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 September 2019 quarter, the living costs of pensioner and beneficiary households (PBLCI) rose 0.3%. Over the same period, the living costs of self-funded retiree households rose 0.9%, age pensioner households rose 0.4%, other government transfer recipient households rose 0.3% and employee households rose 0.1%. For more information about the September 2019 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 page.

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.

• The main contributor is a rise of 2.4% in alcohol and tobacco, driven by tobacco. The rise in tobacco is due to a 12.5% increase in the federal excise tax and further increase based on the Average Weekly Ordinary Time Earnings (AWOTE) effective 1 September 2019.
• Housing (+0.7%) also contributed to the rise, driven by property rates and charges, gas and other household fuels and water and sewerage.
• The main partially offsetting contributor is a 1.5% fall in insurance and financial services, driven by mortgage interest charges following interest rate cuts on home loan products in June and July.
• The living cost index (LCI) for the pensioner and beneficiary households (PBLCI) recorded a smaller rise compared to the Consumer Price Index (CPI) (+0.5%) this quarter. This is due to a fall in mortgage interest charges which is not included in the CPI and a larger fall in pharmaceutical products.
• Over the last twelve months the PBLCI rose 1.9% while the CPI rose 1.7%.
   

• The main contributor is a rise of 1.6% in recreation and culture, driven by international holiday, travel and accommodation as a result of increased prices for travel to Europe and America during their high tourist season.
• Alcohol and tobacco (+1.9%) also contributed to the rise, driven by tobacco.
• The main partially offsetting contributor is a 4.5% fall in insurance and financial services, driven by mortgage interest charges following interest rate cuts on home loan products in June and July.
• The LCI for employee households recorded a smaller rise compared to the CPI (+0.5%) this quarter.
• Over the last twelve months the LCI for employee households rose 1.3% while the CPI rose 1.7%.
   

• The main contributor is a rise of 1.7% in recreation and culture, driven by international holiday, travel and accommodation as a result of increased prices for travel to Europe and America during their high tourist season.
• Housing (+0.9%) also contributed to the rise, driven by property rates and charges; and water and sewerage.
• The main partially offsetting contributor is a 1.1% fall in health, driven by pharmaceutical products due to the cyclical effect of a greater proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS), reducing their out-of-pocket expenses.
• The LCI for age pensioner households recorded a smaller rise compared to the CPI (+0.5%) this quarter.
• Over the last twelve months the LCI for age pensioner households rose 1.7%, in line with the CPI.
   

• The main contributor is a rise of 2.6% in alcohol and tobacco, driven by tobacco. The rise in tobacco is due to a 12.5% increase in the federal excise tax and further increase based on the Average Weekly Ordinary Time Earnings (AWOTE) effective 1 September 2019.
• Housing (+0.4%) also contributed to the rise, driven by property rates and charges, gas and other household fuels and rents.
• The main partially offsetting contributor is a 2.9% fall in Insurance and financial services, driven by mortgage interest charges following interest rate cuts on home loan products in June and July.
• The LCI for other government transfer recipient households recorded a smaller rise compared to the CPI (+0.5%) this quarter.
• Over the last twelve months the LCI for other government transfer recipient households rose 1.9% while the CPI rose 1.7%.
   

• The main contributor is a rise of 2.4% in recreation and culture, driven by international holiday, travel and accommodation as a result of increased prices for travel to Europe and America during their high tourist season.

• The main partially offsetting contributor is a 0.4% fall in health, driven by pharmaceutical products due to the cyclical effect of a greater proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS), reducing their out-of-pocket expenses.
• The LCI for self–funded retiree households recorded a larger rise compared to the CPI (+0.5%) this quarter.
• Over the last twelve months the LCI for self–funded retiree households rose 1.9% while the CPI rose 1.7%.