recorded a smaller rise compared to the CPI (+0.3%) this quarter. This was due to self-funded retiree households having a higher expenditure weight for holiday travel and accommodation, which fell this quarter.
• Over the past twelve months the LCI for self–funded retiree households rose 2.3% while the CPI rose 2.2%.
   

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts that sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

The Frequently Asked Questions page that has answers to a number of common questions to do with price indexes and the Consumer Price Index, in particular.