20September%20-%20RPI%20Report

St Vincent de Paul Society St Vincent de Paul Society Victoria Inc. Phone +61 03 9895 5816 Policy and Research Unit Mobile +61 0439 357 129 Locked Box 4800 Fax +61 03 9895 5850 Box Hill Vic 3128 gavind@svdp‐vic.org.au www.vinnies.org.au/vic

Winners and Losers – the Relative Price Index

The CPI and the implications of changing cost pressures on various household types and income groups

Melbourne

September 2008

Gavin Dufty Manager Research & Policy

Data analysis, processing and reporting: Ian Macmillan Transditch Research and Policy Support www.transditch.net

http://www.transditch.net/

Table of Contents Abstract .......................................................... ix

Introduction ..................................................... 1

Background.............................................................. 1

Methodology.................................................... 2

The Consumer Price index.......................................... 2

Concepts...............................................................................2 Price indexes ............................................................................2 Price Index Weighting ..............................................................5 Survey populations...................................................................8 Illustration of changes in price indexes and the CPI...................8 The average household .......................................................... 10

The Relative Price Index .......................................... 10 RPI calculation methods ......................................................... 10

Specific consumption patterns............................................ 11 Housing and Transport subgroup weights .............................. 11

Long‐term CPI changes ......................................................14 Comparison of the CPI and Melbourne’s All Groups index....... 14

Cost changes ...................................................15

Price changes in groups and various subgroups.......... 15

Long‐term price trends ....................................................... 15 Food prices............................................................................. 16 Alcohol and Tobacco prices .................................................... 18 Clothing and Footwear prices .................................................20 Housing prices........................................................................22 Housing prices – Utilities ........................................................24 Household Contents and Services ..........................................26 Health prices .......................................................................... 30 Transport prices ..................................................................... 32 Communications prices .......................................................... 34 Recreation prices.................................................................... 36 Education prices..................................................................... 38 Financial and Insurance Services prices...................................40 Summary ............................................................................... 41

Relative Price Indexes ..................................... 42

Development of the Relative Price Index................... 42

i

The Household Expenditure Survey ....................................42 Background............................................................................42

HES and CPI........................................................................42 Household types selected for RPIs..........................................42 Household groups by Housing and Transport consumption.... 43 Housing..................................................................................44 Transport ...............................................................................45

Long‐term RPI data ............................................................45 RPI baseline............................................................................46

All household groups, Australia................................ 46 Summary ...............................................................................49

Government Pensions and benefits .......................... 50

Aged and Disability Support Pensioners .............................50 RPI Aged and Disability Support Pensions ..............................50

Unemployment, education and sickness allowances...........54 RPI Unemployment, education and sickness allowances ........54

Other government pensions and allowances ......................58 RPI Other government pensions and allowances ....................58

Household family composition................................. 62

One parent with two or more children ................................62 RPI One parent with two or more children..............................62

One parent with one child...................................................66 RPI One parent with one child ................................................66

Couple with three or more children..................................... 70 RPI Couple with three or more children .................................. 70

Couple with one child.......................................................... 74 RPI Couple with one child ....................................................... 74

Lone person........................................................................ 78 RPI Lone person ..................................................................... 78

RPI Couple Only ..................................................................82

Income types..........................................................86

Wage and Salary .................................................................86 RPI Wage and Salary ..............................................................86

Superannuation or other private income ............................90 RPI Superannuation or Other Private Income .........................90

Summary ............................................................... 94 Relative Price Indexes.............................................................94

ii

Appendices..................................................... 98

Appendix 1 .............................................................98

References..........................................................................98

Data Sources.......................................................................98 CPI .........................................................................................98 HES........................................................................................98 Concordance ..........................................................................99 CPI Weighting ........................................................................99

Appendix 2 ........................................................... 100

Tables for reference .......................................................... 100

Selected ABS Definitions and Explanations ...................... 102 The Relative Importance of CPI Items................................... 102 To whom does the CPI relate? .............................................. 102 Using the 14th Series CPI...................................................... 102

Endnotes.......................................................104

List of Tables • Table 1: The CPI Groups (15th Series)...............................................................................................2

• Table 2: CPI Subgroups and Classes relevant to the RPI methods ....................................................3

• Table 3: CPI Subgroups and Classes for general analysis (continues)................................................3

• Table 4: HES classification groups....................................................................................................5

• Table 5: Weight Constants and percentage points contributions .....................................................6

• Table 6: Summary comparison of RPI baseline and CPI.................................................................. 10

• Table 7: Housing and Transport subgroups weights. ...................................................................... 12

• Table 8: Proportions of Households in Housing subgroups ............................................................ 12

• Table 9: Proportions of Households in Transportation subgroups.................................................. 13

• Table 10: Long‐term changes in the CPI and Melbourne’s All Groups index ................................... 14

• Table 11: Group weights in descending order by June 2005 weight constants................................ 15

• Table 12: Food – fresh‐food price change analysis ......................................................................... 17

• Table 13: Food – non‐fresh food price change analysis................................................................... 17

• Table 14: Alcohol and Tobacco price change analysis .................................................................... 19

• Table 15: Clothing and Footwear price change analysis ................................................................. 21

• Table 16: Housing group price change analysis .............................................................................. 23

• Table 17: Other Housing subgroup price change analysis ............................................................... 23

iii

• Table 18: Housing – Utilities subgroup price change analysis .........................................................25

• Table 19: Household Contents and Services price change analysis................................................. 27

• Table 20: Household Services price change analysis ...................................................................... 27

• Table 21: Household Supplies price change analysis ......................................................................29

• Table 22: Health price change analysis........................................................................................... 31

• Table 23: Health Services price change analysis ............................................................................. 31

• Table 24: Transport price change analysis...................................................................................... 33

• Table 25: Private motoring price change analysis........................................................................... 33

• Table 26: Communication price change analysis............................................................................ 35

• Table 27: Recreation price change analysis .................................................................................... 37

• Table 28: Education price change analysis .....................................................................................39

• Table 29: Financial and insurance services price change analysis ...................................................41

• Table 30: Summary of household group selection..........................................................................43

• Table 31: Proportions of Households in Housing subgroups by Family Composition ......................44

• Table 32: Proportions of Households in Housing subgroups by Source of Income..........................44

• Table 33: Proportions of Households in Transportation subgroups by Family Composition ...........45

• Table 34: Proportions of Households in Transportation subgroups by Source of Income ...............45

• Table 35: RPI – CPI comparison – All Household types, Australia ................................................... 47

• Table 36: RPI – CPI Upper Limit component comparison – All Household types, Australia............. 47

• Table 37: RPI – CPI Lower Limit component comparison – All Household types, Australia .............48

• Table 38: Households expenditure comparison – All Household types, Australia ...........................48

• Table 39: Households expenditure comparison, subgroups – All Household types, Australia .........49

• Table 40: Subgroups expenditure comparison – All Household types, Australia ............................49

• Table 41: RPI – CPI comparison – Age and disability support pensions........................................... 51

• Table 42: RPI – CPI component comparison – Age and disability support pensions........................ 51

• Table 43: Weights variance – Age and disability support pensions .................................................52

• Table 44: Weights variance, subgroups – Age and disability support pensions...............................52

• Table 45: Expenditure – Age and disability support pensions ......................................................... 53

• Table 46: Expenditure, subgroups – Age and disability support pensions....................................... 53

• Table 47: Subgroups expenditure comparison – Age and disability support pensions .................... 53

• Table 48: RPI – CPI comparison – Unemployment, education and sickness allowances ................. 55

• Table 49: RPI – CPI component comparison – Unemployment, education and sickness allowances55

• Table 50: Weights variance – Unemployment, education and sickness allowances........................56

• Table 51: Weights variance, subgroups – Unemployment, education and sickness allowances......56

• Table 52: Expenditure – Unemployment, education and sickness allowances................................ 57

iv

• Table 53: Expenditure, subgroups – Unemployment, education and sickness allowances.............. 57

• Table 54: Subgroups expenditure comparison – Unemployment, education and sickness allowances 57

• Table 55: RPI – CPI comparison – Other government pensions and allowances .............................59

• Table 56: RPI – CPI component comparison – Other government pensions and allowances ..........59

• Table 57: Weights variance – Other government pensions and allowances ....................................60

• Table 58: Weights variance, subgroups – Other government pensions and allowances .................60

• Table 59: Expenditure – Other government pensions and allowances............................................61

• Table 60: Expenditure, subgroups – Other government pensions and allowances .........................61

• Table 61: Subgroups expenditure comparison – Other government pensions and allowances.......61

• Table 62: RPI – CPI comparison – One parent with two or more children .......................................63

• Table 63: RPI – CPI component comparison – One parent with two or more children ....................63

• Table 64: Weights variance – One parent with two or more children .............................................64

• Table 65: Weights variance, subgroups – One parent with two or more children ...........................64

• Table 66: Expenditure – One parent with two or more children .....................................................65

• Table 67: Expenditure, subgroups – One parent with two or more children ...................................65

• Table 68: Subgroups expenditure comparison – One parent with two or more children ................65

• Table 69: RPI – CPI comparison – One Parent with One Child ........................................................ 67

• Table 70: RPI – CPI component comparison – One Parent with One Child...................................... 67

• Table 71: Weights variance – One Parent with One Child ...............................................................68

• Table 72: Weights variance, subgroups – One Parent with One Child.............................................68

• Table 73: Expenditure – One Parent with One Child .......................................................................69

• Table 74: Expenditure, subgroups – One Parent with One Child.....................................................69

• Table 75: Subgroups expenditure comparison – One Parent with One Child ..................................69

• Table 76: RPI – CPI comparison – Couple with three or more children............................................ 71

• Table 77: RPI – CPI component comparison – Couple with three or more children ......................... 71

• Table 78: Weights variance – Couple with three or more children .................................................. 72

• Table 79: Weights variance, subgroups – Couple with three or more children ................................ 72

• Table 80: Expenditure – Couple with three or more children.......................................................... 73

• Table 81: Expenditure, subgroups – Couple with three or more children........................................ 73

• Table 82: Subgroups expenditure comparison – Couple with three or more children ..................... 73

• Table 83: RPI – CPI comparison – Couple with one child................................................................. 75

• Table 84: RPI – CPI component comparison – Couple with one child.............................................. 75

• Table 85: Weights variance – Couple with one child ....................................................................... 76

• Table 86: Weights variance, subgroups – Couple with one child..................................................... 76

• Table 87: Expenditure – Couple with one child ............................................................................... 77

v

• Table 88: Expenditure, subgroups – Couple with one child............................................................. 77

• Table 89: Subgroups expenditure comparison – Couple with one child.......................................... 77

• Table 90: RPI – CPI comparison – Lone person............................................................................... 79

• Table 91: RPI – CPI component comparison – Lone person ............................................................ 79

• Table 92: Weights variance – Lone person .....................................................................................80

• Table 93: Weights variance, subgroups – Lone person ...................................................................80

• Table 94: Expenditure – Lone person ............................................................................................. 81

• Table 95: Expenditure, subgroups – Lone person........................................................................... 81

• Table 96: Subgroups expenditure comparison – Lone person ........................................................ 81

• Table 97: RPI – CPI comparison – Couple Only ...............................................................................83

• Table 98: RPI – CPI component comparison – Couple Only ............................................................83

• Table 99: Weights variance – Couple Only .....................................................................................84

• Table 100: Weights variance, subgroups – Couple Only .................................................................84

• Table 101: Expenditure – Couple Only............................................................................................85

• Table 102: Expenditure, subgroups – Couple Only .........................................................................85

• Table 103: Subgroups expenditure comparison – Couple Only.......................................................85

• Table 104: RPI – CPI comparison – Wage and Salary ...................................................................... 87

• Table 105: RPI – CPI component comparison – Wage and Salary ................................................... 87

• Table 106: Weights variance – Wage and Salary ............................................................................88

• Table 107: Weights variance, subgroups – Wage and Salary...........................................................88

• Table 108: Expenditure – Wage and Salary ....................................................................................89

• Table 109: Expenditure, subgroups – Wage and Salary ..................................................................89

• Table 110: Subgroups expenditure comparison – Wage and Salary................................................89

• Table 111: RPI – CPI comparison – Superannuation or other private income ..................................91

• Table 112: RPI – CPI component comparison – Superannuation or other private income...............91

• Table 113: Weights variance – Superannuation or other private income ........................................92

• Table 114: Weights variance, subgroups – Superannuation or other private income......................92

• Table 115: Expenditure – Superannuation or other private income ................................................93

• Table 116: Expenditure, subgroups – Superannuation or Other Private Income.............................93

• Table 117: Subgroups expenditure comparison – Superannuation or Other Private Income...........93

• Table 118: Household Group Selection details ............................................................................. 100

• Table 119: Melbourne Metcard fares ............................................................................................ 101

vi

List of Figures • Figure 1: Weight Constants – normalised CPI basket weights ..........................................................6

• Figure 2: Price indexes with greater deviation from the CPI .............................................................9

• Figure 3: Price indexes with less deviation from the CPI ...................................................................9

• Figure 4: Validation of RPI calculations against the CPI.................................................................. 11

• Figure 5: Food – fresh food price change comparison .................................................................... 16

• Figure 6: Food – non‐fresh food price change comparison............................................................. 16

• Figure 7: Alcohol and Tobacco price change comparison ............................................................... 18

• Figure 8: Alcohol subgroups price change comparison................................................................... 18

• Figure 9: Clothing and Footwear – Adult Clothing price change comparison .................................20

• Figure 10: Children's and Infants' Clothing, and Footwear price change comparison......................20

• Figure 11: Housing group price change comparison .......................................................................22

• Figure 12: Other Housing subgroup price change comparison .......................................................22

• Figure 13: Housing – Utilities subgroup price change comparison ..................................................24

• Figure 14: Household Contents and Services price change comparison .........................................26

• Figure 15: Household Services price change comparison ...............................................................26

• Figure 16: Household Supplies price change comparison ...............................................................28

• Figure 17: Health price change comparison.................................................................................... 30

• Figure 18: Health Services price change comparison...................................................................... 30

• Figure 19: Transport price change comparison............................................................................... 32

• Figure 20: Private motoring price change comparison ................................................................... 32

• Figure 21: Communications price change comparison ...................................................................34

• Figure 22: Recreation price change comparison.............................................................................36

• Figure 23: Education price change comparison .............................................................................. 38

• Figure 24: Financial and Insurance Services price change comparison ...........................................40

• Figure 25: RPI, All Household types, Australia................................................................................46

• Figure 26: RPI Age and disability support pensions ........................................................................50

• Figure 27: RPI Unemployment, education and sickness allowances ...............................................54

• Figure 28: RPI Other government pensions and allowances...........................................................58

• Figure 29: RPI One parent with two or more children.....................................................................62

• Figure 30: RPI One Parent with One Child ......................................................................................66

• Figure 31: RPI Couple with three or more children.......................................................................... 70

• Figure 32: RPI Couple with one child .............................................................................................. 74

• Figure 33: RPI Lone person............................................................................................................. 78

vii

• Figure 34: RPI Couple Only.............................................................................................................82

• Figure 35: RPI Wage and Salary......................................................................................................86

• Figure 36: RPI Superannuation or other private income .................................................................90

viii

ix

Abstract

Much of recent discussion regarding the economic health of Australian families has focused on the growth in household incomes. However there has been little discussion regarding the nature of household expenditure, the changes in the costs of various good and services, and the resulting implications that this has on various income groups and household types.

This paper will update the Relative Price Index (RPI) and explore the distributional impact of changes in the costs of various goods and services on household types and various income sources.

The Relative Price Index indicates that there have been structural changes in the cost burden faced by various household groups as defined by source of income, family composition of the household and/or patterns of expenditure on housing and transport. These changes are based on combinations of different household expenditure patterns and different rates of change in the prices of particular groups of goods and services. It also demonstrates that Australians, many of them reliant on particular goods and services, have had significant increases in cost pressures.

This paper concludes that these increased cost pressures have disproportionately impacted upon various household types depending upon the stages of their life cycles, and finds that since 1990 there has been a growth in inequality due to changes in the cost burdens of various good and services.

These findings raise significant social policy issues for governments and the broader community, as the changing nature of both economic and social justice are documented.

Introduction Background

Introduction Background

The Society of St Vincent de Paul (SVDP), its members, and others within the community welfare sector have continued to document increased demand for their social welfare services.

However when SVDP articulates our day‐to‐day experiences, many decision makers and public commentators argue that such experiences must be exaggerations, isolated to particular areas or particular household types. Decision makers support their claims by highlighting trends in broad headline economic indicators such as the underlying CPI rate, the changes to wages and salaries and other indicators of positive economic growth. This it is argued indicates that, as costs have risen at a relatively low rate (as indicated by the CPI) and that as incomes continue to rise, overall the individuals within the community are better off.

This paper seeks to investigate further how SVDP daily experiences can be explained in a manner that is consistent with the broad headline economic data. Practical experience from our services served to inform the initial investigation. This experience strongly suggested that particular households within the community were being disproportionately impacted by certain changes in prices of goods and services and as a result were ‘falling behind’. Furthermore, this experience indicated that changes in particular costs often impacted in a disproportionate manner on particular groups within the community. For example, the impacts of educations costs on large families or changes in the cost of essential services on government pension recipients.

This research is an attempt to contextualise the applicability of the Consumer Price Index (CPI) as an accurate cost pressure indicator for a variety of household groupings within the community.

Concepts Melbourne, September 2008 1

Methodology The Consumer Price index


Concepts

Price indexes

The ABS publishes quarterly price indexes for specific groups of household goods and services which are combined in what is commonly known as the Consumer Price Index (CPI). Thus the CPI is a composite of separate price indexes. It is “specifically designed as a general measure of price inflation for the household sector as a whole.”1

The CPI comprises a series of short term indexes “…which are chain linked together to form a continuous long term series. This approach allows changes in expenditure patterns to be reflected in the CPI. The CPI now comprises fifteen linked indexes.”2

CPI Groups

The CPI covers a wide selection of goods and services, arranged into groups, subgroups, classes and ultimately, individual items. Various elements of the groupings have changed in the different series of the CPI, particularly over the last two decades. In the 15th and current series, the eleven main groups are as follows:

Number CPI Group

1 Food 2 Alcohol and tobacco 3 Clothing and footwear 4 Housing 5 Household contents and services 6 Health 7 Transportation 8 Communication 9 Recreation

10 Education 11 Financial and insurance services

CPI Groups (goods and services)

• Table 1: The CPI Groups (15th Series)

Each group is comprised of smaller subgroups, which contain individual classes of items.3 For example, see Table 2, following, which shows the subgroups which are particularly relevant to the methods used for calculating the RPIs. Further subgroups of general interest in this analysis are shown in the Table 3.



Group CPI Subgroup CPI Class

4. Housing 4.1 Rents 4.2 Utilities 4.3 Other housing

House purchase Property rates and charges House repairs and maintenance

7. Transportation7.1 Private motoring 7.2 Urban transport fares

11. Financial and insurance services11.1 Financial services11.2 Insurance Services

CPI Subgroups relevant to RPI methods

• Table 2: CPI Subgroups and Classes relevant to the RPI methods

Number CPI Subgroups CPI Classes

1. Food Dairy and related products Bread and cereal productsMeat and seafoods Fruit and vegetablesNon-alcoholic drinks and snack foodMeals out and takeaway foodsOther food

Eggs Jams, honey and sandwich spreads Tea, coffee and food drinks Food additives & condimentsFats and oils Food n.e.c.

2. Alcohol and tobacco Alcoholic drinks

Beer Wine Spirits

Tobacco 3. Clothing and footwear

Men's clothing Women's clothing Children's and infants' clothingFootwear

CPI Subgroups and selected Classes

• Table 3: CPI Subgroups and Classes for general analysis (continues)



4. Housing Rents Utilities

Electricity Gas and other household fuelsWater and sewerage

Other housing House purchase Property rates and charges House repairs and maintenance

5. Household contents and services Furniture and furnishingsHousehold appliances utensils and toolsHousehold Supplies

Childcare Hairdressing and personal care servicesOther household services

Household Services Household cleaning agentsToiletries and personal care productsOther Household Supplies

6. Health Health services

Hospital and medical servicesOptical services Dental services

Pharmaceuticals 7. Transportation

Private motoring Motor vehicles Automotive fuel Motor vehicle repair and servicingMotor vehicle parts and accessoriesOther motoring charges

Urban transport fares Urban transport fares

8. Communication Communication

PostalTelecommunication

9. Recreation Audio, visual and computingBooks, newspapers and magazinesSport and other recreationHoliday travel and accommodation

10. Education Education

Preschool and primary educationSecondary education Tertiary education

11. Financial and insurance services Financial services

Deposit and Loan Facilities Other Financial Services

Insurance services Insurance services

• Table 3: CPI Subgroups and Classes for general analysis (continued)




Price indexes and the CPI

Price indexes are measures of the relative change in prices, relative to 1989–90 prices which are indexed at approximately one hundred (100) points. The CPI is a weighted average of the individual indexes, both expressed in points. “The CPI measures the changes in the price of a fixed basket of goods and services acquired by household consumers”.1 The composition of this basket is held fixed within a given period, such as the duration of a series.

Price Index Weighting

Group price indexes are weighted in proportion to group contributions to the basket of household goods and services.

Household Expenditure Survey

The ABS derives these proportions primarily from the Household Expenditure Survey (HES) but there are some “…weaknesses in the HES data for CPI purposes…”4 so they are supplemented with expenditure data from other sources. The weaknesses include that:

“The HES records all data as reported by households, with no adjustment for known cases of underreporting, especially in expenditure on alcohol and tobacco.

“Some expenditures captured in the HES are not fully within the period of recall and that of recording in the HES.”4

The HES details the expenditure, income and characteristics of households in private dwellings throughout Australia. It categorises goods and services differently to the CPI, so a concordance5 between the two is required to enable calculation of weightings for the CPI groups. The main HES goods and services groups are listed in Table 4, following.

Number Goods and Services

1 Current housing costs2 Domestic fuel and power3 Food and non-alcoholic beverages4 Alcoholic beverages5 Tobacco products6 Clothing and footwear7 Household furnishings and equipment8 Household services and operation9 Medical care and health expenses

10 Transport11 Recreation12 Personal care13 Miscellaneous goods and services

HES classification groups

• Table 4: HES classification groups

For more detail on the HES, see The Household Expenditure Survey, page 42.


The RPI calculates the CPI basket weight constants, shown in Figure 1 below, as part of its methods, outlined on page 7 (next page).

Normalised CPI Basket Weights, All Household Groups, Australia

Food Australia , 13.5%

Alcohol and tobacco Australia , 4.1%

Clothing and footwear Australia , 4.9%

Housing Australia , 21.0%

Household contents and services Australia , 10.9%

Health Australia , 3.0%

Transportation Australia , 12.1%

Communication Australia , 4.1%

Recreation Australia , 12.2%

Education Australia , 1.5%

Financial and insurance services Australia , 12.8%

Weight Constants, CPI Groups, Australia

• Figure 1: Weight Constants – normalised CPI basket weights

Group and RegionABS Bakset Weight

Constants, All Household Groups

Normalised CPI Basket Weights, All Household Groups

Percentage contribution to the

All groups CPI

Variance, weight to

contribution

1 Food Australia 14.7% 13.5% 15.4% 14.0%2 Alcohol and tobacco Australia 4.4% 4.1% 6.8% 66.4%3 Clothing and footwear Australia 5.3% 4.9% 3.9% -19.6%4 Housing Australia 22.7% 21.0% 19.5% -6.9%5 Household contents and services Australia 11.8% 10.9% 9.6% -11.5%6 Health Australia 3.3% 3.0% 4.7% 54.3%7 Transportation Australia 13.1% 12.1% 13.1% 8.6%8 Communication Australia 4.4% 4.1% 3.3% -19.4%9 Recreation Australia 13.2% 12.2% 11.6% -5.1%10 Education Australia 1.7% 1.5% 2.7% 79.1%11 Financial and insurance services Australia 13.8% 12.8% 9.3% -27.0%

Total 108.3% 100.0% 100.0% -

Weight Constants, CPI Groups, Australia

• Table 5: Weight Constants and percentage points contributions



Quantity and price components

A careful distinction needs to be drawn between:

1) The basket‐proportion weights that are applied to the group price indexes to calculate the CPI; and,

2) The “points contribution” weights that each group makes to the total CPI points.

The weights for calculating the CPI are effectively quantity or “volume” components, that is, the proportion of the total basket of goods and services that the quantity of goods and services in each group represents, expressed as the share of expenditure on the basket. However:

“Although the weights are expressed in terms of expenditure shares, it is not the expenditure shares that are held constant (or fixed) from period to period. What is [sic] held constant are the quantities of goods or services underpinning these expenditures (where expenditure is given by the product of quantity and price). Presentation of weights in expenditure terms reflects the fact that it is simply not possible to present quantity weights in a meaningful way.”6

Note that if the quantities are to be held constant for the given period then, if the “expenditure is given by the product of quantity and price”, this can only be so at the beginning of the period. Furthermore, although these weights reflect price components, the price components are not necessarily simple or direct factors in calculating the weights.

Weighting factors and points contribution

Basket‐proportion weights are thus an input factor to CPI calculations and are considered as weighting factors or “weight constants” in the RPI methods (i.e., as used in this analysis). They are not published explicitly by the ABS but are implicit in published data.

On the other hand, the weights expressed as “points contributions” to the total CPI directly reflect both quantity and the price components, that is weight constants and price indexes, including quarterly changes in price indexes, and are the results of CPI calculations rather than inputs to them.

The RPI derives the ABS’ group weighting factors by dividing the points contribution by the price index, both taken at the beginning of a given period (usually the start of a series). From this it is apparent that the weight of the household basket of goods and services has increased to 108.3% in the 15th Series, because of the addition of the Financial Services subgroup to the basket.

Initially, for the March and June 2008 draft analyses, the RPI weight constants were calculated using the points contributions for the weighted average of eight capital cities (i.e., Australia as a whole) but with the price indexes specific to the selected region (i.e., capital city, or to Australia as a whole, for the Australia RPIs). That is, the pattern of points contributions averaged across the eight capital cities is assumed to apply in each capital city, with the resultant weight constants and overall basket weight modified by higher and lower capital city price indexes. The alternative would be to calculate the RPI weight constants using the price indexes for Australia as a whole, i.e., each capital city uses the same weight constants as the average for Australia as a whole.

Although it may be possible to use the points contributions of individual capital cities to calculate weights which are more specific to the capital cities, the expenditure component of the RPI weights and the associated adjustment factors can be accurately calculated 0nly for Australia as a whole (i.e., the weighted average of eight capital cities) because the household‐specific HES data on which the RPI depends directly for weighting factors, is only available for Australia as a whole.



These methods are applied exactly for the 15th and the 14th series but, increasingly, approximations are incorporated back towards 1990, due to limits on the availability of equivalent and consistent categories of data.

Survey populations

CPI sample

The reference population for the Australian CPI is all private households in the eight capital cities. “This group is termed 'the CPI population group'… The current series CPI population group represents about 64% of all Australian private households.”7

”Not all people are part of a private household, that is, reside in private dwellings. Examples of non‐private dwellings include hotels, boarding houses and institutions such as gaols and university residences. Expenditure by persons who reside in non‐private dwellings is excluded from the CPI.”8

HES sample

The 2003‐04 HES samples 6,957 households “…resident in private dwellings throughout Australia”9, i.e., it includes “…urban and rural areas of Australia, covering about 98% of the people living in Australia”.10

It defines private dwellings as:

“…houses, flats, home units, caravans, garages, tents and other structures that were used as places of residence at the time of interview. Long‐stay caravan parks are also included. These are distinct from non‐private dwellings which include hotels, boarding schools, boarding houses and institutions. Residents of non‐private dwellings are excluded.”10

The HES also excludes:

“Households in collection districts defined as very remote or Indigenous Communities ‐ this has only a minor impact on aggregate estimates except in the Northern Territory where such households account for about 23% of the population.” 10

Illustration of changes in price indexes and the CPI

To illustrate the extent to which different price indexes have diverged from the CPI since 1990, two examples are given in Figure 1: Education has one of the highest and most rapidly increasing indexes, and Communication one of the lowest and most constant indexes.

A contrasting example of price indexes with less divergence from the CPI is given in Figure 2, showing Food and Housing. Note: “All groups, Melbourne” is effectively the CPI for Melbourne, a more valid comparison in this case than the usual CPI (i.e., the CPI is “All groups, Australia”, ABS parlance for “all price groups”).

Although the Education price index is one of the highest, Education makes the lowest contribution to the CPI because of its low weight factor. In contrast, Food and Housing make the two highest contributions to the CPI, largely because of high weights.



Comparison of selected Group price indexes and the CPI

Two group price indexes with wider deviation from the Consumer Price Index (CPI)

All groups Australia , Jun-2008, 164.6

Education Australia , Jun-2008, 282.6

Communication Australia , Jun-2008, 111.2

80

100

120

140

160

180

200

220

240

260

280

300

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

Education has one of the the highest price indexes, and Communication one of the lowest.

• Figure 2: Price indexes with greater deviation from the CPI

Two group price indexes with less deviation from the Consumer Price Index (CPI)


Housing Australia , Jun-2008, 143.4

Food Australia , Jun-2008, 179.5

80

100

120

140

160

180

200

220

240

260

280

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

Food and Housing are two price indexes which currently run closer to the CPI.

• Figure 3: Price indexes with less deviation from the CPI


Methodology The Relative Price Index

The average household

The basket of household goods and services is based on “…the average expenditure of all households, rather than the expenditure of the average household.11” Not only does this mean that “Individual households may have significantly higher or lower expenditure on particular items than the average would suggest”12, but that broad subgroups of households may have significantly different expenditure patterns, which potentially result in different rates of overall price change per household type.

The Relative Price Index

RPI calculation methods

The Relative Price Index is a set of price change indexes specific to different types of households, whereas the CPI is based on the “average household”. These household types are currently defined by either the family composition or the principal income source of the household (including government pensions and benefits) and, in addition, on occupancy and transport types.

The RPI is based on the same price index data as the CPI, however, the RPI weighting factors are calculated per household type, directly from HES expenditure items data, and without direct reference to the additional sources used by the ABS.

The RPI weighting factors are based on three subsets of the HES data: Beneficiaries of Government Pensions and Allowances13, Family Composition of Household14, and Principal Household Income Sources15.

The RPI uses weighting adjustment factors to compensate for the lack of additional sources of expenditure data. The adjustment factors are derived by comparing RPI weighting factors based on HES data in aggregate (i.e., for all household types combined) with the corresponding CPI weighting factors. The CPI weighting factors are divided by the RPI aggregate weighting factors to produce a set of weight adjustment factors. These are subsequently used to factor‐up the RPI weight constants for each household type. Consequently, this analysis assumes that, across household types, there will be no significant variations in the ABS adjustments for weaknesses in the HES data (see Household Expenditure Survey, page 5, for explanation of the weaknesses and adjustments).

Validation of baseline RPI calculations

The methods for calculating RPIs are validated in the first instance by calculating the RPI for all price groups and for all household types combined and comparing the results to the CPI. The results are plotted in the following chart (Figure 4) and summarised in Table 6 (below).

These data show a maximum of plus 0.3 points and minus 0.5 points deviation between the RPI baseline for All Household Types Australia and the CPI Australia.

Period To QuarterGreatest points difference,

RPI baseline to CPI, positive

Greatest points difference, RPI baseline to CPI,

negativeSince 1990 Jun-2008 0.3 -0.511th to 13th Series Mar-2000 0.3 -0.514th Series Mar-2005 0.1 -0.415th Series Jun-2008 0.1 0.0

Points difference between RPI baseline and CPI

• Table 6: Summary comparison of RPI baseline and CPI



Specific consumption patterns

Housing and Transport subgroup weights

The weights of the subgroups of Housing (excluding Utilities) and Transport are important factors because the RPI analyses specific consumption patterns within these groups, i.e., on whether households rent or owner‐occupy, and whether they use private‐motoring or urban transport fares.

RPI baseline for ''All households'', Australia, compared to CPI since 1990

RPI baseline for All households, Australia (? CPI), Jun-2008, 164.6

CPI, Australia , Jun-2008, 164.6

All Groups (? CPI) Australia , Jun-2008, 164.6

RPI, All households, Australia, including basket size increases, Jun-2008,

176.9

12th weight @ 1995

14th Series starts

GST inclusion starts

15th Seriesstarts

12th Series starts

13th Seriesstarts

100

120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

• Figure 4: Validation of RPI calculations against the CPI

The notion is that, for example, the points contribution of the Housing price index could result in a CPI which is significantly understated with respect to the subset of households which rent, because its dominant component is a subgroup with an index which is currently lower ‐ and has a lower rate of increase historically – than its counterpart (see Housing prices, page 22).

These analyses are made initially by applying the basket weight of the whole group (excluding Utilities in the case of Housing) exclusively to the price index of one or other subgroup. The RPI uses this method to establish the RPI upper and lower limit boundaries. These weights are shown in Table 7.

Preferably, the effects of the differences in the expenditure components of the alternate subgroup weights would be minimised, for example by simulating the disaggregation of households from alternate subgroups and calculating weights specifically for the resulting subsets of households, but this is not practicable with the available data and within the scope of this analysis.

Specific consumption patterns Melbourne, September 2008 11



Group and RegionABS Bakset Weight

Constants, All Household Groups



All groups CPI

Variance, weight to

contribution

4.1 Rents Australia 6.1% 5.6% 5.2% -6.8%4.2 Utilities Australia 3.6% 3.3% 3.1% -6.9%4.3 Other Housing Australia 13.0% 12.0% 11.2% -6.9%

22.7% 21.0% 19.5% - 7.1 Private motoring Australia 12.4% 11.4% 12.4% 8.5%7.2 Urban transport fares Australia 0.7% 0.7% 0.7% 8.9%

Total 13.1% 12.1% 13.1% -

Weight Constants, CPI Subgroups for RPI methods, Australia

• Table 7: Housing and Transport subgroups weights.

On the face of it, 12.0% of the “average household” basket is spent as owner‐occupiers and 5.6% on rent. However, the two subgroups Owner‐occupier (i.e., Other Housing) and Rental, are mutually exclusive, that is, “No single household will incur both these expenses on their principal residence at the same time”.16 Here the concept of “the average household” comes into play: the weights represent the average expenditures of all households combined, not the average household’s expenditure. Consequently, the subgroup weights reflect a combination of subsample sizes and average expenditures per subgroup (the latter incorporating quantity and price components, of course).

Does this have implications for the method of transferring group weights to subgroup price indexes? A concern with this method is that, if the group weight is generated predominantly by a higher average expenditure in one subgroup, then applying the group weight to a second subgroup with significantly lower average expenditure would generate an artificially high points contribution, i.e., one related to the weight of the first subgroup rather than the price index of the second subgroup.

To consider the effects of applying the basket weight of a group exclusively to one of its subgroups, the Housing and Transport subgroup sample sizes and related expenditures are analysed (with the Utilities subgroup excluded from the Housing group).

Housing and Transport subgroup sample proportions

Sample‐size data is available for two of the three household subsets used in the current RPI, Family Composition of Household and Principal Household Income Sources. The estimated proportions of households in each subgroup are available from either of these datasets, for all household types combined.

The estimated proportions of households in the two Housing subgroups (excluding Utilities) are shown in Table 8.

Housing subgroups, excluding the Utilities subgroup Owner-occupier Rental

Total, excluding Utilities

Ratio, Owner-occupier to Rental

All household types (number) 5,027 1,856 6,883 2.71All household types (percentage) 73.0% 27.0% 100.0% 2.71Approximate average expenditure 132.68$ 172.82$ 143.50$ 0.77

Housing excluding Utilities: approximate proportions of Households per subgroup

• Table 8: Proportions of Households in Housing subgroups

Since the Housing subgroups are mutually exclusive, the analysis is fairly straightforward. Table 8 shows that, in terms of numbers of households, the Housing group is dominated by the Owner‐occupier



subgroup, by a factor of approximately 2.7 times the Rental subgroup, yet the ratio of the Owner‐occupier to Rents weight is 2.1, a significantly lower factor (see Table 40, page 49) indicating a lower underlying average unit expenditure for the Owner‐occupier.

This implies that application of the Housing group weight (excluding Utilities) to the Rents subgroup will underestimate the points contribution of Housing for the rents‐only subset of all household types.

The Private Motoring and Urban Transport Fares subgroups are not mutually exclusive, so this part of the analysis is more problematic. Table 9 show the approximate proportion of households exclusive to the Urban Transport Fares subgroup: this is inferred from the difference between the numbers of respondents in the Transportation group and the Private Motoring subgroup (assuming that households which use neither form of transport did not respond in the transportation group at all).

Transportation subgroupsPrivate Motoring, some with Urban Transport Fares

Urban Transport Fares only Total

Ratio, Private Motoring to Urban Transport Fares

Urban Transport Fares and Private

Motoring

All households (number) 6,044 649 6,693 9.31 1,038 All household types (percentage) 90.3% 9.7% 100.0% 9.31 15.5%"Guestimate" of average expenditure 119.89$ 11.86$ 10.11 3.71$

Transportation: very approximate proportions of Households per subgroup

• Table 9: Proportions of Households in Transportation subgroups

roximately 90% of Transportation or 9.3 times the estimated 10% of households using only Urban Transport Fares. In expenditure terms, the Private From Table 9, Private Motoring households represent app

Motoring subgroup represents 94.5% of Transportation or 17 times the 5.5% spent on Urban Transport Fares (see Table 40, page 49). Whilst this could be taken to mean that the average expenditure on Private Motoring is greater than the Urban Transport Fares average, the expenditure data for the Urban Transport Fares subgroup unavoidably includes expenditure by an unknown number of households which are also in the Private Motoring subgroup (and vice versa).

For households with expenditure on Urban Transport Fares, a majority have only part of their transport expenditure on it, having expenditure on Private Transport as well. Consequently, not only is the apparent average expenditure on Urban Transport Fares diluted by the size of the subsample, its value is potentially further diluted by the partial transport expenditures of Private Motoring households.

By this method, the RPI will almost certainly overestimate the points contribution of Transportation for the Urban‐Transport‐Fares‐only subset of all household types, but it is impossible to quantify with the

really be done at present is for the reader to compare the average weekly household expenditure (AWHE) on Transportation as a whole, against the likely or expected expenditure in a

Fares weighting per household group, according to the relative proportion of households using Urban Transport Fares only per group.

current data sets.

The best that can

subgroup, e.g., consider to what subset of the population the Transportation AWHE of $109.97 (for All Household types, Australia) would apply as the AWHE for Urban Transport Fares only. For example $110 currently falls short of purchasing weekly Metcards for 2 adults and one child (see Melbourne Metcard fares effective until December 2008, Table 119, page 101). Such comparisons also need to be made in relation to specific household groups but, in any case, are beyond the current scope of this analysis.

Another approach which could be considered is some form of adjustment to the Urban Transport


Long-term CPI changes Melbourne, September 2008 14

The proportions of the numbers of households in the Housing and Transport subgroups are broken down by Family Composition and Source of Income in Table 31 to Table 34 (pages 44 to 45).

See “Household groups by Housing and Transport consumption, Australia” (page 43) for further analysis and discussion.

Long-term CPI changes

Comparison of the CPI and Melbourne’s All Groups index

e CPI (Australia’s All Groups price index) has increased at a slightly greater rate than Melbourne’s All Groups price index, that is, at a rate 1.3% above it (see Table 10, below). Over the

ncial and Insurance Services rose at 12.4% above Melbourne’s All Groups rate.

Over the period since 1990, th

same period, Melbourne’s price index for All Groups Excluding Fina

CPI and Melbourne’s All Groups price change table

Price Indexes Quarter All grou All groups Excluding Financial ps Australia

All groups Melbourne

2.5Mar-2008 162.2 160.6Jun-2007 157.5 155.6Mar-1990 100.9 100.7In last quarter 2.4 1.9Previous 12 months 7.1 6.9Since 1990 63.7 61.8In last quarter 1.5% 1.2%Previous 12 months 4.5% 4.4%Since 1990 63.1% 61.4%In last quarter 0.3% 0.0%Previous 12 months 0.1% 0.0%Since 1990 1.8% 0.0%In last quarter 25.1% 0.0%Previous 12 months 1.7% 0.0%Since 1990 2.9% 0.0%

7.6%-19.7%-13.2%12.4%

3.8%69.0%-0.2%-0.6%

Percent greater than CPI Melbourne increase

and insurance services Melbourne

170168.4163.7100.6

1.66.3

69.41.0%

Price Index, all household types

Points increase

Percent increase

Difference from CPI Melbourne percent increase

Jun-2008 164.6 16

• Table 10: Long-term changes in the CPI and Melbourne’s All Groups index

Cost changes Price changes in groups and various subgroups


Long-term price trends

The long‐term price trends of the weighted average of eight capital cities for the eleven CPI groups are detailed in the following charts and tables.17 Each chart plots a group price index series, related subgroups and the Melbourne “All Groups” series, since 1990.

Several additional charts plot the classes of selected subgroups, to illustrate how the classes are driving the subgroup trend.

Each table lists the price indexes for June 2008 (the latest quarter), the previous quarter, twelve months prior, and at March 1990, for a group and related subgroups. The tables also give the points increase and the percentage increase for the group and related subgroups over the latest quarter, twelve months and since 1990. Finally, the differences and percentage differences between these values and the Melbourne “All Groups” price index increase for the same period is given. The values for the Melbourne “All Groups” price index itself are shown at the end of the Methodology chapter, page 14, with the related CPI values.

Note: The Melbourne “All Groups” price index is sometimes referred to as the CPI Melbourne (or the Melbourne CPI).

The relative impact on the CPI of a group’s long‐term price change is related to the basket weight of the group, so the June 2005 weights are shown in Table 11 below, in descending order by weight.

ABS Bakset Weight Constants, All

Household Groups



All groups CPI

Variance, weight to

contribution

1 Housing 22.7% 21.0% 19.5% -6.9%2 Food 14.7% 13.5% 15.4% 14.0%3 Financial and insurance services 13.8% 12.8% 9.3% -27.0%4 Recreation 13.2% 12.2% 11.6% -5.1%5 Transportation 13.1% 12.1% 13.1% 8.6%6 Household contents and services 11.8% 10.9% 9.6% -11.5%7 Clothing and footwear 5.3% 4.9% 3.9% -19.6%8 Communication 4.4% 4.1% 3.3% -19.4%9 Alcohol and tobacco 4.4% 4.1% 6.8% 66.4%10 Health 3.3% 3.0% 4.7% 54.3%11 Education 1.7% 1.5% 2.7% 79.1%

Total 108.3% 100.0% 100.0% -

Weight Constants ordered by weight, CPI Groups, Australia

Order by weight, Group

• Table 11: Group weights in descending order by June 2005 weight constants.

Long-term price trends Melbourne, September 2008 15


Food prices

The Food group and it's fresh-food subgroups


Dairy and related products Melbourne , Jun-2008,

208.0

Bread and cereal products Melbourne , Jun-2008,

201.3

Meat and seafoods Melbourne , Jun-2008,

146.8

Fruit and vegetables Melbourne , Jun-2008,

169.5

Food Melbourne , Jun-2008, 177.6

80

100

120

140

160

180

200

220

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Food group has six subgroups, including four main fresh food subgroups: Dairy and related products Bread and cereal products Meat and seafoods Fruit and vegetables.

Comparison of price changes

• Figure 5: Food – fresh food price change comparison

The Food group and it's three non-fresh-food subgroups


Non-alcoholic drinks and snack food Melbourne ,

Jun-2008, 181.2

Meals out and take away foods Melbourne , Jun-

2008, 183.5

Other food Melbourne , Jun-2008, 160.6

Food Melbourne , Jun-2008, 177.6

80

100

120

140

160

180

200

220

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Food group has six subgroups, including three non-fresh food subgroups: Non-alcoholic drinks and snack food Meals out and takeaway foods Other food.

The "Other food" subgroup is made up of six classes: Eggs Jams, honey and sandwich spreads Tea, coffee and food drinks Food additives & condiments Fats and oils Food n.e.c..


• Figure 6: Food – non-fresh food price change comparison



Food price change tables

Group, Subgroup or Class Quarter Food

Dairy and related

products

Bread and cereal products

Meat and seafoods

Fruit and vegetables

Jun-2008 177.6 208 201.3 146.8 169.5Mar-2008 177.4 202.7 201.5 147.1 177.2Jun-2007 171.8 186.8 191.9 143.3 178.4Mar-1990 98.6 101.7 100.9 100 83.6In last quarter 0.2 5.3 -0.2 -0.3 -7.7Previous 12 months 5.8 21.2 9.4 3.5 -8.9Since 1990 79 106.3 100.4 46.8 85.9In last quarter 0.1% 2.6% -0.1% -0.2% -4.3%Previous 12 months 3.4% 11.3% 4.9% 2.4% -5.0%Since 1990 80.1% 46.8%In last quarter -1.1% 1.4% -1.3% -1.4% -5.5%Previous 12 months -1.1% 6.9% 0.5% -2.0% -9.4%Since 1990 18.8% 43.2% 38.1% -14.6% 41.4%In last quarter -90.5% 121.0% -108.4% -117.2% -467.3%Previous 12 months -23.9% 155.9% 10.5% -44.9% -212.5%Since 1990 30.6% -23.7%



Points increase

Percent increase


104.5% 99.5% 102.8%

70.3% 62.1% 67.4% • Table 12: Food – fresh-food price change analysis

Group, Subgroup or Class Quarter Food

(continued)

Non-alcoholic drinks and snack food

Meals out and take away foods Other food

Jun-2008 177.6 181.2 183.5 160.6Mar-2008 177.4 180.1 181.5 157.3Jun-2007 171.8 174.7 174.4 154.2Mar-1990 98.6 101.2 100.6 100.7In last quarter 0.2 1.1 2 3.3Previous 12 months 5.8 6.5 9.1 6.4Since 1990 79 80 82.9 59.9In last quarter 0.1% 0.6% 1.1% 2.1%Previous 12 months 3.4% 3.7% 5.2% 4.2%Since 1990 80.1% 79.1% 82.4% 59.5%In last quarter -1.1% -0.6% -0.1% 0.9%Previous 12 months -1.1% -0.7% 0.8% -0.3%Since 1990 18.8% 17.7% 21.0% -1.9%In last quarter -90.5% -48.4% -6.9% 77.3%Previous 12 months -23.9% -16.1% 17.7% -6.4%Since 1990 30.6% 28.8% 34.3% -3.1%




Points increase

Percent increase

• Table 13: Food – non-fresh food price change analysis

Melbourne’s Food price index has increased at a rate 1.31 times greater than Melbourne’s overall inflation rate since 1990, i.e., at a rate 31% above it. Over the same period, the prices of Dairy, Bread and Cereal, and Fruit and Vegetables have risen at rates of 70%, 62%, and 67% above Melbourne’s inflation rate, respectively.

The Food price index has increased at a significantly greater rate than the CPI and it has the second largest basket weight so, at a weight of 13.5%, it is expected to have a strong upward influence on long‐term cost trends for most household types.

Hypothetically at least, households with a relatively high proportion of food expenditure on meat and sea foods would experience a lower upward cost trend than other households.



Alcohol and Tobacco prices

The Alcohol and Tobacco group


Alcoholic drinks Melbourne , Jun-2008, 185.5

Tobacco Melbourne , Jun-2008, 458.0

Alcohol and tobacco Melbourne , Jun-2008,

259.1

100

150

200

250

300

350

400

450

500

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Alcohol and Tobacco group has two subgroups: Alcohol, and Tobacco.


• Figure 7: Alcohol and Tobacco price change comparison

The Alcohol subgroup and classes


Beer Melbourne , Jun-2008, 212.4

Wine Melbourne , Jun-2008, 150.5

Alcoholic drinks Melbourne , Jun-2008, 185.5

Spirits Melbourne , Jun-2008, 189.0

100

120

140

160

180

200

220

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Alcohol subgroup has three classes: Beer, Wine, and Spirits.


• Figure 8: Alcohol subgroups price change comparison



Alcohol and Tobacco price change table

Group, Subgroup or Class Quarter Alcohol and

tobacco Beer Wine Spirits Tobacco

Jun-2008 259.1 212.4 150.5 189 458Mar-2008 254.2 212.3 146.8 179.8 449.9Jun-2007 244.6 197.4 143.2 174.2 439.2Mar-1990 101.3 101.4 100.4 100.9 101.7In last quarter 4.9 0.1 3.7 9.2 8.1Previous 12 months 14.5 15 7.3 14.8 18.8Since 1990 157.8 111 50.1 88.1 356.3In last quarter 1.9% 0.0% 2.5% 5.1% 1.8%Previous 12 months 5.9% 7.6% 5.1% 8.5% 4.3%Since 1990 49.9% 87.3%In last quarter 0.7% -1.1% 1.3% 3.9% 0.6%Previous 12 months 1.5% 3.2% 0.7% 4.1% -0.2%Since 1990 94.4% 48.1% -11.5% 25.9% 289.0%In last quarter 62.9% -96.0% 113.0% 332.5% 52.2%Previous 12 months 33.7% 71.4% 15.0% 91.6% -3.5%Since 1990 -18.7% 42.3%

Percent increase




Points increase

155.8% 109.5% 350.3%

153.8% 78.4% 470.9% • Table 14: Alcohol and Tobacco price change analysis

Melbourne’s alcohol and tobacco price index has increased at a rate 2.54 times greater than Melbourne’s overall inflation rate since 1990, i.e., at a rate 154% above it.

Over the same period, the prices of beer, spirits, and tobacco have risen at rates of 78%, 42%, and 471% above Melbourne’s inflation rate, respectively. In contrast the price of wine has risen at a rate 19% below it.

Although the alcohol and tobacco price index has increased at a significantly greater rate than the CPI, it has the ninth largest basket weight so, at a weight of 4.4%, it is not expected to have a very strong influence on long‐term cost trends.



Clothing and Footwear prices

The Clothing and Footwear group and it's adult clothing subgroups


Clothing and footwear Melbourne , Jun-2008,

110.3

Women's clothing Melbourne , Jun-2008,

108.1

Men's clothing Melbourne , Jun-2008, 112.2

80

100

120

140

160

180

200

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Clothing and Footwear group has four subgroups, including two adult's clothing subgroups: Men's clothing, and Women's clothing.


The other two subgroups are: Children's and infant's clothing, and Footwear.Please see the next graph.

• Figure 9: Clothing and Footwear – Adult Clothing price change comparison

The Clothing and Footwear group and the Child Clothing and Footwear subgroups


Children's and infants' clothing Melbourne , Jun-

2008, 118.2

Footwear Melbourne , Jun-2008, 101.9

Clothing and footwear Melbourne , Jun-2008,

110.3

80

100

120

140

160

180

200

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Clothing and Footwear group has four subgroups, including: Children's and infant's clothing, and Footwear.


The other two subgroups are: Men's clothing, and Women's clothing.Please see the previous graph.

• Figure 10: Children's and Infants' Clothing, and Footwear price change comparison



Clothing and Footwear price change table

Group, Subgroup or Class Quarter Clothing and

footwear Men's clothing Women's clothing Children's and infants' clothing Footwear

Jun-2008 110.3 112.2 108.1 118.2 101.9Mar-2008 106.7 107.8 107.1 115 94.8Jun-2007 112 112.1 109.3 122 106.1Mar-1990 100.1 99.9 100.4 98.1 100.2In last quarter 3.6 4.4 1 3.2 7.1Previous 12 months -1.7 0.1 -1.2 -3.8 -4.2Since 1990 10.2 12.3 7.7 20.1 1.7In last quarter 3.4% 4.1% 0.9% 2.8% 7.5%Previous 12 months -1.5% 0.1% -1.1% -3.1% -4.0%Since 1990 10.2% 12.3% 7.7% 20.5% 1.7%In last quarter 2.2% 2.9% -0.2% 1.6% 6.3%Previous 12 months -6.0% -4.3% -5.5% -7.5% -8.4%Since 1990 -51.2% -49.1% -53.7% -40.9% -59.7%In last quarter 185.2% 245.0% -21.1% 135.2% 533.1%Previous 12 months -134.2% -98.0% -124.8% -170.2% -189.3%Since 1990 -83.4% -79.9% -87.5% -66.6% -97.2%


Points increase

Percent increase


Percent greater than CPI Melbourne increase • Table 15: Clothing and Footwear price change analysis

Melbourne’s clothing and footwear price index has increased at a rate 1.83 times lower than Melbourne’s overall inflation rate since 1990, i.e., at a rate 83% below it.

Over the same period, its subgroup prices have all increased at rates between 66 and 97% below Melbourne’s inflation rate.

The clothing and footwear price index has increased at a significantly lower rate than the CPI but it has only the seventh largest basket weight so, at a weight of 5.3%, it is not expected to have a particularly strong influence on long‐term cost trends for most households.



Housing prices

The Housing group and subgroups

All groups Melbourne , Jun-2008, 162.5

Housing Melbourne , Jun-2008, 126.4

Rents Melbourne , Jun-2008, 159.9

Utilities Melbourne , Jun-2008, 186.6

Other Housing Melbourne , Jun-2008, 118.3

70

90

110

130

150

170

190

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Housing group has three subgroups: Rents, Utilities, and Other Housing. Note that House Purchase is a component of Other Housing, but has only been included since 1998.

Comparison of price indexes

• Figure 11: Housing group price change comparison

The Other Housing subgroup and classes


Other Housing Melbourne , Jun-2008, 118.3

House Purchase Melbourne , Jun-2008,

154.4

Property rates and charges Melbourne , Jun-

2008, 192.2

House repairs and maintenance Melbourne ,

Jun-2008, 169.5

60

80

100

120

140

160

180

200

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Other Housing subgroup currently has three classes: House repairs and maintenance, included since Sep-1980; House Purchase (included since1998), and Property Rates and Charges (included since1998).

Comparison of price indexes and commencement dates

• Figure 12: Other Housing subgroup price change comparison



Housing price change tables

Group, Subgroup or Class Quarter Housing Rents Utilities Other Housing

Jun-2008 126.4 159.9 186.6 118.3Mar-2008 125.9 157.1 188.7 117.9Jun-2007 119.2 150.6 169.9 112.9Mar-1990 101.2 101.1 100.6 101.3In last quarter 0.5 2.8 -2.1 0.4Previous 12 months 7.2 9.3 16.7 5.4Since 1990 25.2 58.8 86 17In last quarter 0.4% 1.8% -1.1% 0.3%Previous 12 months 6.0% 6.2% 9.8% 4.8%Since 1990 24.9% 58.2% 85.5% 16.8%In last quarter -0.8% 0.6% -2.3% -0.8%Previous 12 months 1.6% 1.7% 5.4% 0.3%Since 1990 -36.5% -3.2% 24.1% -44.6%In last quarter -66.4% 50.7% -194.1% -71.3%Previous 12 months 36.2% 39.3% 121.7% 7.9%Since 1990 -59.4% -5.2% 39.3% -72.7%


Points increase

Percent increase


Percent greater than CPI Melbourne increase • Table 16: Housing group price change analysis

Group, Subgroup or Class Quarter Housing Other Housing House Purchase Property rates

and chargesHouse repairs and

maintenance

Jun-2008 126.4 118.3 154.4 192.2 169.5Mar-2008 125.9 117.9 153.9 192.2 168.5Jun-2007 119.2 112.9 146.9 181.2 165.1Mar-1990 101.2 101.3 0 0 99.8In last quarter 0.5 0.4 0.5 0 1Previous 12 months 7.2 5.4 7.5 11 4.4Since 1990 25.2 17 154.4 192.2 69.7In last quarter 0.4% 0.3% 0.3% 0.0% 0.6%Previous 12 months 6.0% 4.8% 5.1% 6.1% 2.7%Since 1990 24.9% 16.8% #DIV/0! #DIV/0! 69.8%In last quarter -0.8% -0.8% -0.9% -1.2% -0.6%Previous 12 months 1.6% 0.3% 0.7% 1.6% -1.8%Since 1990 -36.5% -44.6% #DIV/0! #DIV/0! 8.5%In last quarter -66.4% -71.3% -72.5% -100.0% -49.8%Previous 12 months 36.2% 7.9% 15.1% 36.9% -39.9%Since 1990 -59.4% -72.7% #DIV/0! #DIV/0! 13.8%


Points increase

Percent increase


Percent greater than CPI Melbourne increase • Table 17: Other Housing subgroup price change analysis

Melbourne’s Housing price index has increased at a rate 1.59 times lower than Melbourne’s overall inflation rate since 1990, i.e., at a rate 59% below it. Its subgroups all have different change rates: Utilities have risen at a rate of 39% above Melbourne’s inflation rate, while Rents and House Ownership at 5% and 59% below it, respectively.

At 22.7%, Housing has the largest basket weight but its price index has increased at a significantly lower rate than the CPI, so it is expected to have a strong downward influence on long‐term cost trends for most household types. However, the disparity between the Rent and House Ownership index rates suggests that this effect would not be universal: household groupings with a relatively high proportion of housing expenditure on rent would not experience such a strong downward effect. Table 7 (page 12) shows that, for all households, the Rents weight of 6.1% is about half of the House Ownership weight of 13.0%, although these weights reflect the proportions of households renting and owning houses, not just the average expenditure levels (see Table 8, page 12).



Housing prices – Utilities

Housing group, Utilities subgroup classes


Housing Melbourne , Jun-2008, 126.4

Utilities Melbourne , Jun-2008, 186.6

Electricity Melbourne , Jun-2008, 181.6

Gas and other household fuels Melbourne , Jun-

2008, 193.7

Jun-2001Jun-1998

Water and sewerage Melbourne , Jun-2008,

139.9

80

100

120

140

160

180

200

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Housing group, Utilities subgroup, has three classes: Electricity Gas and other household fuels Water and sewerage (included since June 1998).


• Figure 13: Housing – Utilities subgroup price change comparison



Housing – Utilities price change table

Group, Subgroup or Class Quarter Housing Utilities Electricity Gas and other

household fuelsWater and sewerage

Jun-2008 126.4 186.6 181.6 193.7 139.9Mar-2008 125.9 188.7 186.7 192.9 139.9Jun-2007 119.2 169.9 157.2 182.2 133Mar-1990 101.2 100.6 100.6 100.7 #N/AIn last quarter 0.5 -2.1 -5.1 0.8 0Previous 12 months 7.2 16.7 24.4 11.5 6.9Since 1990 25.2 86 81 93 #N/AIn last quarter 0.4% -1.1% -2.7% 0.4% 0.0%Previous 12 months 6.0% 9.8% 15.5% 6.3% 5.2%Since 1990 24.9% 85.5% 80.5% #N/AIn last quarter -0.8% -2.3% -3.9% -0.8% -1.2%Previous 12 months 1.6% 5.4% 11.1% 1.9% 0.8%Since 1990 -36.5% 24.1% 19.1% 31.0% #N/AIn last quarter -66.4% -194.1% -330.9% -64.9% -100.0%Previous 12 months 36.2% 121.7% 250.0% 42.3% 17.0%Since 1990 -59.4% 39.3% 31.2% #N/A




Points increase

Percent increase92.4%

50.5% • Table 18: Housing – Utilities subgroup price change analysis

Although the Housing price index for Melbourne has increased at 59% below Melbourne’s inflation rate since 1990, the Utilities subgroup has risen at 39% above Melbourne’s rate. The table above shows that Electricity has increased at a rate of 31% and Gas and Other Household Fuels at 51%.

The index for Water and Sewerage only started in June 1998, so the rate from 1990 is not available as such. It appears that Water and Sewerage has increased at about the same rate as inflation since June 1998, but at about the same rate as the other utilities since June 2001 (see Figure 13).

The Utilities subgroup has the smallest proportion of the Housing group weight of 22.7% and, at a weight of 3.6%, it would not be expected to have a particularly strong influence on long‐term cost trends for most household types.



Household Contents and Services

The Household Contents and Services group and subgroups


Household contents and services Melbourne , Jun-

2008, 125.6

Furniture and furnishings Melbourne , Jun-2008,

130.7

Household appliances, utensils and tools

Melbourne , Jun-2008, 101.4

Household Services Melbourne , Jun-2008,

187.9

80

100

120

140

160

180

200

220

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Household contents and services group has four subgroups: Furniture and furnishings Household appliances utensils and tools Household Supplies Household Services.

The Household Services subgroup is made up of three classes: Childcare Hairdressing and personal care services Other household services.


• Figure 14: Household Contents and Services price change comparison

The Household Services subgroup and classes


Household Services Melbourne , Jun-2008,

187.9

Child care Melbourne , Jun-2008, 224.9

Hairdressing and personal care services Melbourne ,

Jun-2008, 183.2

Other household services Melbourne , Jun-2008,

196.4

80

100

120

140

160

180

200

220

240

260

280

300

320

340

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Household Services subgroup is made up of three classes: Childcare Hairdressing and personal care services Other household services.


• Figure 15: Household Services price change comparison



Household Contents and Services price change tables

Group, Subgroup or Class Quarter

Household contents and

services

Furniture and furnishings

Household appliances, utensils

and tools

Household Services

Household Supplies

Jun-2008 125.6 130.7 101.4 187.9 141Mar-2008 124.1 128.6 100.1 187.1 139.3Jun-2007 126.3 131.9 100.7 197.6 138.7Mar-1990 100.9 101.7 100.6 99.8 100.6In last quarter 1.5 2.1 1.3 0.8 1.7Previous 12 months -0.7 -1.2 0.7 -9.7 2.3Since 1990 24.7 29 0.8 88.1 40.4In last quarter 1.2% 1.6% 1.3% 0.4% 1.2%Previous 12 months -0.6% -0.9% 0.7% -4.9% 1.7%Since 1990 24.5% 28.5% 0.8% 88.3% 40.2%In last quarter 0.0% 0.4% 0.1% -0.8% 0.0%Previous 12 months -5.0% -5.3% -3.7% -9.3% -2.8%Since 1990 -36.9% -32.9% -60.6% 26.9% -21.2%In last quarter 2.2% 38.0% 9.8% -63.9% 3.2%Previous 12 months -112.5% -120.5% -84.3% -210.7% -62.6%Since 1990 -60.1% -53.5% -98.7% 43.8% -34.6%

Percent increase




Points increase

• Table 19: Household Contents and Services price change analysis



services

Household Services Child care

Hairdressing and personal care services

Other household services

Jun-2008 125.6 187.9 224.9 183.2 196.4Mar-2008 124.1 187.1 224.1 181.9 196.6Jun-2007 126.3 197.6 320.1 176 188.3Mar-1990 100.9 99.8 102.7 100.2 99.8In last quarter 1.5 0.8 0.8 1.3 -0.2Previous 12 months -0.7 -9.7 -95.2 7.2 8.1Since 1990 24.7 88.1 122.2 83 96.6In last quarter 1.2% 0.4% 0.4% 0.7% -0.1%Previous 12 months -0.6% -4.9% -29.7% 4.1% 4.3%Since 1990 24.5% 88.3% 82.8%In last quarter 0.0% -0.8% -0.8% -0.5% -1.3%Previous 12 months -5.0% -9.3% -34.2% -0.3% -0.1%Since 1990 -36.9% 26.9% 57.6% 21.5% 35.4%In last quarter 2.2% -63.9% -69.8% -39.6% -108.6%Previous 12 months -112.5% -210.7% -770.7% -7.7% -3.0%Since 1990 -60.1% 43.8% 35.0%

Points increase

Percent increase




119.0% 96.8%

93.9% 57.7% • Table 20: Household Services price change analysis

Melbourne’s Household Contents and Services price index has increased at a rate 1.60 times lower than Melbourne’s overall inflation rate since 1990, i.e., at a rate 60% below it. In contrast, its Household Services subgroup has risen at a rate of 44% above Melbourne’s inflation rate, while the Household Supplies subgroup price index has risen at a rate 35% below Melbourne’s inflation rate (see Table 21, page 29).

Household Contents and Services has the sixth largest basket weight, at 10.9%, and its price index has increased at a significantly lower rate than the CPI, so it is expected to exert some significant downward pressure on long‐term cost trends, for most households.

The price indexes of the classes of the Household Services subgroup have risen at significantly different rates: Child Care has risen at a rate of 94% above Melbourne’s inflation rate whereas Hairdressing and Personal Care Services has risen at 35%.



Household Contents and Services – Household Supplies

The Household Supplies subgroup and classes


Household Supplies Melbourne , Jun-2008,

141.0

Household cleaning agents Melbourne , Jun-

2008, 131.7

Toiletries and personal care products Melbourne ,

Jun-2008, 149.5

80

100

120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Household Supplies subgroup is made up of three classes: Household cleaning agents Toiletries and personal care products Other Household Supplies.


• Figure 16: Household Supplies price change comparison



Household Supplies price change tables



services

Household Supplies

Household cleaning agents

Toiletries and personal care

products

Other Household Supplies

Jun-2008 125.6 141 131.7 149.5 147.4Mar-2008 124.1 139.3 134.8 148.9 143.7Jun-2007 126.3 138.7 134.4 150.1 141.7Mar-1990 100.9 100.6 101 101.6 99.6In last quarter 1.5 1.7 -3.1 0.6 3.7Previous 12 months -0.7 2.3 -2.7 -0.6 5.7Since 1990 24.7 40.4 30.7 47.9 47.8In last quarter 1.2% 1.2% -2.3% 0.4% 2.6%Previous 12 months -0.6% 1.7% -2.0% -0.4% 4.0%Since 1990 24.5% 40.2% 30.4% 47.1% 48.0%In last quarter 0.0% 0.0% -3.5% -0.8% 1.4%Previous 12 months -5.0% -2.8% -6.4% -4.8% -0.4%Since 1990 -36.9% -21.2% -31.0% -14.2% -13.4%In last quarter 2.2% 3.2% -294.4% -65.9% 117.6%Previous 12 months -112.5% -62.6% -145.3% -109.0% -9.3%Since 1990 -60.1% -34.6% -50.5% -23.2% -21.8%

Points increase

Percent increase




• Table 21: Household Supplies price change analysis

The price indexes of all three classes of the Household Supplies subgroup have risen at low rates, similar to the subgroup as a whole: Household cleaning agents, Toiletries and Personal Care Products, and Other Household Supplies have risen at 51%, 23% and 22% below Melbourne’s inflation rate.



Health prices

The Health group and subgroups


Health Melbourne , Jun-2008, 253.7

Health services Melbourne , Jun-2008,

276.3

Pharmaceuticals Melbourne , Jun-2008,

163.8

80

100

120

140

160

180

200

220

240

260

280

300

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Health group has two subgroups: Health services Pharmaceuticals.

The Health Services subgroup is made up of three classes: Hospital and medical services Optical services Dental services.


• Figure 17: Health price change comparison

The Health Services subgroup and classes


Health services Melbourne , Jun-2008, 276.3

Hospital and medical services Melbourne , Jun-

2008, 295.0

Optical services Melbourne , Jun-2008,

156.8

Dental services Melbourne , Jun-2008, 235.3

80

100

120

140

160

180

200

220

240

260

280

300

320

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Health Services subgroup has three classes: Hospital and medical services Optical services Dental services.


• Figure 18: Health Services price change comparison



Health price change tables

Group, Subgroup or Class Quarter Health Health services Pharmaceuticals

Jun-2008 253.7 276.3 163.8Mar-2008 247.8 267.4 165.2Jun-2007 242.7 261.8 161.6Mar-1990 101.3 100.3 106.6In last quarter 5.9 8.9 -1.4Previous 12 months 11 14.5 2.2Since 1990 152.4 176 57.2In last quarter 2.4% 3.3% -0.8%Previous 12 months 4.5% 5.5% 1.4%Since 1990 53.7%In last quarter 1.2% 2.1% -2.0%Previous 12 months 0.1% 1.1% -3.1%Since 1990 89.1% 114.1% -7.7%In last quarter 101.3% 181.3% -171.6%Previous 12 months 2.2% 24.9% -69.3%Since 1990 -12.6%



Points increase

Percent increase


150.4% 175.5%

145.1% 185.9% • Table 22: Health price change analysis

Group, Subgroup or Class Quarter Health Health

servicesHospital and

medical services Optical services Dental services

Jun-2008 253.7 276.3 295 156.8 235.3Mar-2008 247.8 267.4 284 156.8 231.6Jun-2007 242.7 261.8 279.3 153.5 222.8Mar-1990 101.3 100.3 100.2 100 100.7In last quarter 5.9 8.9 11 0 3.7Previous 12 months 11 14.5 15.7 3.3 12.5Since 1990 152.4 176 194.8 56.8 134.6In last quarter 2.4% 3.3% 3.9% 0.0% 1.6%Previous 12 months 4.5% 5.5% 5.6% 2.1% 5.6%Since 1990 56.8%In last quarter 1.2% 2.1% 2.7% -1.2% 0.4%Previous 12 months 0.1% 1.1% 1.2% -2.3% 1.2%Since 1990 89.1% 114.1% 133.0% -4.6% 72.3%In last quarter 101.3% 181.3% 227.4% -100.0% 35.0%Previous 12 months 2.2% 24.9% 26.8% -51.5% 26.5%Since 1990 -7.4%


Points increase

Percent increase



150.4% 175.5% 194.4% 133.7%

145.1% 185.9% 216.8% 117.8% • Table 23: Health Services price change analysis

Melbourne’s Health price index has increased at a rate 2.45 times greater than Melbourne’s overall inflation rate since 1990, i.e., at a rate 145% above it. Over the same period, the Health Services subgroup index has increased at 86% above Melbourne’s inflation rate, while the Pharmaceuticals subgroup has increased at 0.13% below it.

The Health price index has increased at a significantly greater rate than the CPI but it has only the tenth largest basket weight so, at a weight of 3.0%, it is not expected to have a particularly strong influence on long‐term cost trends for most households.

The price indexes of the classes of the Health Services subgroup have risen at significantly different rates: Hospital and medical services has risen at a rate 117% above Melbourne’s inflation rate, Optical services at 18% below it and Dental Services at 18% above.



Transport prices

Transportation group and subgroups


Transportation Melbourne , Jun-2008, 171.8

Private motoring Melbourne , Jun-2008,

167.9

Urban transport fares Melbourne , Jun-2008,

246.7

100

120

140

160

180

200

220

240

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Transportation group has two subgroups, Private Motoring, and Urban Transport Fares.

Comparison of price indexes

• Figure 19: Transport price change comparison

The Private motoring subgroup and classes


Private motoring Melbourne , Jun-2008,

167.9

Motor vehicles Melbourne , Jun-2008, 98.4

Automotive fuel Melbourne , Jun-2008, 258.7

Motor vehicle repair and servicing Melbourne , Jun-

2008, 155.2Motor vehicle parts and accessories Melbourne ,

Jun-2008, 133.6

Other motoring charges Melbourne , Jun-2008,

354.6

80

100

120

140

160

180

200

220

240

260

280

300

320

340

360

380

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Private motoring subgroup has five classes: Motor vehicles Automotive fuel Motor vehicle repair and servicing Motor vehicle parts and accessories Other motoring charges


• Figure 20: Private motoring price change comparison



Transport price change tables

Group, Subgroup or Class Quarter Transportation Private

motoringUrban transport

fares

Jun-2008 171.8 167.9 246.7Mar-2008 166.5 162.5 244.4Jun-2007 160.5 156.5 239.5Mar-1990 101.8 101.8 102.1In last quarter 5.3 5.4 2.3Previous 12 months 11.3 11.4 7.2Since 1990 70 66.1 144.6In last quarter 3.2% 3.3% 0.9%Previous 12 months 7.0% 7.3% 3.0%Since 1990 68.8% 64.9%In last quarter 2.0% 2.1% -0.2%Previous 12 months 2.6% 2.8% -1.4%Since 1990 7.4% 3.6% 80.3%In last quarter 169.1% 180.9% -20.5%Previous 12 months 58.8% 64.3% -32.2%Since 1990 12.0% 5.8%




Points increase

Percent increase141.6%

130.8% • Table 24: Transport price change analysis

Group, Subgroup or Class Quarter Private motoring Motor vehicles Automotive fuel

Motor vehicle repair and servicing

Motor vehicle parts and accessories

Other motoring charges

Jun-2008 167.9 98.4 258.7 155.2 133.6 354.6Mar-2008 162.5 98.5 240.4 150.9 134 351.2Jun-2007 156.5 99.4 219.9 148.5 126.8 338.5Mar-1990 101.8 100.6 104.2 101 101.1 101.3In last quarter 5.4 -0.1 18.3 4.3 -0.4 3.4Previous 12 months 11.4 -1 38.8 6.7 6.8 16.1Since 1990 66.1 -2.2 154.5 54.2 32.5 253.3In last quarter 3.3% -0.1% 7.6% 2.8% -0.3% 1.0%Previous 12 months 7.3% -1.0% 17.6% 4.5% 5.4% 4.8%Since 1990 64.9% -2.2% 53.7% 32.1%In last quarter 2.1% -1.3% 6.4% 1.7% -1.5% -0.2%Previous 12 months 2.8% -5.4% 13.2% 0.1% 0.9% 0.3%Since 1990 3.6% -63.6% 86.9% -7.7% -29.2% 188.7%In last quarter 180.9% -108.6% 543.4% 140.9% -125.2% -18.2%Previous 12 months 64.3% -122.7% 297.9% 1.7% 20.9% 7.3%Since 1990 5.8% -103.6% -12.6% -47.6%


Points increase

Percent increase



148.3% 250.0%

141.6% 307.4% • Table 25: Private motoring price change analysis

Melbourne’s Transportation price index has increased at a rate 1.12 times greater than Melbourne’s overall inflation rate since 1990, i.e., at a rate 12% above it. Its subgroups have different change rates: Private Motoring has risen at a rate of 6% above Melbourne’s inflation rate, while Urban Transport Fares have risen at 131% above it.

At 12.1%, Transportation has the fifth largest basket weight but its price index has increased at only a marginally higher rate than the long‐term CPI, so it is expected to have a fairly neutral influence on long‐term cost trends for most household types. However, the disparity between the increases in Private Motoring and Urban Transport Fares indexes suggests that this effect would not be universal: household groupings with a relatively high proportion of transport expenditure on Urban Transport Fares could experience a fairly strong upward cost pressure. Table 7 (page 12) shows that, for all households, the Urban Transport Fares weight of 0.7% is much smaller than the Private Motoring weight of 11.4%, but these weights reflect the proportions of households using public transport and private motoring, not just the average expenditure levels (see Table 9, page 13).



Communications prices

The Communications group and subgroups


Communication Melbourne , Jun-2008, 110.8

Postal Melbourne , Jun-2008, 143.4

Telecommunication Melbourne , Jun-2008,

108.4

80

100

120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

Communications has two subgroups: Postal Telecommunication.


• Figure 21: Communications price change comparison



Communications price change table

Group, Subgroup or Class Quarter Communication Postal Telecommunication

Jun-2008 110.8 143.4 108.4Mar-2008 110.7 143.4 108.3Jun-2007 110.7 142 108.4Mar-1990 100.3 101.1 100.2In last quarter 0.1 0 0.1Previous 12 months 0.1 1.4 0Since 1990 10.5 42.3 8.2In last quarter 0.1% 0.0% 0.1%Previous 12 months 0.1% 1.0% 0.0%Since 1990 10.5% 41.8% 8.2%In last quarter -1.1% -1.2% -1.1%Previous 12 months -4.3% -3.4% -4.4%Since 1990 -50.9% -19.5% -53.2%In last quarter -92.4% -100.0% -92.2%Previous 12 months -98.0% -77.8% -100.0%Since 1990 -82.9% -31.8% -86.7%

Percent increase




Points increase

• Table 26: Communication price change analysis

Melbourne’s Communications price index has increased at a rate 1.83 times lower than Melbourne’s overall inflation rate since 1990, i.e., at a rate 83% below it. Over the same period, the Postal subgroup index has increased at 32% below Melbourne’s inflation rate, while the Telecommunications subgroup has increased at 87% below it. The Communications price index has increased at a significantly lower rate than the CPI but with only the eight largest basket weight – 4.1% – it is not expected to have a particularly strong influence on long‐term cost trends for most households.



Recreation prices

The Recreation group and subgroups


Recreation Melbourne , Jun-2008, 135.4Audio, visual and

computing Melbourne , Jun-2008, 44.5

Books, newspapers and magazines Melbourne ,

Jun-2008, 223.8Sport and other recreation Melbourne , Jun-2008,

179.8

Holiday travel and accommodation

Melbourne , Jun-2008, 139.4

40

60

80

100

120

140

160

180

200

220

240

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Recreation group has four subgroups: Audio, visual and computing Books, newspapers and magazines Sport and other recreation Holiday travel and accommodation.


• Figure 22: Recreation price change comparison



Recreation price change table

Group, Subgroup or Class Quarter Recreation Audio, visual

and computingBooks, newspapers and magazines

Sport and other recreation

Holiday travel and accommodation

Jun-2008 135.4 44.5 223.8 179.8 139.4Mar-2008 136.5 44.8 223.4 180.1 141.8Jun-2007 132.8 46.8 218.8 173.3 133.3Mar-1990 101 99.6 101.2 102 101.3In last quarter -1.1 -0.3 0.4 -0.3 -2.4Previous 12 months 2.6 -2.3 5 6.5 6.1Since 1990 34.4 -55.1 122.6 77.8 38.1In last quarter -0.8% -0.7% 0.2% -0.2% -1.7%Previous 12 months 2.0% -4.9% 2.3% 3.8% 4.6%Since 1990 34.1% -55.3% 76.3% 37.6%In last quarter -2.0% -1.9% -1.0% -1.3% -2.9%Previous 12 months -2.5% -9.3% -2.1% -0.7% 0.1%Since 1990 -27.3% -116.7% 59.8% 14.9% -23.8%In last quarter -168.1% -156.6% -84.9% -114.1% -243.1%Previous 12 months -55.8% -210.8% -48.5% -15.4% 3.2%Since 1990 -44.5% -190.1% 24.3% -38.7%

Points increase

Percent increase




121.1%

97.4% • Table 27: Recreation price change analysis

Melbourne’s Recreation price index has increased at a rate 1.45 times lower than Melbourne’s overall inflation rate since 1990, i.e., at a rate 45% below it.

Over the same period, its subgroup rates vary widely: Audio, Visual and Computing at 190% below; Holiday Travel and Accommodation at 39% below; Books, Newspapers and Magazines at 97% above; and, Sport and Other Recreation at 24% above Melbourne’s long‐term inflation rate.

The Recreation price index has increased at a significantly lower rate than the CPI and with the fourth largest basket weight – 12.2% – it is expected to have a fairly strong downward influence on long‐term cost trends, at least when it is averaged over all households.



Education prices

The Education group/subgroup and classes


Education Melbourne , Jun-2008, 265.3

Preschool and primary education Melbourne ,

Jun-2008, 157.9

Secondary education Melbourne , Jun-2008,

161.4

Jun-2000

Tertiary education Melbourne , Jun-2008,

131.0

80

100

120

140

160

180

200

220

240

260

280

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Education group/subgroup has three classes: Preschool and primary education Secondary education Tertiary education.


• Figure 23: Education price change comparison



Education price change table

Group, Subgroup or Class Quarter Education

Preschool and primary

education

Secondary education

Tertiary education

Jun-2008 265.3 157.9 161.4 131Mar-2008 265.2 157.7 161.4 131Jun-2007 255.8 156.6 152.4 126.9Mar-1990 107.4 #N/A #N/A #N/AIn last quarter 0.1 0.2 0 0Previous 12 months 9.5 1.3 9 4.1Since 1990 157.9 #N/A #N/A #N/AIn last quarter 0.0% 0.1% 0.0% 0.0%Previous 12 months 3.7% 0.8% 5.9% 3.2%Since 1990 #N/A #N/A #N/AIn last quarter -1.1% -1.1% -1.2% -1.2%Previous 12 months -0.7% -3.6% 1.5% -1.2%Since 1990 85.7% #N/A #N/A #N/AIn last quarter -96.8% -89.3% -100.0% -100.0%Previous 12 months -16.3% -81.3% 33.2% -27.1%Since 1990 #N/A #N/A #N/A


Points increase

Percent increase



147.0%

139.6% • Table 28: Education price change analysis

Melbourne’s Education price index has increased at a rate 2.40 times greater than Melbourne’s overall inflation rate since 1990, i.e., at a rate 145% above it.

The price change rates are not applicable to its subgroups over the same period because the subgroups were not introduced until June 2000.

The Education price index has increased at a much higher rate than the CPI but with the smallest of the basket weights, at 1.5%, it is not expected to have a strong influence on long‐term cost trends for the majority of households.



Financial and Insurance Services prices

Financial and Insurance Services group, subgroups and classes


Jun-2005

Financial and insurance services Melbourne , Jun-

2008, 115.1

Financial Services Melbourne , Jun-2008,

114.1

Deposit and Loan Facilities Melbourne , Jun-

2008, 117.5

Other Financial Services Melbourne , Jun-2008,

109.6

Insurance services Melbourne , Jun-2008,

256.6

80

100

120

140

160

180

200

220

240

260

280

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

The Financial and insurance services group has two subgroups: Financial services, and Insurance services.


The Financial services subgroup is made up of two classes: Deposit and Loan Facilities, and Other Financial Services.

• Figure 24: Financial and Insurance Services price change comparison

The long‐term price change rate is not applicable to Melbourne’s Financial and Insurance Services because it did not exist as a whole group until June 2005. Nonetheless, it increased at a rate 2.29 times greater than Melbourne’s inflation rate over the last 12 months, or at 129% above it.

The long‐term price change rate is not applicable to the Financial Services subgroup because it was not introduced until June 2005. The Insurance Services price index rose at 152% above Melbourne’s inflation rate over the period since 1990.

The Financial and Insurance Services price index is currently increasing at a much higher rate than the CPI and it has the third largest basket weight, at 12.8%, so it is expected to have a strong influence in the immediate term cost trends for the majority of households, although its long‐term influence is unclear.



Financial and Insurance Services price change table


Financial and insurance services

Financial Services

Deposit and Loan Facilities

Other Financial Services

Insurance services

Jun-2008 115.1 114.1 117.5 109.6 256.6Mar-2008 111.7 110.7 107.3 115.2 249.6Jun-2007 104.5 103.4 101 106.5 236Mar-1990 #N/A #N/A #N/A #N/A 100.7In last quarter 3.4 3.4 10.2 -5.6 7Previous 12 months 10.6 10.7 16.5 3.1 20.6Since 1990 #N/A #N/A #N/A #N/A 155.9In last quarter 3.0% 3.1% 9.5% -4.9% 2.8%Previous 12 months 10.1% 10.3% 16.3% 2.9% 8.7%Since 1990 #N/A #N/A #N/A #N/AIn last quarter 1.9% 1.9% 8.3% -6.0% 1.6%Previous 12 months 5.7% 5.9% 11.9% -1.5% 4.3%Since 1990 #N/A #N/A #N/A #N/A 93.4%In last quarter 157.3% 159.6% 703.5% -510.9% 137.1%Previous 12 months 128.7% 133.4% 268.4% -34.4% 96.8%Since 1990 #N/A #N/A #N/A #N/A



Points increase

Percent increase


154.8%

152.3% • Table 29: Financial and insurance services price change analysis

Summary

Food is expected to have a strong upward influence on long‐term cost trends for most household types.

Housing is expected to have a strong downward influence on long‐term cost trends for most household types. However, the disparity between the Rent and House Ownership index rates suggests that this effect would not be universal: household groupings with a relatively high proportion of housing expenditure on rent would not experience such a strong downward effect.

The Household Contents and Services group is expected to exert some significant downward pressure on long‐term cost trends, for most households.

Transportation as a whole is expected to have a fairly neutral influence on long‐term cost trends for most household types. However, the disparity between the increases in Private Motoring and Urban Transport Fares indexes suggests that this effect would not be universal: household groupings with a relatively high proportion of transport expenditure on Urban Transport Fares could experience a fairly strong upward cost pressure.

Recreation is expected to have a fairly strong downward influence on long‐term cost trends, at least when it is averaged over all households.


Relative Price Indexes Development of the Relative Price Index


The Household Expenditure Survey

Background

Like the CPI groupings, the Household Expenditure Survey (HES) categories are comprised of groups, subgroups and individual items (see Methodology, Household Expenditure Survey, page 5). The HES details expenditure patterns which reflect the “net or out of pocket expenditure” of the sample groups. These expenditure details account for the value of any concessions or entitlements available to government pension and benefit recipients, i.e., the expenditure is effectively measured after any concession or discount. Because expenditure measures can include components which are at concession prices rather than full prices, some of the weight constants and points contributions are relatively lower than they would otherwise be. Looked at another way, imputed cost levels already include expenditure at concession rates.

HES and CPI

The HES details the expenditure, income and characteristics of households in private dwellings throughout Australia. This data enables the development of accurate weighting of the CPI group price indexes for specific household using their unique expenditure patterns, unlike the CPI which develops its weightings based on all metropolitan private households in aggregate (see Survey populations, page 8, and RPI calculation methods, page 10, in the Methodology chapter).

The consistency between HES and CPI categories allows the CPI data to be weighted to reflect various household expenditure patterns, thus producing Relative Pricing Indices for various household types.

Household types selected for RPIs

By analysing the HES data on households where the principal source of income was from government pensions and allowances, according to the methods outlined earlier, it was possible to calculate RPIs for households grouped by the following statutory incomes:

1) Aged and Disability Support Pensions

2) Unemployment, Education and Sickness Allowances

3) Other Government Pensions and Allowances

The Other Government Pensions and Allowances group is predominantly represented by Sole Parent Beneficiaries. RPIs were also calculated for five of the seven possible household family composition types, as follows:

4) Single parent with two or more children

5) Single parent with one child

6) Couple with three or more children

The Household Expenditure Survey Melbourne, September 2008 42


7) Couple with one child

8) Lone person

9) Couple only

One household group, “Couple with two children”, has been omitted at this stage because it is middle‐of‐the‐range in terms of family compositions already represented and the RPI for “Couple with three or more children” probably serves as a better correlate for the larger one‐parent family households. RPIs have also been calculated for the two other non‐beneficiary sources of income for which it was possible, in a similar fashion:

10) Wage and Salary

11) Superannuation or other private income

The HES household group selection is restricted by the availability of compatible data between the 1998‐99 and 2003‐04 HES (14th and 15th CPI Series, respectively) and earlier HES‐based data. The results of the group matching are given in Table 30, showing the 2003‐04 groups with matching categories in earlier periods, “N/A” where there is no match, “N/A?” for a doubtful match and “All Households” or “‐” for the grouping as a whole. More detail is given in Table 118, page 100, Appendices.

Number Number per grouping Type of Household Grouping Household Group (2003-04 names)

1 1 Composition of household Couple only2 2 Composition of household Couple with one dependent child only3 3 Composition of household Couple with two dependent children only4 4 Composition of household Couple with three or more dependent children only5 5 Composition of household Lone person household

6 6 Composition of household One parent, one family households with one dependent child only

7 7 Composition of household One parent, one family households with two/(or more) dependent child only

n/a n/a Composition of household N/An/a n/a Composition of household N/A? (All?) other household types - - Composition of household All households8 1 Government pensions and allowances Age/disability pension9 2 Government pensions and allowances Unemployment, education and sickness allowances

10 3 Government pensions and allowances Other government pensions and allowancesn/a n/a Government pensions and allowances N/An/a n/a Government pensions and allowances N/An/a n/a Government pensions and allowances N/A - - Government pensions and allowances All households

11 1 Income source of household Wage and salary12 2 Income source of household N/A? Own unincorporated business income13 3 Income source of household Other incomen/a n/a Income source of household N/An/a n/a Income source of household N/An/a n/a Income source of household N/A - - Income source of household All households

Household Group Selection

• Table 30: Summary of household group selection

Household groups by Housing and Transport consumption

In addition to the weightings for household types, outlined above, the RPI calculates weightings for households which consume rental housing only and urban transportation only, to explore the cost

HES and CPI Melbourne, September 2008 43


pressures on households that are reliant on the rental housing market and public transport. This is intended to explore the effect of access to alternate housing and transport options on the cost of living.

The proportions of households in the alternate Housing and Transport subgroups are important in considering the effects of the RPI methods for exploring housing and transport options, as outlined in “Methodology", "Specific consumption patterns”, page 11.

Housing

By Family Composition, the highest percentage of Rental households is amongst the three “one parent” household groups, each between 60% and 63%, approximately. The lowest is the Couple Only household group at approximately 16%, followed by the other “couple‐with‐children” household groups between 17% and 22%, approximately (see Table 31 below).

By Source of Income, the highest percentage of Rental households is for the Government Pensions and Allowances household group, at approximately 37%. The lowest is the Other Income household group at approximately 11%, followed by the Own Unincorporated Business Income household group at approximately 18% (see Table 32, below).

Family compositionOwner-occupier,

percentage of Housing

Rental, percentage of Housing

Total, excluding Utilities

Ratio, Owner-occupier to Rental

Couple only 84.3% 15.7% 100.0% 5.38Couple with one dependent child only 77.8% 22.2% 100.0% 3.50Couple with two dependent children only 83.5% 16.5% 100.0% 5.06Couple with three or more dependent children only 80.7% 19.3% 100.0% 4.17

Lone person household 62.6% 37.4% 100.0% 1.67One parent, one family households with one dependent child only

37.4% 62.6% 100.0% 0.60

One parent, one family households with two dependent child only 40.1% 59.9% 100.0% 0.67

One parent, one family households with three or more dependent children only 37.2% 62.8% 100.0% 0.59

Other 70.8% 29.2% 100.0% 2.43All households (percentage) 73.0% 27.0% 100.0% 2.71

Housing subgroups: approximate proportions of Households by household family composition

• Table 31: Proportions of Households in Housing subgroups by Family Composition

Principal source of household incomeOwner-occupier,

percentage of Housing

Rental, percentage of

HousingTotal Ratio, Owner-

occupier to Rental

Household has zero or negative income 76.7% 23.3% 100.0% 3.29Wage and salary 74.3% 25.7% 100.0% 2.89Own unincorporated business income 82.2% 17.8% 100.0% 4.62Government pensions and allowances 63.0% 37.0% 100.0% 1.70Other income 89.1% 10.9% 100.0% 8.20All households 73.0% 27.0% 100.0% 2.71

Housing subgroups (excl Utilities): approximate proportions of households by source of income

• Table 32: Proportions of Households in Housing subgroups by Source of Income

HES and CPI Melbourne, September 2008 44


Transport

By Family Composition, the highest percentage of households using Urban Transport Fares only is the Lone Person household group at approximately 21%, followed by the smaller of the “one parent” household groups: those with one dependent child at approximately 17% and with two dependent children at 18%. The lowest percentage is the Couple Only household group at approximately 17%, followed by the other “couple‐with‐children” household groups at between 17% and 22%, approximately (see Table 33 below).

By Source of Income, the Government Pensions and Allowances household group has the highest percentage of households using Urban Transport Fares at approximately 17%. The lowest is for the Wage and Salary household group at approximately 7%, followed by Own Unincorporated Business Income households at approximately 8% (see Table 34, below).

Household family compositionPrivate Motoring, some with Urban Transport Fares




MotoringCouple only 94.8% 5.2% 100.0% 18.16 14.7%Couple with one dependent child only 96.5% 3.5% 100.0% 27.24 22.7%Couple with two dependent children only 94.7% 5.3% 100.0% 17.75 18.9%Couple with three or more dependent children only 95.0% 5.0% 100.0% 19.05 20.4%

Lone person household 79.1% 20.9% 100.0% 3.79 2.6%One parent, one family households with one dependent child only 83.2% 16.8% 100.0% 4.97 13.3%

One parent, one family households with two dependent child only 82.3% 17.7% 100.0% 4.64 3.2%

One parent, one family households with three or more dependent children only 90.6% 9.4% 100.0% 9.63 14.1%

Other 92.6% 7.4% 100.0% 12.46 28.4%All household types (percentage) 90.3% 9.7% 100.0% 9.31 15.5%

Transportation subgroups: approximate proportions of Households by family composition

• Table 33: Proportions of Households in Transportation subgroups by Family Composition

Principal source of household incomePrivate Motoring, some with Urban Transport Fares




MotoringHousehold has zero or negative income 89.3% 10.7% 100.0% 8.33 -7.1%Wage and salary 93.1% 6.9% 100.0% 13.59 20.5%Own unincorporated business income 91.8% 8.2% 100.0% 11.14 9.4%Government pensions and allowances 83.3% 16.7% 100.0% 4.99 5.7%Other income 89.6% 10.4% 100.0% 8.64 14.5%All households 90.3% 9.7% 100.0% 9.31 15.5%

Transportation subgroups: approximate proportions of households by source of income

• Table 34: Proportions of Households in Transportation subgroups by Source of Income

Long-term RPI data

The comparison of the various relative price indexes with the CPI seeks to document changes in cost of living of various households, particularly those consuming various housing and transport options over the last 18 years.

Long-term RPI data Melbourne, September 2008 45

Relative Price Indexes All household groups, Australia

RPI baseline

The RPI baseline is the result of calculations for the specific household groups defined above, without modification of the Housing and Transport subgroup weights for alternate consumption patterns.

Upper Limit

Each RPI “Upper Limit” is the RPI baseline for the respective household type with the whole of the respective Housing weight constant (excluding Utilities) applied to the Rental price index and the whole of the respective Transportation weight constant applied to the Urban Transport Fares price index. This is labelled “All expenditures on Rental and Transport Fares, combined, RPI”.

Lower Limit

Each RPI “Lower Limit” is the RPI baseline for the respective household type with the whole of the respective Housing weight constant (excluding Utilities) applied to the House Ownership price index and the whole of the respective Transportation weight constant applied to the Private Motoring price index. This is labelled “All expenditures on House Ownership and Private Motoring combined, RPI”.

All household groups, Australia

The All Households baseline RPI for Australia tracks the CPI closely from 1990, and at June 2008 the RPI baseline is 164.6 and the CPI is 164.6, as shown in Figure 25. This also shows that the RPI Upper Limit runs consistently above the CPI by a large margin.

Selected data for the RPI limits and the CPI are shown in Table 35: the index values for June 2008, the previous quarter, 12 months ago and 1990; the increases since 1990, over the last 12 months and over the last quarter; and the differences between the changes in the RPI and CPI over the same periods.

RPI for ''All households'' Australia, compared to CPI

RPI baseline for All households, Australia (? CPI), Jun-2008, 164.6


RPI, All Housing expenditure (excl Utilities) on Rental, All households, Australia, Jun-2008, 169.3

RPI, All expenditures on House Ownership and

Private Motoring combined, All households, Australia,

Jun-2008, 162.4

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun-2008, 177.0

RPI, All Housing expenditure (excl Utilities) on House Ownership, All

households, Australia, Jun-2008, 162.8

RPI, All Transportation expenditure on Private

Motoring, All households, Australia, Jun-2008, 164.2

RPI, All Transportation expenditure on Transport

Fares, All households, Australia, Jun-2008, 172.4

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts

12th Series starts100

120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport

Average weekly household expenditure on Transportation = $109.66 (June 2005)

Average weekly household expenditure on Housing = $192.65 (June 2005)

• Figure 25: RPI, All Household types, Australia




RPI – CPI comparison tables

For all household types, the RPI Upper Limit has increased at a rate 19.9% greater than the CPI, since 1990. This is notable for the large margin and that it is not related to any particular type of household.

RPI Upper and Lower Limits / CPI

Quarter RPI Upper Limit, All households

RPI Lower Limit, All households

All Groups (? CPI)

Australia

CPI, Australia

Jun-2008 177.0 162.4 164.6 164.6Mar-2008 174.9 160.1 162.2 162.2Jun-2007 169.1 155.7 157.5 157.5Mar-1990 100.7 101.0 100.9 100.9In last quarter 2.1 2.2 2.4 2.4Previous 12 months 7.9 6.7 7.1 7.1Since 1990 76.3 61.3 63.7 63.7In last quarter 1.2% 1.4% 1.5% 1.5%

4.7% 4.3% 4.5% 4.5%75.7%

Previous 12 monthsSince 1990 60.7% 63.1% 63.1%In last quarter -0.3% -0.1% 0.0% 0.0%Previous 12 months 0.1% -0.2% 0.0% 0.0%Since 1990 12.6% -2.4% 0.0% 0.0%In last quarter -17.7% -5.2% 0.0% 0.0%Previous 12 months 3.2% -4.3% 0.0% 0.0%Since 1990 19.9% -3.9% 0.0% 0.0%In last quarter -0.3% -0.1% 0.0% 0.0%Previous 12 months 0.1% -0.2% 0.0% 0.0%Since 1990 12.6% -2.4% 0.0% 0.0%In last quarter -17.7% -5.2% 0.0% 0.0%Previous 12 months 3.2% -4.3% 0.0% 0.0%Since 1990 19.9% -3.9% 0.0% 0.0%

Difference from CPI Australia percent increase

Percent greater than CPI Australia increase

Price Index, All CPI Groups

Points increase

Percent increase


RPI Upper and Lower Limits compared to the CPI

Percent greater than CPI Australia increase • Table 35: RPI – CPI comparison – All Household types, Australia

The equivalent RPI Upper Limit data is shown in Table 36 but with the contributions of Urban Transport Fares and Rental added separately to the RPI baseline.

RPI Upper Limit components / CPI

Quarter RPI with Urban Transport Fares only, All households

RPI with Rental component only, All households

All Groups (? CPI)

Australia

CPI, Australia


4.2% 4.9% 4.5% 4.5%

9.9%

9.9%

Previous 12 monthsSince 1990 70.9% 67.8% 63.1% 63.1%In last quarter -0.4% 0.1% 0.0% 0.0%Previous 12 months -0.3% 0.4% 0.0% 0.0%Since 1990 7.7% 4.7% 0.0% 0.0%In last quarter -29.8% 0.0% 0.0%Previous 12 months -5.9% 8.7% 0.0% 0.0%Since 1990 12.3% 7.5% 0.0% 0.0%In last quarter -0.4% 0.1% 0.0% 0.0%Previous 12 months -0.3% 0.4% 0.0% 0.0%Since 1990 7.7% 4.7% 0.0% 0.0%In last quarter -29.8% 0.0% 0.0%Previous 12 months -5.9% 8.7% 0.0% 0.0%Since 1990 12.3% 7.5% 0.0% 0.0%

RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI


Points increase

Percent increase



Difference from CPI Australia percent increasePercent greater than CPI Australia increase

• Table 36: RPI – CPI Upper Limit component comparison – All Household types, Australia



These have increased at 12.3% and 7.5% above the CPI increase since 1990, respectively. That is, the Transportation subgroup, Urban Transport Fares, contributes substantially more to the upper limit values than Rental. The equivalent RPI Lower Limit data is shown in Table 37 but with the contributions of Private Motoring and House Ownership shown separately. The lower limit has increased at 3.9% below the CPI increase over the same period.

RPI Lower Limit components / CPI

QuarterRPI with Private Motoring

component only, All households

RPI with House Ownership component only, All

households

All Groups (? CPI)

Australia

CPI, Australia


4.5% 4.3% 4.5% 4.5%Previous 12 monthsSince 1990 62.5% 61.2% 63.1% 63.1%In last quarter 0.0% -0.1% 0.0% 0.0%Previous 12 months 0.0% -0.2% 0.0% 0.0%Since 1990 -0.6% -2.0% 0.0% 0.0%In last quarter -0.3% -6.9% 0.0% 0.0%Previous 12 months -0.5% -4.6% 0.0% 0.0%Since 1990 -0.9% -3.1% 0.0% 0.0%In last quarter 0.0% -0.1% 0.0% 0.0%Previous 12 months 0.0% -0.2% 0.0% 0.0%Since 1990 -0.6% -2.0% 0.0% 0.0%In last quarter -0.3% -6.9% 0.0% 0.0%Previous 12 months -0.5% -4.6% 0.0% 0.0%Since 1990 -0.9% -3.1% 0.0% 0.0%

RPI Lower Limit components (Private Motoring and House Ownership) compared to the CPI

Points increase



Percent increase


• Table 37: RPI – CPI Lower Limit component comparison – All Household types, Australia

Expenditure comparison tables

The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 38 shows that the total AWHE for All Households was $910.63 at June 2005.

Expenditure Group All households All households Difference Percent difference

1 Food 123.05$ 123.05$ -$ 0.0%2 Alcohol and Tobacco 37.07$ 37.07$ -$ 0.0%3 Clothing and Footwear 44.19$ 44.19$ -$ 0.0%4 Housing 192.65$ 192.65$ -$ 0.0%5 Household Furnishings, Supplies and Services 98.71$ 98.71$ -$ 0.0%6 Health 27.67$ 27.67$ -$ 0.0%7 Transportation 109.66$ 109.66$ -$ 0.0%8 Communication 37.32$ 37.32$ -$ 0.0%9 Recreation 110.59$ 110.59$ -$ 0.0%10 Education 13.85$ 13.85$ -$ 0.0%11 Financial and Insurance Services 115.86$ 115.86$ -$ 0.0%

Total 910.63$ 910.63$ -$ 0.0%

Average weekly household expenditure: comparison of ''All households'' and ''All Households'' Australia (June 2005)

• Table 38: Households expenditure comparison – All Household types, Australia


Table 39 shows that expenditures in the Housing group average at $109.66 on Other Housing (i.e., house ownership), $51.01 on Rental, and $30.31 on utilities per household per week across all households.

Expenditure Subgroup All households All households Difference Percent difference

4.1 Rents 47.12$ 47.12$ -$ 0.0%4.2 Utilities 25.63$ 25.63$ -$ 0.0%4.3 Other Housing 119.90$ 119.90$ -$ 0.0%

Total 192.65$ 192.65$ -$ 0.0%7.1 Private motoring 103.63$ 103.63$ -$ 0.0%7.2 Urban transport fares 6.09$ 6.09$ -$ 0.0%

Total 109.72$ 109.72$ -$ 0.0%

Average weekly household expenditure: comparison of ''All households'' and ''All Households'' Australia (June 2005)

• Table 39: Households expenditure comparison, subgroups – All Household types, Australia

Table 40 compares the expenditures on Other Housing with Rental, showing a 2.1 times greater expenditure on Other Housing, and Private Motoring with Urban Transport Fares, showing a 17.0 times greater expenditure on Private Motoring, averaged across all households.

Expenditure Subgroup All households All households

Percent of Total, All

households

Ratio, All households

4.3 Other Housing 119.90$ 119.90$ 71.8%4.1 Rents 47.12$ 47.12$ 28.2%

Total 167.02$ 167.02$ 100.0%7.1 Private motoring 103.63$ 103.63$ 94.5%7.2 Urban transport fares 6.09$ 6.09$ 5.5%

Total 109.72$ 109.72$ 100.0%

2.54

17.02

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, All households, Australia (June 2005)

• Table 40: Subgroups expenditure comparison – All Household types, Australia

Note: the “All Households” columns appear twice in these tables as a proof. In the equivalent tables for specific household types, the second “All Households” column is the data for a specific household type.

Summary

For all household types, the RPI Upper Limit has increased at a rate 19.9% greater than the CPI, since 1990. This is notable for the large margin and that it is not related to any particular type of household. The lower limit has increased at 3.9% below the CPI increase over the same period.

The RPI Upper Limit has increased at 2.4% above the CPI increase in the previous 12 months, and at 18.7% below the CPI increase in the last quarter.

The key components of the RPI Upper Limit, Urban Transport Fares and Rental, have increased at 12.3% and 7.5% above the CPI increase since 1990, respectively. That is, the Transportation subgroup, Urban Transport Fares, contributes substantially more to the upper limit values than Rental. Conversely, the Housing subgroup, House Ownership, contributes more to the difference between the RPI Lower Limit and CPI.


Relative Price Indexes Government Pensions and benefits

Government Pensions and benefits

Aged and Disability Support Pensioners

RPI Aged and Disability Support Pensions

The Aged and Disability Support Pensioners baseline RPI for Melbourne runs marginally above or below the CPI since 1990, the difference varying more‐or‐less in line with changes in the CPI series. The RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and the lower limit runs below the CPI by a significant margin since the introduction of the 14th series in June 2000.

RPI for ''Age and disability support pensions'' Melbourne, compared to CPI

RPI baseline for Age/disability pension, Melbourne, Jun-2008,

164.1


RPI, All expenditures on House Ownership and Private Motoring

combined, Age/disability pension, Melbourne, Jun-2008,

160.5

RPI, All expenditures on Rental and Transport Fares combined,

Age/disability pension, Melbourne, Jun-2008, 179.4

RPI, All expenditures on Rental and Transport Fares, combined, All households, Australia, Jun-

2008, 176.2

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 26: RPI Age and disability support pensions

Selected data for the RPI limits and the CPI are shown in Table 41: the index values for June 2008, the previous quarter, 12 months ago and 1990; the increases for the period since 1990, the last 12 months and the last quarter; and, the differences between the changes in the RPI and CPI over the same periods.

Aged and Disability Support Pensioners Melbourne, September 2008 50




For Aged and Disability Support Pensioners, the RPI Upper Limit has increased at a rate 27.4% greater than the CPI, and 31.0% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Age/disability pension

RPI Lower Limit, Age/disability pension

All Groups (? CPI)

Melbourne

CPI, Australia


4.3% 4.4% 4.5%80.4%

25.1%

31.0%

27.4%

Previous 12 months 4.0%Since 1990 61.4% 61.4% 63.1%In last quarter -0.1% -0.1% 0.0% 0.3%Previous 12 months -0.5% -0.1% 0.0% 0.1%Since 1990 19.1% 0.1% 0.0% 1.8%In last quarter -11.2% -5.3% 0.0%Previous 12 months -10.4% -3.2% 0.0% 1.7%Since 1990 0.1% 0.0% 2.9%In last quarter -0.4% -0.4% -0.3% 0.0%Previous 12 months -0.5% -0.2% -0.1% 0.0%Since 1990 17.3% -1.7% -1.8% 0.0%In last quarter -29.0% -24.3% -20.0% 0.0%Previous 12 months -11.9% -4.8% -1.6% 0.0%Since 1990 -2.7% -2.8% 0.0%






Points increase

Percent increase


• Table 41: RPI – CPI comparison – Age and disability support pensions


QuarterRPI with Urban Transport Fares only, Age/disability

pension

RPI with Rental component only, Age/disability pension

All Groups (? CPI)

Melbourne

CPI, Australia


4.6% 4.4% 4.5%

13.8% 25.1%

Previous 12 months 3.8%Since 1990 74.9% 70.6% 61.4% 63.1%In last quarter -0.3% 0.2% 0.0% 0.3%Previous 12 months -0.6% 0.1% 0.0% 0.1%Since 1990 13.5% 9.2% 0.0% 1.8%In last quarter -24.0% 0.0%Previous 12 months -14.6% 2.6% 0.0% 1.7%Since 1990 22.0% 15.0% 0.0% 2.9%In last quarter -0.6% -0.1% -0.3% 0.0%Previous 12 months -0.7% 0.0% -0.1% 0.0%Since 1990 11.7% 7.4% -1.8% 0.0%In last quarter -39.2% -9.0% -20.0% 0.0%Previous 12 months -16.0% 1.0% -1.6% 0.0%Since 1990 18.6% 11.8% -2.8% 0.0%



Difference from CPI Melbourne percent increasePercent greater than CPI Melbourne increase



Points increase

Percent increase

• Table 42: RPI – CPI component comparison – Age and disability support pensions


Weighting comparison tables

The difference between the 15th series basket weight constants for the Age and Disability Support Pensions households and All Households is shown for Melbourne in Table 43. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

Points contribution

Expenditure Group All households Age/disability pension Difference

Variance (percent

difference)

Difference from All

Households at Jun-2008

1 Food 13.4% 16.5% 3.2% 23.8% 6.32 Alcohol and Tobacco 4.0% 4.0% 0.0% -1.0% -0.13 Clothing and Footwear 4.7% 4.1% -0.6% -12.0% -0.74 Housing 22.9% 23.0% 0.1% 0.2% 0.15 Household Furnishings, Supplies and Services 10.6% 11.4% 0.8% 7.6% 1.16 Health 2.8% 3.7% 0.9% 31.5% 2.57 Transportation 11.8% 10.6% -1.2% -10.2% -2.38 Communication 4.0% 4.7% 0.7% 16.8% 0.89 Recreation 11.8% 9.9% -1.9% -16.1% -2.910 Education 1.6% 0.1% -1.5% -94.4% -4.311 Financial and Insurance Services 12.4% 12.0% -0.4% -3.3% -0.5

Total 100.0% 100.0% 0.0% n/a 0.0

Variance in weights: ''Age and disability support pensions'' from ''All Households'' Melbourne (June 2005)

• Table 43: Weights variance – Age and disability support pensions

The differences between the points contributions for Age and Disability Support Pensions households and All Households Melbourne, both at June 2008, are shown in the last column. The total of this column, 0.0 points, is equivalent to the difference between the RPI baselines of 164.1 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

The significant positive differences of 6.3 points for Food and 2.5 for Health indicate areas of particular interest for the household group as a whole. Across the household group, these pressures are virtually negated by Education, Recreation and Transportation with differences of ‐4.3, ‐2.9 and ‐2.3 respectively. This variation in points contributions requires careful consideration and the assumption that, in terms of cost pressures, negative differences necessarily negate positive ones could be questioned.

The equivalent data set for the Housing and Transportation subgroups is shown in Table 44 .

Points contribution

Expenditure Subgroup All households Age/disability pension Difference

Variance (percent

difference)

Difference from

RPI Aus (≈CPI)at Jun-2008

4.1 Rents 5.3% 6.7% 1.4% 26.3% 1.74.2 Utilities 2.8% 4.4% 1.6% 58.7% 2.64.3 Other Housing 14.8% 11.8% -3.0% -20.4% -2.0

Total 22.9% 22.9% 0.0% 0.0% 2.37.1 Private motoring 11.2% 11.3% 0.1% 0.9% 0.27.2 Urban transport fares 0.7% 0.6% -0.1% -14.6% -0.1

Total 11.8% 11.8% 0.0% n/a 0.1

Variance in weights: ''Age and disability support pensions'' from ''All Households'' Melbourne (June 2005)

• Table 44: Weights variance, subgroups – Age and disability support pensions




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 47 show a significantly lower ratio of average expenditures for Other Housing to Rental, and higher ratio for Private Motoring to Urban Transport Fares, compared to All Households Australia (see also Table 40, page 49).

Expenditure Group All households Age/disability pension Difference Percent difference

1 Food 123.05$ 66.42$ 56.63-$ -46.0%2 Alcohol and Tobacco 37.07$ 16.01$ 21.06-$ -56.8%3 Clothing and Footwear 44.19$ 16.96$ 27.23-$ -61.6%4 Housing 192.65$ 84.20$ 108.45-$ -56.3%5 Household Furnishings, Supplies and Services 98.71$ 46.31$ 52.40-$ -53.1%6 Health 27.67$ 15.87$ 11.80-$ -42.6%7 Transportation 109.66$ 42.93$ 66.73-$ -60.8%8 Communication 37.32$ 19.01$ 18.31-$ -49.1%9 Recreation 110.59$ 40.48$ 70.11-$ -63.4%10 Education 13.85$ 0.34$ 13.52-$ -97.6%11 Financial and Insurance Services 115.86$ 48.86$ 67.00-$ -57.8%

Total 910.63$ 397.39$ 513.24-$ -56.4%

Average weekly household expenditure: comparison of ''Age and disability support pensions'' and ''All Households'' Australia (June 2005)

• Table 45: Expenditure – Age and disability support pensions

Expenditure Subgroup All households Age/disability pension Difference Percent difference

4.1 Rents 47.12$ 25.58$ 21.54-$ -45.7%4.2 Utilities 25.63$ 17.49$ 8.14-$ -31.8%4.3 Other Housing 119.90$ 41.06$ 78.84-$ -65.8%

Total 192.65$ 84.13$ 108.52-$ -56.3%7.1 Private motoring 103.63$ 40.87$ 62.76-$ -60.6%7.2 Urban transport fares 6.09$ 2.03$ 4.06-$ -66.6%

Total 109.72$ 42.90$ 66.82-$ -60.9%

Average weekly household expenditure: comparison of ''Age and disability support pensions'' and ''All Households'' Australia (June 2005)

• Table 46: Expenditure, subgroups – Age and disability support pensions

Expenditure Subgroup All households Age/disability pension

Percent of Total,

Age/disability pension

Ratio, Age/disability

pension



Total 107.89$ 42.18$ 100.0%

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Age/disability pension, Australia (June 2005)

1.36

20.10

• Table 47: Subgroups expenditure comparison – Age and disability support pensions



Unemployment, education and sickness allowances

RPI Unemployment, education and sickness allowances

The Unemployment, Education and Sickness Allowances RPI baseline for Melbourne runs marginally above or below the CPI since 1990, the difference varying more‐or‐less in line with changes in the CPI series. The RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and the lower limit runs below the CPI by a significant margin since the introduction of the 14th series in June 2000. The Unemployment, Education and Sickness Allowances RPIs run noticeably lower during the 14 Series CPI.

RPI for ''Unemployment, education and sickness allowances'' Melbourne, compared to CPI

RPI baseline for Unemployment/ sickness/

education allowance, Melbourne, Jun-2008, 163.4



combined, Unemployment/ sickness/ education allowance,

Melbourne, Jun-2008, 157.7


Unemployment/ sickness/ education allowance,


RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun-

2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 27: RPI Unemployment, education and sickness allowances


Unemployment, education and sickness allowances Melbourne, September 2008 54




For Unemployment, Education and Sickness Allowances, the RPI Upper Limit has increased at a rate 22.6% greater than the CPI, and 26.2% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


QuarterRPI Upper Limit,

Unemployment/ sickness/ education allowance

RPI Lower Limit, Unemployment/ sickness/

education allowance

All Groups (~ CPI)

Melbourne

CPI, Australia


4.1% 4.4% 4.4% 4.5%77.4%

25.1%

26.2%

Previous 12 monthsSince 1990 58.2% 61.4% 63.1%In last quarter -0.2% -0.2% 0.0% 0.3%Previous 12 months -0.3% 0.0% 0.0% 0.1%Since 1990 16.1% -3.2% 0.0% 1.8%In last quarter -20.9% -16.9% 0.0%Previous 12 months -7.1% 0.3% 0.0% 1.7%Since 1990 -5.2% 0.0% 2.9%In last quarter -0.5% -0.5% -0.3% 0.0%Previous 12 months -0.4% -0.1% -0.1% 0.0%Since 1990 14.3% -5.0% -1.8% 0.0%In last quarter -36.8% -33.6% -20.0% 0.0%Previous 12 months -8.7% -1.3% -1.6% 0.0%Since 1990 22.6% -7.8% -2.8% 0.0%






Points increase

Percent increase


• Table 48: RPI – CPI comparison – Unemployment, education and sickness allowances


Quarter

RPI with Urban Transport Fares only, Unemployment/

sickness/ education allowance

RPI with Rental component only, Unemployment/ sickness/ education

allowance

All Groups (? CPI)

Melbourne

CPI, Australia


4.7% 4.4% 4.5%

25.1%

Previous 12 months 4.0%Since 1990 73.2% 68.2% 61.4% 63.1%In last quarter -0.4% 0.0% 0.0% 0.3%Previous 12 months -0.5% 0.2% 0.0% 0.1%Since 1990 11.8% 6.8% 0.0% 1.8%In last quarter -31.0% 2.4% 0.0%Previous 12 months -10.4% 5.5% 0.0% 1.7%Since 1990 19.2% 11.1% 0.0% 2.9%In last quarter -0.7% -0.3% -0.3% 0.0%Previous 12 months -0.5% 0.2% -0.1% 0.0%Since 1990 10.0% 5.0% -1.8% 0.0%In last quarter -44.8% -18.1% -20.0% 0.0%Previous 12 months -11.8% 3.8% -1.6% 0.0%Since 1990 15.9% 8.0% -2.8% 0.0%






Points increase

Percent increase

• Table 49: RPI – CPI component comparison – Unemployment, education and sickness allowances



The difference between the 15th series basket weight constants for the Unemployment, Education and Sickness Allowances households and All Households is shown for Melbourne in Table 50. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Unemployment, Education and Sickness Allowances households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐0.7 points, is the difference between the RPI baselines of 163.4 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households

Unemployment/ sickness/ education

allowanceDifference

Variance (percent

difference)

Difference from All


1 Food 13.4% 14.8% 1.4% 10.5% 2.82 Alcohol and Tobacco 4.0% 5.9% 1.9% 46.9% 5.43 Clothing and Footwear 4.7% 2.5% -2.2% -47.5% -2.74 Housing 22.9% 26.8% 3.9% 16.8% 5.45 Household Furnishings, Supplies and Services 10.6% 9.8% -0.8% -7.3% -1.16 Health 2.8% 1.4% -1.4% -49.0% -3.97 Transportation 11.8% 9.3% -2.5% -20.9% -4.78 Communication 4.0% 6.8% 2.8% 68.8% 3.49 Recreation 11.8% 9.4% -2.4% -20.6% -3.710 Education 1.6% 1.0% -0.5% -33.0% -1.511 Financial and Insurance Services 12.4% 12.3% -0.1% -0.8% -0.1

Total 100.0% 100.0% 0.0% n/a -0.7

Variance in weights: ''Unemployment, education and sickness allowances'' from ''All Households'' Melbourne (June 2005)

• Table 50: Weights variance – Unemployment, education and sickness allowances

The significant positive differences in points contributions for Housing, Alcohol and Tobacco, and Communications indicate areas of particular interest for the household group as a whole. Across the household group, these are negated by Transportation, Health and Recreation amongst others. The variation in the differences in points contributions requires careful interpretation particularly considering the different lifecycles and lifestyles within the group.

The equivalent data set for the Housing and Transportation subgroups is shown in Table 51.

Points contribution

Expenditure Subgroup All households


allowanceDifference

Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a 2.97.1 Private motoring 11.2% 10.6% -0.5% -4.6% -1.07.2 Urban transport fares 0.7% 1.2% 0.5% 78.7% 1.4

Total 11.8% 11.8% 0.0% n/a 0.5

Variance in weights: ''Unemployment, education and sickness allowances'' from ''All Households'' Melbourne (June 2005)

• Table 51: Weights variance, subgroups – Unemployment, education and sickness allowances




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 52 shows a significantly lower average expenditure ratio for Other Housing to Rental, and a lower ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).



allowanceDifference Percent difference


Total 910.63$ 465.71$ 444.92-$ -48.9%

Average weekly household expenditure: comparison of ''Unemployment, education and sickness allowances'' and ''All Households'' Melbourne (June 2005)

• Table 52: Expenditure – Unemployment, education and sickness allowances



allowanceDifference Percent difference

4.1 Rents 48.06$ 54.51$ 6.45$ 13.4%4.2 Utilities 25.42$ 19.90$ 5.52-$ -21.7%4.3 Other Housing 135.20$ 48.68$ 86.53-$ -64.0%


Total 107.63$ 43.82$ 63.81-$ -59.3%

Average weekly household expenditure: comparison of ''Unemployment, education and sickness allowances'' and ''All Households'' Melbourne (June 2005)

• Table 53: Expenditure, subgroups – Unemployment, education and sickness allowances



allowance

Percent of Total,


Ratio, Unemployment/

sickness/ education allowance



Total 107.63$ 43.82$ 100.0%

0.89

9.08

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Unemployment/ sickness/ education allowance, Melbourne (June 2005)

• Table 54: Subgroups expenditure comparison – Unemployment, education and sickness allowances



Other government pensions and allowances

RPI Other government pensions and allowances

The Other Government Pensions and Allowances baseline RPI for Melbourne runs marginally above or below the CPI since 1990, the difference varying more‐or‐less in line with changes in the CPI series. The RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and the lower limit runs below the CPI by a significant margin since the introduction of the 14th series in June 2000. Melbourne’s RPI Upper Limit for Other Government Pensions and Allowances runs significantly above the RPI Upper Limit for All Households Australia prior to the 14th Series CPI.

RPI for ''Other government pensions and allowances'' Melbourne, compared to CPI

RPI baseline for Other, Melbourne, Jun-2008, 163.4



combined, Other, Melbourne, Jun-2008, 158.0


Other, Melbourne, Jun-2008, 177.3


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 28: RPI Other government pensions and allowances


Other government pensions and allowances Melbourne, September 2008 58




For Other Government Pensions and Allowances, the RPI Upper Limit has increased at a rate 21.9% greater than the CPI, and 25.4.0% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Other RPI Lower Limit, Other CPI, Melbourne

CPI, Australia


4.1% 4.4% 4.5%77.0%

25.1%

25.4%

Previous 12 months 3.8%Since 1990 58.0% 61.4% 63.1%In last quarter -0.2% -0.2% 0.0% 0.3%Previous 12 months -0.7% -0.3% 0.0% 0.1%Since 1990 15.6% -3.4% 0.0% 1.8%In last quarter -20.9% -16.0% 0.0%Previous 12 months -14.7% -7.9% 0.0% 1.7%Since 1990 -5.5% 0.0% 2.9%In last quarter -0.5% -0.5% -0.3% 0.0%Previous 12 months -0.7% -0.4% -0.1% 0.0%Since 1990 13.8% -5.1% -1.8% 0.0%In last quarter -36.7% -32.8% -20.0% 0.0%Previous 12 months -16.1% -9.4% -1.6% 0.0%Since 1990 21.9% -8.1% -2.8% 0.0%




Points increase

Percent increase



Percent greater than CPI Australia increase • Table 55: RPI – CPI comparison – Other government pensions and allowances


Quarter RPI with Urban Transport Fares only, Other

RPI with Rental component only, Other

CPI, Melbourne

CPI, Australia


4.4% 4.4% 4.5%

4.0% 25.1%

Previous 12 months 3.7%Since 1990 73.6% 67.1% 61.4% 63.1%In last quarter -0.3% 0.0% 0.0% 0.3%Previous 12 months -0.8% -0.1% 0.0% 0.1%Since 1990 12.2% 5.7% 0.0% 1.8%In last quarter -28.7% 0.0%Previous 12 months -17.3% -1.7% 0.0% 1.7%Since 1990 19.9% 9.4% 0.0% 2.9%In last quarter -0.6% -0.2% -0.3% 0.0%Previous 12 months -0.8% -0.1% -0.1% 0.0%Since 1990 10.5% 4.0% -1.8% 0.0%In last quarter -43.0% -16.8% -20.0% 0.0%Previous 12 months -18.7% -3.3% -1.6% 0.0%Since 1990 16.6% 6.3% -2.8% 0.0%




Difference from CPI Melbourne percent increasePercent greater than CPI Melbourne increaseDifference from CPI Australia percent increase

Points increase

Percent increase

• Table 56: RPI – CPI component comparison – Other government pensions and allowances



The difference between the 15th series basket weight constants for the Other Government Pensions and Allowances households and All Households is shown for Melbourne in Table 59. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Other Government Pensions and Allowances households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐0.7 points, is the difference between the RPI baselines of 163.4 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households Other Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 16.6% 3.2% 24.3% 6.42 Alcohol and Tobacco 4.0% 4.3% 0.3% 8.3% 1.03 Clothing and Footwear 4.7% 4.9% 0.2% 4.9% 0.34 Housing 22.9% 24.1% 1.2% 5.2% 1.75 Household Furnishings, Supplies and Services 10.6% 12.0% 1.4% 13.2% 1.96 Health 2.8% 2.0% -0.8% -29.7% -2.37 Transportation 11.8% 10.6% -1.2% -10.6% -2.48 Communication 4.0% 4.9% 0.9% 22.1% 1.19 Recreation 11.8% 9.4% -2.5% -20.8% -3.710 Education 1.6% 0.9% -0.7% -42.8% -2.011 Financial and Insurance Services 12.4% 10.4% -2.1% -16.7% -2.7

Total 100.0% 100.0% 0.0% n/a -0.7

Variance in weights: ''Other government pensions and allowances'' from ''All Households'' Melbourne (June 2005)

• Table 57: Weights variance – Other government pensions and allowances

The significant positive differences of 6.4 points for Food and 1.9 and 1.7 for Housing and Household Furnishings, Supplies and Services respectively indicate areas of relatively greater consumption and/or cost pressure for the household group as a whole. Across the household group, these pressures are virtually negated by Recreation, Financial and Insurance Services, Transportation, Education and Health, although some of the negative differences might reflect lack of sufficient income for higher expenditure in those areas.


Points contribution

Expenditure Subgroup All households Other Difference

Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a 3.17.1 Private motoring 11.2% 11.3% 0.1% 1.0% 0.27.2 Urban transport fares 0.7% 0.5% -0.1% -16.7% -0.3

Total 11.8% 11.8% 0.0% n/a -0.1

Variance in weights: ''Other government pensions and allowances'' from ''All Households'' Melbourne (June 2005)

• Table 58: Weights variance, subgroups – Other government pensions and allowances




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 59 shows a significantly lower average expenditure ratio for Other Housing to Rental, and a higher ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).

Expenditure Group All households Other Difference Percent difference


Total 910.63$ 562.27$ 348.36-$ -38.3%

Average weekly household expenditure: comparison of ''Other government pensions and allowances'' and ''All Households'' Melbourne (June 2005)

• Table 59: Expenditure – Other government pensions and allowances

Expenditure Subgroup All households Other Difference Percent difference



Total 107.63$ 59.35$ 48.27-$ -44.9%

Average weekly household expenditure: comparison of ''Other government pensions and allowances'' and ''All Households'' Melbourne (June 2005)

• Table 60: Expenditure, subgroups – Other government pensions and allowances

Expenditure Subgroup All households Other Percent of

Total, Other Ratio, Other



Total 107.63$ 59.35$ 100.0%

0.81

20.64

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Other, Melbourne (June 2005)

• Table 61: Subgroups expenditure comparison – Other government pensions and allowances


Relative Price Indexes Household family composition

Household family composition

One parent with two or more children

RPI One parent with two or more children

The One Parent with Two or More Children household RPI baseline for Melbourne runs slightly above or below the CPI from 1990 to the introduction of the 14th series in June 2000, then runs significantly lower for the 14th Series and marginally below from the introduction of the 15th Series onwards. The RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and the lower limit runs below the CPI by a significant margin since the introduction of the 14th series in June 2000. The One Parent with Two or More Children household RPIs run noticeably lower during the 14 Series CPI.

RPI for ''One parent households with two or more dependent children'' Melbourne, compared to CPI

RPI baseline for One parent households with two dependent

child only, Melbourne, Jun-2008, 161.8



combined, One parent households with two dependent


RPI, All expenditures on Rental and Transport Fares combined, One parent households with two

dependent child only, Melbourne, Jun-2008, 175.3


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 29: RPI One parent with two or more children


One parent with two or more children Melbourne, September 2008 62




For One Parent with Two or More Children households, the RPI Upper Limit has increased at a rate 18.5% greater than the CPI, and 21.9% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


QuarterRPI Upper Limit, One parent

households with two dependent child only

RPI Lower Limit, One parent households with two dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.4% 4.5%75.8%

25.1%

Previous 12 months 3.7% 4.0%Since 1990 56.3% 61.4% 63.1%In last quarter -0.4% -0.3% 0.0% 0.3%Previous 12 months -0.7% -0.5% 0.0% 0.1%Since 1990 14.5% -5.0% 0.0% 1.8%In last quarter -30.3% -28.0% 0.0%Previous 12 months -16.7% -10.6% 0.0% 1.7%Since 1990 23.6% -8.2% 0.0% 2.9%In last quarter -0.7% -0.6% -0.3% 0.0%Previous 12 months -0.8% -0.5% -0.1% 0.0%Since 1990 12.7% -6.8% -1.8% 0.0%In last quarter -44.3% -42.4% -20.0% 0.0%Previous 12 months -18.1% -12.1% -1.6% 0.0%Since 1990 20.1% -10.8% -2.8% 0.0%




Points increase

Percent increase



Percent greater than CPI Australia increase • Table 62: RPI – CPI comparison – One parent with two or more children


Quarter

RPI with Urban Transport Fares only, One parent

households with two dependent child only

RPI with Rental component only, One parent households

with two dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.3% 4.4% 4.5%

25.1%

Previous 12 months 3.6%Since 1990 72.1% 66.1% 61.4% 63.1%In last quarter -0.5% -0.1% 0.0% 0.3%Previous 12 months -0.9% -0.2% 0.0% 0.1%Since 1990 10.7% 4.7% 0.0% 1.8%In last quarter -39.4% -6.2% 0.0%Previous 12 months -19.8% -4.0% 0.0% 1.7%Since 1990 17.4% 7.7% 0.0% 2.9%In last quarter -0.8% -0.4% -0.3% 0.0%Previous 12 months -1.0% -0.3% -0.1% 0.0%Since 1990 8.9% 3.0% -1.8% 0.0%In last quarter -51.6% -25.0% -20.0% 0.0%Previous 12 months -21.1% -5.6% -1.6% 0.0%Since 1990 14.2% 4.7% -2.8% 0.0%



Points increase

Percent increase




• Table 63: RPI – CPI component comparison – One parent with two or more children



The difference between the 15th series basket weight constants for the One Parent with Two or More Children households and All Households is shown for Melbourne in Table 50. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for One Parent with Two or More Children households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐2.3 points, is the difference between the RPI baselines of 161.8 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution


One parent households with two dependent

child onlyDifference

Variance (percent

difference)

Difference from All


1 Food 13.4% 14.9% 1.6% 11.6% 3.12 Alcohol and Tobacco 4.0% 2.5% -1.5% -36.9% -4.23 Clothing and Footwear 4.7% 5.2% 0.5% 11.4% 0.74 Housing 22.9% 25.4% 2.5% 11.0% 3.55 Household Furnishings, Supplies and Services 10.6% 10.5% -0.1% -0.7% -0.16 Health 2.8% 2.0% -0.8% -27.5% -2.27 Transportation 11.8% 9.1% -2.7% -23.0% -5.28 Communication 4.0% 5.6% 1.6% 39.6% 2.09 Recreation 11.8% 12.1% 0.3% 2.2% 0.410 Education 1.6% 2.5% 1.0% 62.7% 2.911 Financial and Insurance Services 12.4% 10.1% -2.4% -19.1% -3.0

Total 100.0% 100.0% 0.0% n/a -2.3

Variance in weights: ''One parent households with two or more dependent children'' from ''All Households'' Melbourne (June 2005)

• Table 64: Weights variance – One parent with two or more children

The significant positive differences of 3.5, 3.1, 2.9 and 2.0 points for Housing, Food, Education and Communication respectively indicate particular areas of relatively greater consumption and/or cost pressure for the household group as a whole. Across the household group, these pressures are virtually negated by Transportation, Alcohol and Tobacco, Financial and Insurance Services and Health. As with the other household types, care with interpretation is required.


Points contribution




Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a 3.37.1 Private motoring 11.2% 11.1% 0.0% -0.3% -0.17.2 Urban transport fares 0.7% 0.7% 0.0% 4.9% 0.1

Total 11.8% 11.8% 0.0% n/a 0.0

Variance in weights: ''One parent households with two or more dependent children'' from ''All Households'' Melbourne (June 2005)

• Table 65: Weights variance, subgroups – One parent with two or more children




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 52 shows a significantly lower average expenditure ratio for Other Housing to Rental, and a similar ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).



child onlyDifference Percent difference

1 Food 121.62$ 97.87$ 23.75-$ -19.5%2 Alcohol and Tobacco 36.34$ 16.53$ 19.81-$ -54.5%3 Clothing and Footwear 42.66$ 34.26$ 8.41-$ -19.7%4 Housing 208.69$ 166.96$ 41.73-$ -20.0%5 Household Furnishings, Supplies and Services 96.34$ 68.96$ 27.38-$ -28.4%6 Health 25.51$ 13.34$ 12.18-$ -47.7%7 Transportation 107.57$ 59.73$ 47.84-$ -44.5%8 Communication 36.55$ 36.79$ 0.24$ 0.6%9 Recreation 107.87$ 79.47$ 28.40-$ -26.3%10 Education 14.19$ 16.64$ 2.46$ 17.3%11 Financial and Insurance Services 113.27$ 66.04$ 47.23-$ -41.7%

Total 910.63$ 656.60$ 254.03-$ -27.9%

Average weekly household expenditure: comparison of ''One parent households with two or more dependent children'' and ''All Households'' Melbourne (June 2005)

• Table 66: Expenditure – One parent with two or more children






Total 107.63$ 59.79$ 47.84-$ -44.4%

Average weekly household expenditure: comparison of ''One parent households with two or more dependent children'' and ''All Households'' Melbourne (June 2005)

• Table 67: Expenditure, subgroups – One parent with two or more children



child only

Percent, One parent

households with two…

Ratio, One parent households with two dependent

child only



Total 107.63$ 59.79$ 100.0%

0.68

16.18

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, One parent households with two dependent child only, Melbourne (June 2005)

• Table 68: Subgroups expenditure comparison – One parent with two or more children



One parent with one child

RPI One parent with one child

The One Parent with One Child household RPI baseline for Melbourne runs slightly above or below the CPI from 1990 to 1998‐99 (around the introduction of the 13th Series) and then runs significantly lower from the introduction of the 14th Series in June 2000 onwards. Its RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 onwards, while running above the All Households RPI Upper Limit by a further significant margin from late 1992 until the introduction of the 14th Series and then marginally below it. Its lower limit runs below the CPI by a significant margin from 1998‐99.

RPI for ''One parent households with one dependent child only'' Melbourne, compared to CPI

RPI baseline for One parent households with one dependent




combined, One parent households with one dependent



One parent households with one dependent child only,



2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 30: RPI One Parent with One Child


One parent with one child Melbourne, September 2008 66




For One Parent with One Child households, the RPI Upper Limit has increased at a rate 16.2% greater than the CPI, and 19.5% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is less than or similar to the equivalent margin of 19.9% for All Households, Australia.


QuarterRPI Upper Limit, One parent

households with one dependent child only

RPI Lower Limit, One parent households with one dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.2% 4.4% 4.5%

25.1%

Previous 12 months 3.9%Since 1990 73.3% 53.7% 61.4% 63.1%In last quarter -0.3% -0.2% 0.0% 0.3%Previous 12 months -0.5% -0.2% 0.0% 0.1%Since 1990 12.0% -7.7% 0.0% 1.8%In last quarter -21.4% -18.5% 0.0%Previous 12 months -11.5% -4.8% 0.0% 1.7%Since 1990 19.5% -12.6% 0.0% 2.9%In last quarter -0.5% -0.5% -0.3% 0.0%Previous 12 months -0.6% -0.3% -0.1% 0.0%Since 1990 10.2% -9.5% -1.8% 0.0%In last quarter -37.1% -34.8% -20.0% 0.0%Previous 12 months -12.9% -6.3% -1.6% 0.0%Since 1990 16.2% -15.0% -2.8% 0.0%






Points increase

Percent increase


• Table 69: RPI – CPI comparison – One Parent with One Child


Quarter

RPI with Urban Transport Fares only, One parent

households with one dependent child only

RPI with Rental component only, One parent households

with one dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.5% 4.4% 4.5%

3.6% 25.1%







Points increase

Percent increase

• Table 70: RPI – CPI component comparison – One Parent with One Child



The difference between the 15th series basket weight constants for the One Parent with One Child households and All Households is shown for Melbourne in Table 50. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for One Parent with One Child households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐4.2 points, is the difference between the RPI baselines of 159.9 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution


One parent households with one dependent


Variance (percent

difference)

Difference from All


1 Food 13.4% 13.0% -0.3% -2.6% -0.72 Alcohol and Tobacco 4.0% 3.0% -1.0% -25.1% -2.93 Clothing and Footwear 4.7% 4.7% 0.0% -0.7% 0.04 Housing 22.9% 27.4% 4.5% 19.6% 6.35 Household Furnishings, Supplies and Services 10.6% 10.0% -0.6% -5.3% -0.86 Health 2.8% 1.7% -1.1% -38.3% -3.07 Transportation 11.8% 11.5% -0.4% -3.0% -0.78 Communication 4.0% 5.8% 1.8% 45.6% 2.39 Recreation 11.8% 10.6% -1.2% -10.4% -1.8

10 Education 1.6% 1.2% -0.4% -24.6% -1.111 Financial and Insurance Services 12.4% 11.1% -1.3% -10.8% -1.7

Total 100.0% 100.0% 0.0% n/a -4.2

Variance in weights: ''One parent households with one dependent child only'' from ''All Households'' Melbourne (June 2005)

• Table 71: Weights variance – One Parent with One Child

The significant positive differences of 6.3 and 2.3 points for Housing and Communication respectively indicate that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these pressures are more than negated, primarily by Health, Alcohol and Tobacco, Financial and Insurance Services and Recreation. Again, care with interpretation is required.


Points contribution




Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a 3.57.1 Private motoring 11.2% 11.1% 0.0% -0.4% -0.17.2 Urban transport fares 0.7% 0.7% 0.0% 6.7% 0.1

Total 11.8% 11.8% 0.0% n/a 0.0

Variance in weights: ''One parent households with one dependent child only'' from ''All Households'' Melbourne (June 2005)

• Table 72: Weights variance, subgroups – One Parent with One Child




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 75 shows a significantly lower average expenditure ratio for Other Housing to Rental, and a similar ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).




1 Food 121.62$ 78.52$ 43.10-$ -35.4%2 Alcohol and Tobacco 36.34$ 18.05$ 18.29-$ -50.3%3 Clothing and Footwear 42.66$ 28.08$ 14.59-$ -34.2%4 Housing 208.69$ 165.51$ 43.18-$ -20.7%5 Household Furnishings, Supplies and Services 96.34$ 60.47$ 35.87-$ -37.2%6 Health 25.51$ 10.44$ 15.08-$ -59.1%7 Transportation 107.57$ 69.14$ 38.43-$ -35.7%8 Communication 36.55$ 35.29$ 1.27-$ -3.5%9 Recreation 107.87$ 64.08$ 43.79-$ -40.6%

10 Education 14.19$ 7.09$ 7.10-$ -50.0%11 Financial and Insurance Services 113.27$ 66.93$ 46.34-$ -40.9%

Total 910.63$ 603.60$ 307.03-$ -33.7%

Average weekly household expenditure: comparison of ''One parent households with one dependent child only'' and ''All Households'' Melbourne (June 2005)

• Table 73: Expenditure – One Parent with One Child






Total 107.63$ 69.22$ 38.41-$ -35.7%

Average weekly household expenditure: comparison of ''One parent households with one dependent child only'' and ''All Households'' Melbourne (June 2005)

• Table 74: Expenditure, subgroups – One Parent with One Child



child only

Percent, One parent

households with one …

Ratio, One parent households with one dependent

child only



Total 107.63$ 69.22$ 100.0%

0.58

15.89

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, One parent households with one dependent child only, Melbourne (June 2005)


• Table 75: Subgroups expenditure comparison – One Parent with One Child


Couple with three or more children

RPI Couple with three or more children

The Couple with Three or More Children household baseline RPI for Melbourne runs marginally above the CPI from 1992 to the introduction of the 14th Series in June 2000, and slightly below the CPI since. The RPI Upper Limit runs consistently above the CPI by a large margin and above the All Households RPI Upper Limit by a further significant margin, from late 1990. The lower limit runs marginally above the CPI prior the introduction of the 14th Series in June 2000 and marginally below it since.

RPI for ''Couple with three or more dependent children only'' Melbourne, compared to CPI

RPI baseline for Couple with three or more dependent

children only, Melbourne, Jun-2008, 163.6


RPI, All expenditures on House Ownership and Private Motoring combined, Couple with three or more dependent children only, Melbourne, Jun-2008, 162.0


Couple with three or more dependent children only,



2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index

W ith all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport



• Figure 31: RPI Couple with three or more children


Couple with three or more children Melbourne, September 2008 70




For Couple with Three or More Children households, the RPI Upper Limit has increased at a rate 30.2% greater than the CPI, and 34.0% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


QuarterRPI Upper Limit, Couple with

three or more dependent children only

RPI Lower Limit, Couple with three or more dependent

children only

All Groups (? CPI)

Melbourne

CPI, Australia


4.3% 4.4% 4.5%82.2%

25.1%

34.0%

30.2%

Previous 12 months 4.0%Since 1990 62.3% 61.4% 63.1%In last quarter -0.2% -0.2% 0.0% 0.3%Previous 12 months -0.5% -0.2% 0.0% 0.1%Since 1990 20.8% 0.9% 0.0% 1.8%In last quarter -17.2% -14.7% 0.0%Previous 12 months -10.3% -4.0% 0.0% 1.7%Since 1990 1.5% 0.0% 2.9%In last quarter -0.5% -0.5% -0.3% 0.0%Previous 12 months -0.5% -0.3% -0.1% 0.0%Since 1990 19.1% -0.9% -1.8% 0.0%In last quarter -33.8% -31.8% -20.0% 0.0%Previous 12 months -11.7% -5.6% -1.6% 0.0%Since 1990 -1.4% -2.8% 0.0%




Points increase

Percent increase



Percent greater than CPI Australia increase • Table 76: RPI – CPI comparison – Couple with three or more children


Quarter

RPI with Urban Transport Fares only, Couple with

three or more dependent children only

RPI with Rental component only, Couple with three or more dependent children

only

All Groups (? CPI)

Melbourne

CPI, Australia


4.6% 4.4% 4.5%

7.4% 25.1%




Points increase

Percent increase




• Table 77: RPI – CPI component comparison – Couple with three or more children



The difference between the 15th series basket weight constants for the Couple with Three or More Children households and All Households is shown for Melbourne in Table 78. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.


Points contribution


Couple with three or more dependent

children onlyDifference

Variance (percent

difference)

Difference from All


1 Food 13.4% 13.9% 0.5% 4.1% 1.12 Alcohol and Tobacco 4.0% 2.2% -1.7% -43.8% -5.03 Clothing and Footwear 4.7% 5.3% 0.6% 13.7% 0.84 Housing 22.9% 26.8% 3.9% 16.9% 5.45 Household Furnishings, Supplies and Services 10.6% 10.0% -0.6% -5.6% -0.86 Health 2.8% 2.4% -0.4% -14.4% -1.17 Transportation 11.8% 10.0% -1.8% -15.6% -3.58 Communication 4.0% 3.2% -0.8% -19.9% -1.09 Recreation 11.8% 12.3% 0.4% 3.8% 0.710 Education 1.6% 3.4% 1.9% 119.8% 5.511 Financial and Insurance Services 12.4% 10.5% -2.0% -15.9% -2.5

Total 100.0% 100.0% 0.0% n/a -0.6

Variance in weights: ''Couple with three or more dependent children only'' from ''All Households'' Melbourne (June 2005)

• Table 78: Weights variance – Couple with three or more children

The significant positive differences of 5.5 points for Education and 5.4 points for Housing indicate that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these contributions are negated, primarily by Alcohol and Tobacco, Transportation and Financial and Insurance Services. Again, care with interpretation is required.


Points contribution



children onlyDifference

Variance (percent

difference)

Difference from All


4.1 Rents 5.3% 2.7% -2.6% -48.7% -4.64.2 Utilities 2.8% 2.2% -0.6% -21.8% -1.34.3 Other Housing 14.8% 18.0% 3.2% 21.4% 4.2

Total 22.9% 22.9% 0.0% n/a -1.77.1 Private motoring 11.2% 11.4% 0.3% 2.4% 0.57.2 Urban transport fares 0.7% 0.4% -0.3% -41.1% -0.7

Total 11.8% 11.8% 0.0% n/a -0.2

Variance in weights: ''Couple with three or more dependent children only'' from ''All Households'' Melbourne (June 2005)

• Table 79: Weights variance, subgroups – Couple with three or more children




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 80 shows a significantly higher average expenditure ratio for Other Housing to Rental, and a higher ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).



children onlyDifference Percent difference

1 Food 121.62$ 198.47$ 76.84$ 63.2%2 Alcohol and Tobacco 36.34$ 32.00$ 4.35-$ -12.0%3 Clothing and Footwear 42.66$ 76.05$ 33.38$ 78.2%4 Housing 208.69$ 382.40$ 173.71$ 83.2%5 Household Furnishings, Supplies and Services 96.34$ 142.57$ 46.23$ 48.0%6 Health 25.51$ 34.23$ 8.72$ 34.2%7 Transportation 107.57$ 142.31$ 34.74$ 32.3%8 Communication 36.55$ 45.92$ 9.37$ 25.6%9 Recreation 107.87$ 175.49$ 67.62$ 62.7%10 Education 14.19$ 48.91$ 34.72$ 244.7%11 Financial and Insurance Services 113.27$ 149.44$ 36.17$ 31.9%

Total 910.63$ 1,427.78$ 517.15$ 56.8%

Average weekly household expenditure: comparison of ''Couple with three or more dependent children only'' and ''All Households'' Melbourne (June 2005)

• Table 80: Expenditure – Couple with three or more children



children onlyDifference Percent difference

4.1 Rents 48.06$ 45.50$ 2.56-$ -5.3%4.2 Utilities 25.42$ 36.71$ 11.29$ 44.4%4.3 Other Housing 135.20$ 303.29$ 168.09$ 124.3%

Total 208.69$ 385.51$ 176.82$ 84.7%7.1 Private motoring 101.65$ 137.24$ 35.58$ 35.0%7.2 Urban transport fares 5.97$ 4.64$ 1.33-$ -22.3%

Total 107.63$ 141.88$ 34.25$ 31.8%

Average weekly household expenditure: comparison of ''Couple with three or more dependent children only'' and ''All Households'' Melbourne (June 2005)

• Table 81: Expenditure, subgroups – Couple with three or more children



children only

Percent, Couple with three or

more depen…

Ratio, Couple with three or more

dependent children only



Total 107.63$ 141.88$ 100.0%

6.67

29.58

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple with three or more dependent children only, Melbourne (June 2005)

• Table 82: Subgroups expenditure comparison – Couple with three or more children



Couple with one child

RPI Couple with one child

The Couple with One Child household baseline RPI for Melbourne runs marginally above the CPI from 1992 to the introduction of the 14th Series in June 2000, and slightly below the CPI since. The RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and above the All Households RPI Upper Limit by a further significant margin from late 1990 but with the margin reducing after the introduction of the 14th Series in June 2000. The lower limit runs marginally above the CPI prior to June 2000 and marginally below it afterwards.

RPI for ''Couple with one dependent child only'' Melbourne, compared to CPI

RPI baseline for Couple with one dependent child only,




combined, Couple with one dependent child only,



Couple with one dependent child only, Melbourne, Jun-

2008, 180.1


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index


Average weekly household expenditure on Transportation = $125.42 (June

2005)Average weekly household expenditure

on Housing = $257.78 (June 2005)

• Figure 32: RPI Couple with one child


Couple with one child Melbourne, September 2008 74




For Couple with One Child households, the RPI Upper Limit has increased at a rate 27.4% greater than the CPI, and 31.1% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Couple with one dependent child only

RPI Lower Limit, Couple with one dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.1% 4.4% 4.4% 4.5%80.5%

25.1%

31.1%

27.4%

Previous 12 monthsSince 1990 60.8% 61.4% 63.1%In last quarter -0.1% 0.0% 0.0% 0.3%Previous 12 months -0.3% 0.0% 0.0% 0.1%Since 1990 19.1% -0.6% 0.0% 1.8%In last quarter -5.3% -0.7% 0.0%Previous 12 months -7.8% -0.9% 0.0% 1.7%Since 1990 -1.0% 0.0% 2.9%In last quarter -0.4% -0.3% -0.3% 0.0%Previous 12 months -0.4% -0.1% -0.1% 0.0%Since 1990 17.3% -2.4% -1.8% 0.0%In last quarter -24.3% -20.6% -20.0% 0.0%Previous 12 months -9.3% -2.5% -1.6% 0.0%Since 1990 -3.7% -2.8% 0.0%




Points increase

Percent increase



Percent greater than CPI Australia increase • Table 83: RPI – CPI comparison – Couple with one child


QuarterRPI with Urban Transport

Fares only, Couple with one dependent child only

RPI with Rental component only, Couple with one dependent child only

All Groups (? CPI)

Melbourne

CPI, Australia


4.7% 4.4% 4.5%

19.8% 25.1%




Points increase

Percent increase




• Table 84: RPI – CPI component comparison – Couple with one child



The difference between the 15th series basket weight constants for the Couple with One Child households and All Households is shown for Melbourne in Table 85. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.


Points contribution


Couple with one dependent child only Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 13.0% -0.3% -2.5% -0.62 Alcohol and Tobacco 4.0% 3.4% -0.5% -13.7% -1.63 Clothing and Footwear 4.7% 4.8% 0.1% 1.8% 0.14 Housing 22.9% 22.9% -0.1% -0.2% -0.15 Household Furnishings, Supplies and Services 10.6% 11.6% 1.1% 10.0% 1.56 Health 2.8% 2.8% 0.0% -1.5% -0.17 Transportation 11.8% 11.1% -0.7% -5.8% -1.38 Communication 4.0% 3.9% -0.2% -3.8% -0.29 Recreation 11.8% 11.0% -0.9% -7.4% -1.3

10 Education 1.6% 1.8% 0.3% 18.1% 0.811 Financial and Insurance Services 12.4% 13.7% 1.3% 10.2% 1.6

Total 100.0% 100.0% 0.0% n/a -1.2

Variance in weights: ''Couple with one dependent child only'' from ''All Households'' Melbourne (June 2005)

• Table 85: Weights variance – Couple with one child

The positive differences of 1.6 points for Financial and Insurance Services and 1.5 points for Household Furnishings, Supplies and Services suggest that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these contributions are negated, primarily by Alcohol and Tobacco, Transportation and Recreation. Again, care with interpretation is required, especially as these are fairly marginal differences.


Points contribution


Couple with one dependent child only Difference

Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a -0.67.1 Private motoring 11.2% 11.2% 0.0% 0.0% 0.07.2 Urban transport fares 0.7% 0.7% 0.0% -0.5% 0.0

Total 11.8% 11.8% 0.0% n/a 0.0

Variance in weights: ''Couple with one dependent child only'' from ''All Households'' Melbourne (June 2005)

• Table 86: Weights variance, subgroups – Couple with one child




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 89 shows a significantly higher average expenditure ratio for Other Housing to Rental, and a similar ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see p. 49).


Couple with one dependent child only Difference Percent difference

1 Food 121.62$ 146.89$ 25.26$ 20.8%2 Alcohol and Tobacco 36.34$ 38.82$ 2.48$ 6.8%3 Clothing and Footwear 42.66$ 53.75$ 11.09$ 26.0%4 Housing 208.69$ 257.78$ 49.09$ 23.5%5 Household Furnishings, Supplies and Services 96.34$ 131.17$ 34.82$ 36.1%6 Health 25.51$ 31.12$ 5.60$ 22.0%7 Transportation 107.57$ 125.42$ 17.85$ 16.6%8 Communication 36.55$ 43.54$ 6.99$ 19.1%9 Recreation 107.87$ 123.68$ 15.80$ 14.7%10 Education 14.19$ 20.74$ 6.56$ 46.2%11 Financial and Insurance Services 113.27$ 154.53$ 41.26$ 36.4%

Total 910.63$ 1,127.44$ 216.81$ 23.8%

Average weekly household expenditure: comparison of ''Couple with one dependent child only'' and ''All Households'' Melbourne (June 2005)

• Table 87: Expenditure – Couple with one child


Couple with one dependent child only Difference Percent difference

4.1 Rents 48.06$ 47.33$ 0.73-$ -1.5%4.2 Utilities 25.42$ 30.40$ 4.97$ 19.6%4.3 Other Housing 135.20$ 180.55$ 45.34$ 33.5%

Total 208.69$ 258.27$ 49.58$ 23.8%7.1 Private motoring 101.65$ 118.55$ 16.90$ 16.6%7.2 Urban transport fares 5.97$ 6.93$ 0.95$ 16.0%

Total 107.63$ 125.48$ 17.85$ 16.6%

Average weekly household expenditure: comparison of ''Couple with one dependent child only'' and ''All Households'' Melbourne (June 2005)

• Table 88: Expenditure, subgroups – Couple with one child


Couple with one dependent child only

Percent, Couple with one

dependent child…

Ratio, Couple with one dependent

child only



Total 107.63$ 125.48$ 100.0%

3.81

17.11

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple with one dependent child only, Melbourne (June 2005)

• Table 89: Subgroups expenditure comparison – Couple with one child



Lone person

RPI Lone person

The Lone Person RPI baseline for Melbourne runs marginally above or below the CPI from 1990 to 1997‐98 (before the 13th Series) then significantly below it to the present. The Lone Person RPI Upper Limit runs consistently above the CPI by a large margin from late 1990 and the lower limit runs below the CPI by a significant margin from 1997‐98 which increases after the introduction of the 14th series in June 2000.

RPI for ''Lone person household'' Melbourne, compared to CPI

RPI baseline for Lone person household, Melbourne, Jun-

2008, 162.5



combined, Lone person household, Melbourne, Jun-

2008, 158.1


Lone person household, Melbourne, Jun-2008, 177.7


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 33: RPI Lone person


Lone person Melbourne, September 2008 78




For Lone Person households, the RPI Upper Limit has increased at a rate 24.3% greater than the CPI, and 27.9% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Lone person household

RPI Lower Limit, Lone person household

All Groups (? CPI)

Melbourne

CPI, Australia


4.2% 4.5% 4.4% 4.5%78.5%

25.1%

27.9%

Previous 12 monthsSince 1990 58.7% 61.4% 63.1%In last quarter -0.1% -0.1% 0.0% 0.3%Previous 12 months -0.2% 0.1% 0.0% 0.1%Since 1990 17.1% -2.6% 0.0% 1.8%In last quarter -10.6% -6.5% 0.0%Previous 12 months -5.5% 1.7% 0.0% 1.7%Since 1990 -4.3% 0.0% 2.9%In last quarter -0.4% -0.4% -0.3% 0.0%Previous 12 months -0.3% 0.0% -0.1% 0.0%Since 1990 15.4% -4.4% -1.8% 0.0%In last quarter -28.5% -25.3% -20.0% 0.0%Previous 12 months -7.1% 0.1% -1.6% 0.0%Since 1990 24.3% -7.0% -2.8% 0.0%






Points increase

Percent increase


• Table 90: RPI – CPI comparison – Lone person


QuarterRPI with Urban Transport Fares only, Lone person

household

RPI with Rental component only, Lone person household

All Groups (? CPI)

Melbourne

CPI, Australia


4.8% 4.4% 4.5%

14.0% 25.1%







Points increase

Percent increase

• Table 91: RPI – CPI component comparison – Lone person



The difference between the 15th series basket weight constants for Lone Person households and All Households is shown for Melbourne in Table 92. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Lone Person households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐1.7 points, is the difference between the RPI baselines of 162.5 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households Lone person household Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 11.6% -1.7% -13.0% -3.42 Alcohol and Tobacco 4.0% 4.7% 0.7% 17.8% 2.03 Clothing and Footwear 4.7% 3.6% -1.1% -24.2% -1.44 Housing 22.9% 28.8% 5.9% 25.9% 8.35 Household Furnishings, Supplies and Services 10.6% 10.4% -0.2% -1.7% -0.26 Health 2.8% 3.1% 0.3% 11.3% 0.97 Transportation 11.8% 10.5% -1.3% -11.2% -2.58 Communication 4.0% 4.5% 0.5% 12.6% 0.69 Recreation 11.8% 10.2% -1.6% -13.8% -2.510 Education 1.6% 0.6% -1.0% -63.1% -2.911 Financial and Insurance Services 12.4% 12.0% -0.5% -3.9% -0.6

Total 100.0% 100.0% 0.0% n/a -1.7

Variance in weights: ''Lone person household'' from ''All Households'' Melbourne (June 2005)

• Table 92: Weights variance – Lone person

The positive differences of 8.3 points for Housing and 2.0 points for Alcohol and Tobacco indicate that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these contributions are negated, primarily by Food, Education, Transportation and Recreation. The Housing contribution is notable, as are the apparent patterns of consumption linked to lifestyle and/or lifecycle, so careful interpretation is required.


Points contribution

Expenditure Subgroup All households Lone person household Difference

Variance (percent

difference)

Difference from All


4.1 Rents 5.3% 7.9% 2.6% 49.8% 4.74.2 Utilities 2.8% 2.7% -0.1% -2.0% -0.14.3 Other Housing 14.8% 12.3% -2.6% -17.3% -3.4

Total 22.9% 22.9% 0.0% n/a 1.27.1 Private motoring 11.2% 11.0% -0.2% -1.5% -0.37.2 Urban transport fares 0.7% 0.8% 0.2% 26.3% 0.5

Total 11.8% 11.8% 0.0% n/a 0.2

Variance in weights: ''Lone person household'' from ''All Households'' Melbourne (June 2005)

• Table 93: Weights variance, subgroups – Lone person




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 94 shows a significantly lower average expenditure ratio for Other Housing to Rental, and a lower ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).

Expenditure Group All households Lone person household Difference Percent difference


Total 910.63$ 487.68$ 422.95-$ -46.4%

Average weekly household expenditure: comparison of ''Lone person household'' and ''All Households'' Melbourne (June 2005)

• Table 94: Expenditure – Lone person

Expenditure Subgroup All households Lone person household Difference Percent difference



Total 107.63$ 51.33$ 56.30-$ -52.3%

Average weekly household expenditure: comparison of ''Lone person household'' and ''All Households'' Melbourne (June 2005)

• Table 95: Expenditure, subgroups – Lone person

Expenditure Subgroup All households Lone person household

Percent, Lone person

household

Ratio, Lone person household



Total 107.63$ 51.33$ 100.0%

1.55

13.26

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Lone person household, Melbourne (June 2005)


• Table 96: Subgroups expenditure comparison – Lone person


RPI Couple Only

The Couple Only RPI baseline for Melbourne runs slightly above and below CPI from 1990 to the introduction of the 14th Series in June 2000, and then tracks it closely to the present. The RPI Upper Limit runs consistently above the CPI from late 1990 and by a larger margin from 1997. The lower limit runs slightly above and below CPI from 1990 to the introduction of the 13th Series and marginally below the CPI from the introduction of the 14th series in June 2000. The Couple Only RPI Upper Limit runs consistently above the All Households RPI Upper Limit from 1991 onwards.

RPI for ''Couple only'' Melbourne, compared to CPI

RPI baseline for Couple only, Melbourne, Jun-2008, 163.9



combined, Couple only, Melbourne, Jun-2008, 161.8

RPI, All expenditures on Rental and Transport Fares combined, Couple only, Melbourne, Jun-

2008, 181.4


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index





• Figure 34: RPI Couple Only


RPI Couple Only Melbourne, September 2008 82




For Couple Only households, the RPI Upper Limit has increased at a rate 29.7% greater than the CPI, and 33.5% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Couple only RPI Lower Limit, Couple onlyAll Groups (?

CPI) Melbourne

CPI, Australia


4.1% 4.4% 4.4% 4.5%81.9%

25.1%

33.5%

29.7%

Previous 12 monthsSince 1990 62.3% 61.4% 63.1%In last quarter 0.0% 0.0% 0.0% 0.3%Previous 12 months -0.4% -0.1% 0.0% 0.1%Since 1990 20.5% 0.9% 0.0% 1.8%In last quarter -3.5% 1.5% 0.0%Previous 12 months -8.3% -1.5% 0.0% 1.7%Since 1990 1.4% 0.0% 2.9%In last quarter -0.3% -0.3% -0.3% 0.0%Previous 12 months -0.4% -0.1% -0.1% 0.0%Since 1990 18.8% -0.9% -1.8% 0.0%In last quarter -22.8% -18.8% -20.0% 0.0%Previous 12 months -9.8% -3.1% -1.6% 0.0%Since 1990 -1.4% -2.8% 0.0%




Points increase

Percent increase



Percent greater than CPI Australia increase • Table 97: RPI – CPI comparison – Couple Only


Quarter RPI with Urban Transport Fares only, Couple only

RPI with Rental component only, Couple only

All Groups (? CPI)

Melbourne

CPI, Australia


4.6% 4.4% 4.5%

21.9% 25.1%

Previous 12 months 3.8%Since 1990 74.2% 72.1% 61.4% 63.1%In last quarter -0.2% 0.3% 0.0% 0.3%Previous 12 months -0.6% 0.2% 0.0% 0.1%Since 1990 12.9% 10.7% 0.0% 1.8%In last quarter -21.0% 0.0%Previous 12 months -14.1% 4.8% 0.0% 1.7%Since 1990 21.0% 17.4% 0.0% 2.9%In last quarter -0.5% 0.0% -0.3% 0.0%Previous 12 months -0.7% 0.1% -0.1% 0.0%Since 1990 11.1% 8.9% -1.8% 0.0%In last quarter -36.8% -2.6% -20.0% 0.0%Previous 12 months -15.5% 3.1% -1.6% 0.0%Since 1990 17.6% 14.1% -2.8% 0.0%



Points increase

Percent increase




• Table 98: RPI – CPI component comparison – Couple Only



The difference between the 15th series basket weight constants for the Couple Only households and All Households is shown for Melbourne in Table 106. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Couple Only households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐0.2 points, is the difference between the RPI baselines of 163.9 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households Couple only Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 13.2% -0.2% -1.4% -0.42 Alcohol and Tobacco 4.0% 4.0% 0.0% 0.2% 0.03 Clothing and Footwear 4.7% 4.3% -0.4% -8.1% -0.54 Housing 22.9% 21.6% -1.3% -5.7% -1.85 Household Furnishings, Supplies and Services 10.6% 11.8% 1.2% 11.4% 1.76 Health 2.8% 3.4% 0.6% 21.5% 1.77 Transportation 11.8% 12.3% 0.5% 4.4% 1.08 Communication 4.0% 3.5% -0.5% -11.8% -0.69 Recreation 11.8% 12.9% 1.0% 8.5% 1.5

10 Education 1.6% 0.6% -1.0% -61.6% -2.811 Financial and Insurance Services 12.4% 12.4% 0.0% -0.3% 0.0

Total 100.0% 100.0% 0.0% n/a -0.2

Variance in weights: ''Couple only'' from ''All Households'' Melbourne (June 2005)

• Table 99: Weights variance – Couple Only

The positive differences of 1.7 points for Household Furnishings, Supplies and Services, 1.7 points for Health and 1.5 points for Recreation indicate that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these contributions are negated, primarily by Education and Housing. Again, care with interpretation is required.


Points contribution

Expenditure Subgroup All households Couple only Difference

Variance (percent

difference)

Difference from All


4.1 Rents 5.3% 3.6% -1.6% -31.2% -2.94.2 Utilities 2.8% 2.9% 0.1% 2.4% 0.14.3 Other Housing 14.8% 16.4% 1.6% 10.6% 2.1


Total 11.8% 11.8% 0.0% n/a -0.1

Variance in weights: ''Couple only'' from ''All Households'' Melbourne (June 2005)

• Table 100: Weights variance, subgroups – Couple Only




The AWHE for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 101 shows a significantly higher average expenditure ratio for Other Housing to Rental, and a marginally higher ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).

Expenditure Group All households Couple only Difference Percent difference

1 Food 121.62$ 118.00$ 3.63-$ -3.0%2 Alcohol and Tobacco 36.34$ 35.82$ 0.52-$ -1.4%3 Clothing and Footwear 42.66$ 38.60$ 4.06-$ -9.5%4 Housing 208.69$ 193.63$ 15.06-$ -7.2%5 Household Furnishings, Supplies and Services 96.34$ 105.62$ 9.27$ 9.6%6 Health 25.51$ 30.50$ 4.98$ 19.5%7 Transportation 107.57$ 110.57$ 3.00$ 2.8%8 Communication 36.55$ 31.73$ 4.82-$ -13.2%9 Recreation 107.87$ 115.22$ 7.34$ 6.8%

10 Education 14.19$ 5.36$ 8.83-$ -62.2%11 Financial and Insurance Services 113.27$ 111.13$ 2.14-$ -1.9%

Total 910.63$ 896.18$ 14.45-$ -1.6%

Average weekly household expenditure: comparison of ''Couple only'' and ''All Households'' Melbourne (June 2005)

• Table 101: Expenditure – Couple Only

Expenditure Subgroup All households Couple only Difference Percent difference

4.1 Rents 48.06$ 30.70$ 17.36-$ -36.1%4.2 Utilities 25.42$ 24.18$ 1.25-$ -4.9%4.3 Other Housing 135.20$ 138.94$ 3.73$ 2.8%

Total 208.69$ 193.82$ 14.87-$ -7.1%7.1 Private motoring 101.65$ 105.72$ 4.07$ 4.0%7.2 Urban transport fares 5.97$ 4.68$ 1.29-$ -21.6%

Total 107.63$ 110.40$ 2.78$ 2.6%

Average weekly household expenditure: comparison of ''Couple only'' and ''All Households'' Melbourne (June 2005)

• Table 102: Expenditure, subgroups – Couple Only

Expenditure Subgroup All households Couple only Percent, Couple

only Ratio, Couple only



Total 107.63$ 110.40$ 100.0%

4.53

22.57

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple only, Melbourne (June 2005)

• Table 103: Subgroups expenditure comparison – Couple Only


Relative Price Indexes Income types

Income types

Wage and Salary

RPI Wage and Salary

The Wage and Salary RPI baseline for Melbourne runs marginally above CPI from 1990 to the introduction of the 14th series in June 2000, then tracks it closely to the present. The RPI Upper Limit runs consistently above the CPI from late 1990 and by a larger margin from 1997‐98. The lower limit runs marginally above the CPI from 1992 to 1999 and significantly below the CPI from the introduction of the 14th series in June 2000. The Wage and Salary RPI Upper Limit runs consistently above the All Households RPI Upper Limit from 1991 onwards.

RPI for ''Employees Wages and salaries'' Melbourne, compared to CPI

RPI baseline for Wage and salary, Melbourne, Jun-2008,

163.7



combined, Wage and salary, Melbourne, Jun-2008, 160.8

RPI, All expenditures on Rental and Transport Fares combined, Wage and salary, Melbourne,

Jun-2008, 180.6


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index




• Figure 35: RPI Wage and Salary


Wage and Salary Melbourne, September 2008 86




For Wage and Salary, the RPI Upper Limit has increased at a rate 28.6% greater than the CPI, and 32.3% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Wage and salary

RPI Lower Limit, Wage and salary

All Groups (? CPI)

Melbourne

CPI, Australia


4.1% 4.4% 4.4% 4.5%81.2%

25.1%

32.3%

28.6%

Previous 12 monthsSince 1990 61.4% 61.4% 63.1%In last quarter -0.1% 0.0% 0.0% 0.3%Previous 12 months -0.3% 0.0% 0.0% 0.1%Since 1990 19.8% 0.0% 0.0% 1.8%In last quarter -6.4% -2.2% 0.0%Previous 12 months -6.9% -0.1% 0.0% 1.7%Since 1990 0.0% 0.0% 2.9%In last quarter -0.4% -0.3% -0.3% 0.0%Previous 12 months -0.4% -0.1% -0.1% 0.0%Since 1990 18.0% -1.8% -1.8% 0.0%In last quarter -25.2% -21.8% -20.0% 0.0%Previous 12 months -8.5% -1.7% -1.6% 0.0%Since 1990 -2.8% -2.8% 0.0%






Points increase

Percent increase


• Table 104: RPI – CPI comparison – Wage and Salary


Quarter RPI with Urban Transport Fares only, Wage and salary

RPI with Rental component only, Wage and salary

CPI, Melbourne

CPI, Australia


4.7% 4.4% 4.5%

16.7% 25.1%






Points increase

Percent increase

• Table 105: RPI – CPI component comparison – Wage and Salary



The difference between the 15th series basket weight constants for Wage and Salary households and All Households is shown for Melbourne in Table 106. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Wage and Salary and All Households Australia, both at June 2008, are shown in the last column. The total of this column, ‐0.4 points, is the difference between the RPI baselines of 163.7 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households Wage and salary Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 12.8% -0.6% -4.2% -1.12 Alcohol and Tobacco 4.0% 4.0% 0.0% -0.4% 0.03 Clothing and Footwear 4.7% 4.8% 0.1% 3.1% 0.24 Housing 22.9% 23.2% 0.3% 1.4% 0.45 Household Furnishings, Supplies and Services 10.6% 10.1% -0.5% -4.3% -0.66 Health 2.8% 2.5% -0.3% -10.5% -0.87 Transportation 11.8% 12.0% 0.2% 1.6% 0.48 Communication 4.0% 3.9% -0.1% -2.4% -0.19 Recreation 11.8% 12.1% 0.3% 2.4% 0.4

10 Education 1.6% 1.7% 0.2% 11.0% 0.511 Financial and Insurance Services 12.4% 12.8% 0.3% 2.7% 0.4

Total 100.0% 100.0% 0.0% n/a -0.4

Variance in weights: ''Employees Wages and salaries'' from ''All Households'' Melbourne (June 2005)

• Table 106: Weights variance – Wage and Salary

None of the positive differences in points contributions per expenditure groups are very significant suggesting that there are no particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, the negative contributions are similarly flat. Together the contributions indicate that Wage and Salary household consumption and cost pressure patterns are similar to the All Households group.


Points contribution

Expenditure Subgroup All households Wage and salary Difference

Variance (percent

difference)

Difference from All



Total 22.9% 22.9% 0.0% n/a -0.47.1 Private motoring 11.2% 11.1% -0.1% -0.5% -0.17.2 Urban transport fares 0.7% 0.7% 0.1% 9.2% 0.2

Total 11.8% 11.8% 0.0% n/a 0.1

Variance in weights: ''Employees Wages and salaries'' from ''All Households'' Melbourne (June 2005)

• Table 107: Weights variance, subgroups – Wage and Salary




The AWHE for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 108 shows a significantly higher average expenditure ratio for Other Housing to Rental, and a marginally lower ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).

Expenditure Group All households Wage and salary Difference Percent difference

1 Food 121.62$ 143.26$ 21.63$ 17.8%2 Alcohol and Tobacco 36.34$ 44.52$ 8.18$ 22.5%3 Clothing and Footwear 42.66$ 54.12$ 11.46$ 26.9%4 Housing 208.69$ 260.29$ 51.60$ 24.7%5 Household Furnishings, Supplies and Services 96.34$ 113.38$ 17.04$ 17.7%6 Health 25.51$ 28.09$ 2.58$ 10.1%7 Transportation 107.57$ 134.40$ 26.82$ 24.9%8 Communication 36.55$ 43.88$ 7.32$ 20.0%9 Recreation 107.87$ 135.83$ 27.96$ 25.9%

10 Education 14.19$ 19.37$ 5.18$ 36.5%11 Financial and Insurance Services 113.27$ 143.05$ 29.78$ 26.3%

Total 910.63$ 1,120.18$ 209.55$ 23.0%

Average weekly household expenditure: comparison of ''Employees Wages and salaries'' and ''All Households'' Melbourne (June 2005)

• Table 108: Expenditure – Wage and Salary

Expenditure Subgroup All households Wage and salary Difference Percent difference

4.1 Rents 48.06$ 56.18$ 8.12$ 16.9%4.2 Utilities 25.42$ 28.24$ 2.82$ 11.1%4.3 Other Housing 135.20$ 176.71$ 41.50$ 30.7%

Total 208.69$ 261.12$ 52.44$ 25.1%7.1 Private motoring 101.65$ 126.42$ 24.77$ 24.4%7.2 Urban transport fares 5.97$ 8.15$ 2.18$ 36.5%

Total 107.63$ 134.57$ 26.94$ 25.0%

Average weekly household expenditure: comparison of ''Employees Wages and salaries'' and ''All Households'' Melbourne (June 2005)

• Table 109: Expenditure, subgroups – Wage and Salary

Expenditure Subgroup All households Wage and salary Percent, Wage

and salaryRatio, Wage and

salary



Total 107.63$ 134.57$ 100.0%

3.15

15.51

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Wage and salary, Melbourne (June 2005)

• Table 110: Subgroups expenditure comparison – Wage and Salary



Superannuation or other private income

RPI Superannuation or Other Private Income

The Superannuation or Other Private Income RPI baseline for Melbourne runs marginally above the CPI from 1992 to the present, with less difference in 1999‐2000 and more difference from the introduction of the 15th Series in June 2005 onwards. From 1991 the RPI Upper Limit runs consistently above the CPI by a large margin and above the All Households RPI Upper Limit by a further significant margin. The lower limit runs marginally above or below the CPI from 1992.

RPI for ''Superannuation or other private income'' Melbourne, compared to CPI

RPI baseline for Other income, Melbourne, Jun-2008, 167.3



combined, Other income, Melbourne, Jun-2008, 165.5

RPI, All expenditures on Rental and Transport Fares combined, Other income, Melbourne, Jun-

2008, 184.8


2008, 177.0

12th weight @ 1995

14th Series starts


15th Seriesstarts

13th Seriesstarts


120

140

160

180

Mar-90

Mar-91

Mar-92

Mar-93

Mar-94

Mar-95

Mar-96

Mar-97

Mar-98

Mar-99

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Quarter

Index





• Figure 36: RPI Superannuation or other private income


Superannuation or other private income Melbourne, September 2008 90




For Superannuation or Other Private Income households, the RPI Upper Limit has increased at a rate 35.3% greater than the CPI, and 39.2% greater than the Melbourne All Groups price index, since 1990. This is notable for the large margin and that the margin is significantly greater than the equivalent margin of 19.9% for All Households, Australia.


Quarter RPI Upper Limit, Other income

RPI Lower Limit, Other income

All Groups (? CPI)

Melbourne

CPI, Australia


4.2% 4.4% 4.5%85.4%

25.1%

39.2%

35.3%

Previous 12 months 3.9%Since 1990 66.1% 61.4% 63.1%In last quarter -0.1% 0.0% 0.0% 0.3%Previous 12 months -0.5% -0.2% 0.0% 0.1%Since 1990 24.0% 4.7% 0.0% 1.8%In last quarter -4.4% 1.0% 0.0%Previous 12 months -11.3% -4.8% 0.0% 1.7%Since 1990 7.7% 0.0% 2.9%In last quarter -0.3% -0.3% -0.3% 0.0%Previous 12 months -0.6% -0.3% -0.1% 0.0%Since 1990 22.3% 2.9% -1.8% 0.0%In last quarter -23.6% -19.2% -20.0% 0.0%Previous 12 months -12.7% -6.3% -1.6% 0.0%Since 1990 4.7% -2.8% 0.0%






Points increase

Percent increase


• Table 111: RPI – CPI comparison – Superannuation or other private income


Quarter RPI with Urban Transport Fares only, Other income

RPI with Rental component only, Other income

CPI, Melbourne

CPI, Australia


4.5% 4.4% 4.5%77.4%

18.7% 25.1%

26.2%

Previous 12 months 3.7%Since 1990 74.4% 61.4% 63.1%In last quarter -0.3% 0.2% 0.0% 0.3%Previous 12 months -0.8% 0.0% 0.0% 0.1%Since 1990 16.1% 13.0% 0.0% 1.8%In last quarter -21.5% 0.0%Previous 12 months -17.2% 0.7% 0.0% 1.7%Since 1990 21.2% 0.0% 2.9%In last quarter -0.6% -0.1% -0.3% 0.0%Previous 12 months -0.8% 0.0% -0.1% 0.0%Since 1990 14.3% 11.2% -1.8% 0.0%In last quarter -37.2% -5.1% -20.0% 0.0%Previous 12 months -18.5% -0.9% -1.6% 0.0%Since 1990 22.7% 17.8% -2.8% 0.0%





Points increase

Percent increase

• Table 112: RPI – CPI component comparison – Superannuation or other private income



The difference between the 15th series basket weight constants for the Superannuation or Other Private Income households and All Households is shown for Melbourne in Table 113. The absolute difference, i.e., in terms of the total basket size, is shown in the “Difference” column, and the variance shows the percentage difference in relation to the size of the group.

The differences between the points contributions for Superannuation or Other Private Income households and All Households Australia, both at June 2008, are shown in the last column. The total of this column, 3.2 points, is the difference between the RPI baselines of 167.3 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008.

Points contribution

Expenditure Group All households Other income Difference

Variance (percent

difference)

Difference from All


1 Food 13.4% 12.9% -0.4% -3.1% -0.82 Alcohol and Tobacco 4.0% 3.5% -0.5% -13.1% -1.53 Clothing and Footwear 4.7% 4.5% -0.2% -4.3% -0.24 Housing 22.9% 19.1% -3.8% -16.5% -5.35 Household Furnishings, Supplies and Services 10.6% 12.0% 1.4% 13.4% 2.06 Health 2.8% 5.3% 2.5% 89.1% 7.07 Transportation 11.8% 12.1% 0.3% 2.6% 0.68 Communication 4.0% 3.6% -0.4% -10.8% -0.59 Recreation 11.8% 14.2% 2.3% 19.5% 3.5

10 Education 1.6% 1.6% 0.0% 1.9% 0.111 Financial and Insurance Services 12.4% 11.2% -1.2% -9.6% -1.5

Total 100.0% 100.0% 0.0% n/a 3.2

Variance in weights: ''Superannuation or other private income'' from ''All Households'' Melbourne (June 2005)

• Table 113: Weights variance – Superannuation or other private income

The positive differences of 7.0 points for Health, 3.5 points for Recreation, and 2.0 points for Household Furnishings, Supplies and Services indicate that these are particular areas of relatively greater consumption and/or cost pressure for this household group as a whole. Across the household group, these contributions are only partly negated by Housing at ‐5.3 points, Alcohol and Tobacco (‐1.5 points) and Financial and Insurance Services (‐1.5 points). Again, care with interpretation is required.


Points contribution

Expenditure Subgroup All households Other income Difference

Variance (percent

difference)

Difference from All


4.1 Rents 5.3% 3.1% -2.2% -42.2% -4.04.2 Utilities 2.8% 3.5% 0.7% 25.0% 1.44.3 Other Housing 14.8% 16.4% 1.5% 10.3% 2.0


Total 11.8% 11.8% 0.0% n/a -0.2

Variance in weights: ''Superannuation or other private income'' from ''All Households'' Melbourne (June 2005)

• Table 114: Weights variance, subgroups – Superannuation or other private income




The average weekly household expenditure (AWHE) for the main expenditure groups, and the Housing and the Transport subgroups are shown in the following three tables. Table 115 shows a significantly higher average expenditure ratio for Other Housing to Rental, and a higher ratio for Private Motoring to Urban Transport Fares compared to 2.1 and 17.0 respectively for All Households Australia (see page 49).

Expenditure Group All households Other income Difference Percent difference

1 Food 121.62$ 113.11$ 8.52-$ -7.0%2 Alcohol and Tobacco 36.34$ 30.31$ 6.03-$ -16.6%3 Clothing and Footwear 42.66$ 39.19$ 3.47-$ -8.1%4 Housing 208.69$ 167.36$ 41.33-$ -19.8%5 Household Furnishings, Supplies and Services 96.34$ 104.84$ 8.50$ 8.8%6 Health 25.51$ 46.30$ 20.78$ 81.5%7 Transportation 107.57$ 105.90$ 1.67-$ -1.6%8 Communication 36.55$ 31.29$ 5.26-$ -14.4%9 Recreation 107.87$ 123.69$ 15.82$ 14.7%10 Education 14.19$ 13.88$ 0.31-$ -2.2%11 Financial and Insurance Services 113.27$ 98.24$ 15.03-$ -13.3%

Total 910.63$ 874.11$ 36.52-$ -4.0%

Average weekly household expenditure: comparison of ''Superannuation or other private income'' and ''All Households'' Melbourne (June 2005)

• Table 115: Expenditure – Superannuation or other private income

Expenditure Subgroup All households Other income Difference Percent difference

4.1 Rents 48.06$ 22.19$ 25.87-$ -53.8%4.2 Utilities 25.42$ 25.37$ 0.05-$ -0.2%4.3 Other Housing 135.20$ 119.08$ 16.13-$ -11.9%


Total 107.63$ 105.71$ 1.92-$ -1.8%

Average weekly household expenditure: comparison of ''Superannuation or other private income'' and ''All Households'' Melbourne (June 2005)

• Table 116: Expenditure, subgroups – Superannuation or Other Private Income

Expenditure Subgroup All households Other income Percent, Other

incomeRatio, Other

income



Total 107.63$ 105.71$ 100.0%

5.37

23.56

Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Other income, Melbourne (June 2005)

• Table 117: Subgroups expenditure comparison – Superannuation or Other Private Income


Relative Price Indexes Summary

Summary

Relative Price Indexes

The RPI results for Melbourne as at June 2008 are summarised below.

All Households

The All Households RPI baseline is 164.6 points and the RPI Upper Limit has increased at a rate 19.9% greater than the CPI, since 1990.

The Urban Transport Fares and Rental subgroup components of the RPI Upper Limit have increased at 12.3% and 7.5% above the CPI increase since 1990, respectively. The Private Motoring and House Ownership components have increased at 3.9% below the CPI increase over the same period.

The total average weekly household expenditure (AWHE) for All Households was $910.63 at June 2005. Expenditures in the Housing group average at $109.66 on Other Housing (i.e., house ownership), $51.01 on Rental, and $30.31 on utilities per household per week across all households.

Comparing expenditures on Other Housing with Rental shows a 2.1 times greater expenditure on Other Housing. Comparing expenditures on Private Motoring with Urban Transport Fares shows a 17.0 times greater expenditure on Private Motoring.

Aged and Disability Support Pension households

The Aged and Disability Support Pensions household RPI baseline is 164.1, a difference of 0.0 points from the All Households index. Positive contributions to the points difference include 6.3 points for Food and 2.5 for Health indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.

The RPI Upper Limit has increased at a rate 27.4% greater than the CPI, and 31.0% greater than the Melbourne All Groups price index, since 1990, approximately 7% and 10% greater than the All Households RPI Upper Limit increase, respectively.

Comparing expenditures on Other Housing with Rental shows a lower ratio of average expenditures than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a higher ratio than All Households Australia.

Unemployment, education and sickness allowances households

The Unemployment, education and sickness allowances households RPI baseline is 163.4, a difference of ‐0.7 points from the All Households index. Positive contributions to the points difference are made in Housing, Alcohol and Tobacco, and Communications, indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.


Comparing expenditures on Other Housing with Rental shows a lower average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a lower ratio than All Households Australia.



Other Government Pensions and Allowances households

The Aged and Disability Support Pensions household RPI baseline is 163.4, a difference of ‐0.7 points from the All Households index. Positive contributions to the points difference include 6.4 points for Food and 1.9 and 1.7 for Housing and Household Furnishings, Supplies and Services respectively indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.

The RPI Upper Limit has increased at a rate 21.9% greater than the CPI, and 25.4.0% greater than the Melbourne All Groups price index, since 1990, approximately 2% and 5% greater than the All Households RPI Upper Limit increase, respectively.

Comparing expenditures on Other Housing with Rental shows a lower average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a higher ratio than All Households Australia.

One parent with two or more children

The One Parent with Two or More Children household RPI baseline is 161.8, a difference of ‐2.3 points from the All Households index. Positive contributions to the points difference include 3.5, 3.1, 2.9 and 2.0 points for Housing, Food, Education and Communication respectively indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.

The RPI Upper Limit has increased at a rate 18.5% greater than the CPI, and 21.9% greater than the Melbourne All Groups price index, since 1990, approximately 1% lower and 2% greater than the All Households RPI Upper Limit increase, respectively.

Comparing expenditures on Other Housing with Rental shows a lower average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a similar ratio than All Households Australia.

One parent with one child households

The One Parent With One Child household RPI baseline is 159.9, a difference of ‐4.2 points from the All Households index. Positive contributions to the points difference include 6.3 and 2.3 points for Housing and Communication respectively indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.

The RPI Upper Limit has increased at a rate 16.2% greater than the CPI, and 19.5% greater than the Melbourne All Groups price index, since 1990, approximately 4% lower than, and virtually no different from, the All Households RPI Upper Limit increase, respectively.

Comparing expenditures on Other Housing with Rental shows a lower average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a similar ratio to All Households Australia.

Couple with three or more children households

The Couple with Three or More Children household RPI baseline is 163.6, a difference of ‐0.6 points from the All Households index. Positive contributions to the points difference include 5.5 points for Education and 5.4 points for Housing indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.




Comparing expenditures on Other Housing with Rental shows a higher average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a higher ratio than All Households Australia.

Couple with one child households

The Couple with One Child household RPI baseline is 162.9, a difference of ‐1.2 points from the All Households index. Positive contributions to the points difference include 1.6 points for Financial and Insurance Services and 1.5 points for Household Furnishings, Supplies and Services, indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.


Comparing expenditures on Other Housing with Rental shows a higher average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a similar ratio to All Households Australia.

Lone person households

The Lone person household RPI baseline is 162.5, a difference of ‐1.7 points from the All Households index. Positive contributions to the points difference include 8.3 points for Housing and 2.0 points for Alcohol and Tobacco indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.


Comparing expenditures on Other Housing with Rental shows a lower average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a lower ratio than All Households Australia.

Couple Only households

The Couple Only household RPI baseline is 163.9, a difference of ‐0.2 points from the All Households index. None of the positive differences in points contributions per expenditure groups are very significant suggesting that there are no particular areas of relatively greater consumption and/or cost pressure for this household group as a whole.


Comparing expenditures on Other Housing with Rental shows a higher average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a marginally higher ratio than All Households Australia.

Wage and Salary households

The Wage and Salary household RPI baseline is 163.7, a difference of ‐0.4 points from the All Households index. Positive contributions to the points difference include 6.3 points for Food and 2.5 for Health indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.




Comparing expenditures on Other Housing with Rental shows a higher average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a marginally lower ratio than All Households Australia.

Superannuation or Other Private Income households

The Superannuation or Other Private Income household RPI baseline is 167.3, that is, 3.2 points greater than the All Households index. Positive contributions to the points difference include 7.0 points for Health, 3.5 points for Recreation, and 2.0 points for Household Furnishings, Supplies and Services, indicating areas of relatively greater consumption and/or cost pressure for this household group as a whole.


Comparing expenditures on Other Housing with Rental shows a higher average expenditure ratio than All Households Australia. Comparing expenditures on Private Motoring with Urban Transport Fares shows a higher ratio than All Households Australia.


Appendices Appendix 1


References

ABS 2005 (a), A Guide to the Consumer Price Index, 15th Series, ABS Catalogue No. 6440.0

ABS 2005 (b), Australian Consumer Price Index, Concepts, Sources and Methods 2005 (14th Series), ABS Catalogue No. 6461.0

ABS 2008, Consumer Price Index, Australia, Jun 2008: TABLE 13, CPI: Groups, Sub‐groups and Expenditure Class, Index Numbers by Capital City, ABS Catalogue No. 6401.0

ABS 2005 (c), Consumer Price Index: Concordance with Household Expenditure Classification, Australia, ABS Catalogue No.6446.0.55.001

ABS 2005 (d), Introduction of the 15th Series Australian Consumer Price Index 2005 (Reissue), ABS Catalogue No. 6462.0

ABS 2006 (a), Household Income and Expenditure Survey 2003‐04: Detailed expenditure items by government pensions and allowances, Australia

ABS 2006 (b), Household Income and Expenditure Survey 2003‐04: Detailed expenditure items by household composition, Australia

ABS 2006 (c), Household Income and Expenditure Survey 2003‐04: Detailed expenditure items by principal source of current household income, Australia

ABS 2005 (e), Household Expenditure Survey Australia 2003‐0 4: Summary of Results, ABS Catalogue No. 6530.0

Metcard fares, http://www.metlinkmelbourne.com.au/fares_tickets/metropolitan_fares_and_tickets/metcard_fares

Report on Ministerial Portfolios, May 1999, Public transport fare evasion and revenue protection http://archive.audit.vic.gov.au/old/mp99/mp99infr.htm

Data Sources

CPI

ABS 6401.0, Consumer Price Index, Australia, Jun 2008 TABLE 13. CPI: Groups, Sub‐groups and Expenditure Class, Index Numbers by Capital City 640109.xls http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6401.0Jun%202008?OpenDocument

ABS 6456.0 Introduction of the 14th Series Australian Consumer Price Index: Information Paper, 2000 64560_2000.pdf

HES

6530.0 ‐ Household Expenditure Survey, Australia: Summary of Results, 2003‐04 http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6530.02003‐04%20(Reissue)?OpenDocument

6535.0 ‐ Household Expenditure Survey, Australia: Detailed Expenditure Items, 1998‐99 Previous ISSUE Detailed HES 1998‐1999.pdf http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6535.01998‐99?OpenDocument

ABS 6530.0 Household Expenditure Survey Australia: Summary of Results, 1993‐94 65300_1993‐94.pdf

References Melbourne, September 2008 98

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6401.0Jun%202008?OpenDocument

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6530.02003-04%20(Reissue)?OpenDocument

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6535.01998-99?OpenDocument


6446.0.55.001 Consumer Price Index: Concordance with Household Expenditure Classification, Australia 6446055001sept05.xls http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6446.0.55.001Sep%202005?OpenDocument

Detailed expenditure items by government pensions and allowances UR20061010 Gavin Dufty ‐ St Vincent de Paul ‐ detailed by govt pensions.xls

Detailed expenditure items by household composition 2003‐04 Gavin Dufty ‐ SVDP ‐ det exp by household composition ‐ Update.xls

Detailed expenditure items by principal source of current household income 2003‐04 Gavin Dufty ‐ SVDP ‐ det exp by income ‐ Update.xls

Concordance

ABS 6446.0.55.001, Consumer Price Index: Concordance with Household Expenditure Classification, Australia Concordance between the Household Expenditure Classification (HEC) and 15th Series CPI Expenditure Classes 6446055001sept05.xls

CPI Weighting

ABS 6430.0, Consumer Price Index 15th Series Weighting Pattern Table 1. Percentage Contribution to All Groups CPI, June Quarter 2005, Eight Capital Cities Table 2. Points Contribution to All Groups CPI, June Quarter 2005, Eight Capital Cities Table 3. Points Contribution to All Groups CPI, 14th and 15th Series CPI, Eight Capital Cities 6430.0 15th series weighting pattern.xls

ABS 6456.0 Information Paper, Introduction of the 14th Series Australian Consumer Price Index 2000 APPENDIX 1 WEIGHTING PATTERNS FOR 13th AND 14th SERIES CPI AT JUNE QUARTER 2000 A1.1 WEIGHTING PATTERN, 13TH SERIES CPI, JUNE QUARTER 2000, EIGHT CAPITAL CITIES(a) 64560_2000.pdf

ABS 6461.0 Australian Consumer Price Index: Concepts, Sources and Methods, 2005 Summary Appendix 1: Weighting pattern for the CPI ‐ June quarter 2000 http://abs.gov.au/ausstats/[email protected]/66f306f503e529a5ca25697e0017661f/db7a365fa6856480ca25705f001ecafe!OpenDocument

ABS 6461.0 CPI Concepts Sources and Methods 2003 64610_2003.pdf

ABS 6454.0 Information Paper, Introduction of the 13th Series Australian Consumer Price Index 1998 APPENDIX 1 WEIGHTING PATTERNS FOR 12TH AND 13TH SERIES CPI AT JUNE QUARTER 1998 A1.1 WEIGHTING PATTERN, 12TH SERIES CPI, JUNE QUARTER 1998, EIGHT CAPITAL CITIES 6454.0_1998.pdf

ABS 640 1 .0 Consumer Price Index, CPI December Quarter 1993 64010_1293.pdf

ABS 640 1 .0 Consumer Price Index, CPI June Quarter 1995, Table 7 64010_0695.pdf

ABS 640 1 .0 Consumer Price Index, CPI September Quarter 1995 64010_0995.pdf

ABS 640 1 .0 Consumer Price Index, CPI June Quarter 2000 64010_jun_2000.pdf

ABS 640 1 .0 Consumer Price Index, CPI September Quarter 2000 64010_sep_2000.pdf

Data Sources Melbourne, September 2008 99

http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6446.0.55.001Sep%202005?OpenDocument

http://abs.gov.au/ausstats/[email protected]/66f306f503e529a5ca25697e0017661f/db7a365fa6856480ca25705f001ecafe!OpenDocument

http://abs.gov.au/ausstats/[email protected]/66f306f503e529a5ca25697e0017661f/db7a365fa6856480ca25705f001ecafe!OpenDocument


ABS, Consumer Price Index 640 1 .0 , June Quarter 2005 64010_jun_2005.pdf

ABS, Consumer Price Index 640 1 .0 , September Quarter 2005 64010_sep_2005.pdf

Appendix 2

Tables for reference

2003-04 Headers 1998-99 Headers Pre1998 SVDP WeightingsCouple only Couple only Couple no childrenCouple with one dependent child only Couple with one dependent child only Couple with one childCouple with two dependent children only Couple with two dependent children only Couple with two childrenCouple with three or more dependent children only

Couple with three or more dependent children only Couple with three or more children

Lone person household Lone person household Lone personOne parent, one family households with one dependent child only

One parent, one family households with one dependent child only Lone parent one child

One parent, one family households with two dependent child only

One parent, one family households with two or more dependent children Lone person two children or more

One parent, one family households with three or more dependent children only [Blank] [Blank]

Other All other household types [Blank]All households All households [All Households]Age/disability pension Age and disability support pensions Aged/Disability PensionerUnemployment/ sickness/ education allowance

Unemployment, education and sickness allowances

Unemployment benefits

Other Other government pensions and allowances Other government pensions and allowances

[Total government pensions and allowances] [Employees Wages and salaries] [Blank]

[Other principal source of income] [Own business, interest or rent, etc.] [Blank][Blank] [Superannuation or other private income] [Blank]All households All households [All Households]Wage and salary Employees Wages and salaries [Blank]Own unincorporated business income Own business, interest or rent, etc. [Blank]Other income Superannuation or other private income [Blank]

[Government pensions and allowances] [Unemployment, education and sickness allowances] [Blank]

[Household has zero or negative income] [Age and disability support pensions] [Blank]

[Blank] [Other government pensions and allowances]

[Blank]

All households All households [Blank]

Household Group Selection Grid

• Table 118: Household Group Selection details

Tables for reference Melbourne, September 2008 100


Metcard fareshttp://www.metlinkmelbourne.com.au/fares_tickets/metropolitan_fares_and_tickets/metcard_fares

Metcard fares: effective until 31 December 2008Zone 1 Zone 2 Zone 1+2 Value Metcard option

Full fare $3.50 $2.70 $5.50

Concession $2.20 $1.60 $3.10Full fare $6.50 $4.60 $10.10





Concession $52.20 $35.00 $80.50Full fare $1,117 $748 $1,722

(concession not available)

- - -

Other Metcard products: effective until 31 December 2008Full Fare Concession Value Metcard

optionCity Saver

(within City Saver area)

City Saver x 10

(within City Saver area)

Off Peak Daily

(Zones 1 + 2)Seniors Daily

(Zones 1 + 2)5 x Seniors Daily

(Zones 1 + 2)Sunday Saver

(Zones 1 + 2)5 x Weekend Daily

(Zones 1 + 2)10 x Early Bird

(Zones 1 + 2) Group Traveller

(Zones 1 + 2)

Student Concessions

More information about student concessions

2008 Primary/Secondary/Tertiary Student Concession Card

$8.80

2008 Half Yearly Tertiary Student Concession Card

$8.80

2008 Yearly Student Pass

2008 Half-Yearly Student Pass

Resident of Zone 1 $391 $203.20Resident of Zone 2(including Bacchus Marsh)

2 hour10 x 2 hour

Daily5 x Daily

10 x 2 hour -

5 x Daily -

Weekly -

Monthly -

Yearly -

$2.60 $1.50 City Saver x 10

$20.80 $10.40 -

$9.50 $4.75 -

- $3.30 -

- $16.50 -

$2.90 - 5 x Weekend Daily

$14.50 - -

- - -

- $27.20 -

$391 $203.20

Holders of Victorian Public Transport Student Concession Cards are eligible for concession fares when travelling on public transport. Student Concession Cards are available for eligible primary, secondary and tertiary students.

Primary and Secondary Student Concession Card holders are also eligible to purchase Yearly and Half Yearly Student Passes.

• Table 119: Melbourne Metcard fares

Tables for reference Melbourne, September 2008 101


Selected ABS Definitions and Explanations

The Relative Importance of CPI Items

The overall (or All groups) CPI provides a measure of the average rate of price change. In calculating an average measure of this type it is necessary to recognise that some items are more important than others. Price changes for the more important items should have a greater influence on the average than price changes for less important items. For example, if household expenditure on bread is three times as large as expenditure on cheese, then a 10% price increase for bread should have a similar impact on the CPI as a 30% price increase for cheese.18

To whom does the CPI relate?

The Australian CPI is designed to measure changes in retail prices experienced by all metropolitan private households in aggregate. The CPI basket and its weights relate to this population as a whole. The index becomes much less representative at successively lower levels of aggregation of this population. Ultimately, the composition and weighting pattern of the basket will not coincide with that of any individual household in Australia. There are several reasons for this.

First, the basket represents the average expenditure of all households, rather than the expenditure of the average household. Individual households may have significantly higher or lower expenditure on particular items than the average would suggest.

Second, the CPI does not measure changes in living costs that may be experienced by individual households as a direct consequence of their progression through the life cycle. For example, younger households may incur a higher proportion of their expenditure on housing and child care, while those households in the older age groups may incur increasing expenditure on medical services. However, changes in the demographic make‐up of households does affect the pattern of total household expenditure recorded in the HES and is thus incorporated in the CPI weights during reviews.

Third, the CPI basket includes items that are mutually exclusive for individual households. For example, both the rent payments of renter households, and the amounts paid by owner‐occupier households for purchasing their principal residence are in the basket. No single household will incur both these expenses on their principal residence at the same time.

Last, although the Australian CPI coverage is extremely broad, it excludes certain households, such as hotels, university residences, and jails, due to the significant differences in their consumption patterns. Individuals in such households may find that the CPI is unrepresentative of their price experiences.19

Using the 14th Series CPI

In determining uses for the CPI, close examination of the principal purpose, conceptual approach, basket and population coverage is the starting point. Knowledge of its construction methodology is also valuable in providing insights into its relevance to the purpose at hand. This manual provides details of each of these aspects in Chapters 3, 4, 5 and 7.

Selected ABS Definitions and Explanations Melbourne, September 2008 102

Appendix 2

To begin with, the principal purpose of the CPI forms the basis on which the index is developed. This purpose should broadly bear some similarity with the use being considered. In the Australian CPI, where measuring price inflation is the principal purpose, users who require cost of living or purchasing power type measures should be extremely careful in adopting the index. These purposes may best be met through the use of carefully selected components of the CPI, special series developed by the ABS from low level price data, or the use of other price indexes such as the producer price index (PPI) series.

The conceptual approach behind the index may be incompatible with the use being contemplated. To meet the principal purpose outlined earlier, the Australian CPI is constructed on an acquisitions basis, and as such, will only include those items that are acquired by the reference population in the base period. All other types of payments and purchases that do not involve the consumers’ acquisition of a good or service are excluded from the basket. This includes a portion of the interest charges incurred through any credit arrangements, any payments made on goods or services acquired in earlier periods, and the effects of certain subsidies and taxes.

The item and population coverage of the CPI, which is determined largely by the principal purpose and conceptual approach, are equally important to the use of the index in several respects. The population coverage defines a subset of the population to which the CPI directly relates.

The consumption pattern of this population helps to provide the index with its item coverage (basket), and the relative importance (weights) of items within this basket. Should the use to which the CPI is being put entail a different population coverage, then the user must make the bold assumption that both groups have very similar consumption patterns and price experiences.

For example, using the All groups Australian CPI in applications relating to the age pensioner sub‐population implicitly assumes that age pensioners make roughly the same types of purchases, and in the same proportions, as all Australian consumer households on average.

Furthermore, there is the assumption that the price changes that age pensioners face are the same as those experienced by all other households, on average. Both these assumptions can be seen to be somewhat tenuous.

The ABS produces a set of annual price indexes, on an outlays basis, for four population subgroups to minimise the impact of these assumptions to the extent possible. These indexes are published annually in Australian Economic Indicators (cat. no. 1350.0). The four population subgroups for which the indexes are produced are

• employees

• age pensioners

• self‐funded retirees

20 • other government transfer payment recipients.

Selected ABS Definitions and Explanations Melbourne, September 2008 103

Endnotes Appendix 2

Melbourne, September 2008 104

Endnotes

1 ABS 2005 (a), p.3 2 Ibid, p.1 3 ABS 2005 (b), p.47 4 Ibid, p.53 5 ABS 2005 (c) 6 ABS 2005 (d), p. 5 7 ABS 2005 (b), p. 46 8 Ibid, p.47 9 ABS 2005 (e), p. 37 10 Ibid, p. 42 11 ABS 2005 (b), p. 123 12 Ibid. 13 ABS 2006 (a) 14 ABS 2006 (b) 15 ABS 2006 (c) 16 ABS 2005 (b), p. 123 17 ABS 2008 18 ABS 2005 (a), p. 7 19 ABS 2005 (b), p. 123 20 Ibid, p. 122

20September%20-%20RPI%20Report

Documents

various household types

income groups melbourne

relative price index

st vincent