Australian government changes its food prices inflation measurement
The Australian government through its Australian Bureau of Statistics (ABS), has changed its method of calculating the Consumer Price Index (CPI). The move comes at the same time as criticism that the CPI does not truly reflect the rate of retail price increases for food and other necessities.
From the September quarter 2012, all index numbers will be calculated on a new index reference period of 2011-12. This will result in the index numbers for each index series being reset to 100.0 for the financial year 2011-12.
Latest ABS data, analysed by The Australian newspaper, has shown that fruit and vegetable prices rose by twice the rate of inflation over the past decade. According to a report in The Australian, the ABS figures from 2002 – 2012 show that consumers have had to pay 65 per cent more in real dollars for fruit and vegetables than they did in 2002.
According to the report, the data revealed that an average basket of commonly purchased goods has risen in price by 31 per cent in the decade. Furthermore, electricity prices rose by 103 per cent in the same period. Water and sewerage scored the highest price increase, 111 per cent in the ten year period. This was attributed to the effects of the drought, water catchment infrastructure, and building desalination plants.
By contrast, the September ABS consumer price index (CPI) figures released last week showed food and non-alcoholic beverages were up 1.9 per cent from June 2012. Alcohol and tobacco rose 0.9 per cent from the previous June quarter. Overall CPI that had been “seasonally adjusted” rose 1.2 per cent for the quarter.
According to The Australian newspaper the most significant price rise for the quarter was in the electricity sector, which rose 15.3 per cent, which could be partially attributed to the carbon tax.