http://vinnies.org.au/files/VIC/SocialJustice/Reports/2008/2008%20September%20-%20RPI%20Report by St Vincent de Paul Society Australia

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

St Vincent de Paul Society

St Vincent de Paul Society Victoria Inc. Policy and Research Unit Locked Box 4800 Box Hill Vic 3128

Phone +61 03 9895 5816 Mobile +61 0439 357 129 Fax +61 03 9895 5850 gavind@svdp‐vic.org.au www.vinnies.org.au/vic

Data analysis, processing and reporting: Ian Macmillan Transditch Research and Policy Support 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

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

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

• 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

• 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

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

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

Methodology

The Consumer Price index

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: CPI Groups (goods and services) Number CPI Group 1

Food

2 3

Alcohol and tobacco Clothing and footwear

4 5

Housing Household contents and services

6 7 8

Health Transportation Communication

9 10

Recreation Education

Financial and insurance 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.

Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

CPI Subgroups relevant to RPI methods 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. Transportation 7.1 Private motoring 7.2 Urban transport fares 11. Financial and insurance services 11.1 Financial services 11.2 Insurance Services

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

CPI Subgroups and selected Classes Number CPI Subgroups

CPI Classes

1. Food Dairy and related products Bread and cereal products Meat and seafoods Fruit and vegetables Non-alcoholic drinks and snack food Meals out and takeaway foods Other food Eggs Jams, honey and sandwich spreads Tea, coffee and food drinks Food additives & condiments Fats 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' clothing Footwear

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

Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

4. Housing Rents Utilities Electricity Gas and other household fuels Water and sewerage Other housing House purchase Property rates and charges House repairs and maintenance 5. Household contents and services Furniture and furnishings Household appliances utensils and tools Household Supplies Childcare Hairdressing and personal care services Other household services Household Services Household cleaning agents Toiletries and personal care products Other Household Supplies 6. Health Health services Hospital and medical services Optical services Dental services Pharmaceuticals 7. Transportation Private motoring Motor vehicles Automotive fuel Motor vehicle repair and servicing Motor vehicle parts and accessories Other motoring charges Urban transport fares Urban transport fares 8. Communication Communication Postal Telecommunication 9. Recreation Audio, visual and computing Books, newspapers and magazines Sport and other recreation Holiday travel and accommodation 10. Education Education Preschool and primary education Secondary education Tertiary education 11. Financial and insurance services Financial services Deposit and Loan Facilities Other Financial Services Insurance services Insurance services

â&#x20AC;˘ Table 3: CPI Subgroups and Classes for general analysis (continued)

Â Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

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 concordance 5 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. HES classification groups Number Goods and Services 1

Current housing costs

2 3

Domestic fuel and power Food and non-alcoholic beverages

4 5

Alcoholic beverages Tobacco products

6 7 8

Clothing and footwear Household furnishings and equipment Household services and operation

9 10

Medical care and health expenses Transport

11 12

Recreation Personal care

Miscellaneous goods and services

• Table 4: HES classification groups

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

Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

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 Weight Constants, CPI Groups, Australia

Financial and insurance services Australia , 12.8%

Food Australia , 13.5%

Education Australia , 1.5%

Alcohol and tobacco Australia , 4.1% Clothing and footwear Australia , 4.9%

Recreation Australia , 12.2%

Communication Australia , 4.1% Housing Australia , 21.0% Transportation Australia , 12.1% Health Australia , 3.0%

Household contents and services Australia , 10.9%

• Figure 1: Weight Constants – normalised CPI basket weights

Weight Constants, CPI Groups, Australia Group and Region

Food Australia

Alcohol and tobacco Australia

ABS Bakset Weight Constants, All Household Groups

Normalised CPI Percentage Variance, Basket Weights, All contribution to the weight to Household Groups All groups CPI contribution

14.7%

13.5%

15.4%

14.0%

4.4%

4.1%

6.8%

66.4% -19.6%

Clothing and footwear Australia

5.3%

4.9%

3.9%

Housing Australia

22.7%

21.0%

19.5%

-6.9%

Household contents and services Australia

11.8%

10.9%

9.6%

-11.5%

Health Australia

Transportation Australia

Communication Australia

Recreation Australia

3.3%

3.0%

4.7%

54.3%

13.1%

12.1%

13.1%

8.6% -19.4%

4.4%

4.1%

3.3%

13.2%

12.2%

11.6%

-5.1%

1.7%

1.5%

2.7%

79.1%

13.8% 108.3%

12.8% 100.0%

9.3% 100.0%

-27.0% -

10 Education Australia 11 Financial and insurance services Australia Total

• Table 5: Weight Constants and percentage points contributions

Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

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. Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

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.

Concepts

Melbourne, September 2008

Methodology

The Consumer Price index

Comparison of selected Group price indexes and the CPI Two group price indexes with wider deviation from the Consumer Price Index (CPI) 300 280

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

260 240 Education Australia , Jun2008, 282.6

220 Index 200

All groups Australia , Jun2008, 164.6

180 160 140

Communication Australia , Jun-2008, 111.2

120 100

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 3 M

ar -0 2 M

ar -0 1 M

ar -0 0 M

ar -9 9 M

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 4 M

ar -9 3 M

ar -9 2 M

ar -9 0

ar -9 1

Quarter

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

Two group price indexes with less deviation from the Consumer Price Index (CPI) 280

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

260

240

Food Australia , Jun2008, 179.5

220 All groups Australia , Jun2008, 164.6

200 Index 180

160

140

120

Housing Australia , Jun2008, 143.4

100

M ar -1 0

M ar -0 9

M ar -0 8

M ar -0 7

M ar -0 6

M ar -0 5

M ar -0 4

M ar -0 3

M ar -0 2

M ar -0 1

M ar -0 0

M ar -9 9

M ar -9 8

M ar -9 7

M ar -9 6

M ar -9 5

M ar -9 4

M ar -9 3

M ar -9 2

M ar -9 1

M ar -9 0

Quarter

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

Concepts

Melbourne, September 2008

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 Allowances 13 , Family Composition of Household 14 , and Principal Household Income Sources 15 . 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. Points difference between RPI baseline and CPI Period

To Quarter

Since 1990 11th to 13th Series 14th Series 15th Series

Jun-2008 Mar-2000 Mar-2005 Jun-2008

Greatest points difference, RPI baseline to CPI, positive 0.3 0.3 0.1 0.1

Greatest points difference, RPI baseline to CPI, negative -0.5 -0.5 -0.4 0.0

• Table 6: Summary comparison of RPI baseline and CPI

Concepts

Melbourne, September 2008

Methodology

The Relative Price Index

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 180 RPI, All households, Australia, including basket size increases, Jun-2008, 176.9

CPI, Australia , Jun-2008, 164.6

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

160

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

140

15th Series starts

120 GST inclusion starts 14th Series starts

-1 0

ar M

ar -0 M

-0 8

ar M

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12th Series starts

100

13th Series starts

12th weight @ 1995

Quarter

• 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

Methodology

The Relative Price Index

Weight Constants, CPI Subgroups for RPI methods, Australia Variance, Percentage Normalised CPI weight to Basket Weights, All contribution to the contribution All groups CPI Household Groups

ABS Bakset Weight Constants, All Household Groups

Group and Region

4.1 Rents Australia

6.1%

4.2 Utilities Australia

5.6%

5.2%

-6.8% -6.9%

3.6%

3.3%

3.1%

13.0% 22.7%

12.0% 21.0%

11.2% 19.5%

7.1 Private motoring Australia

12.4%

11.4%

12.4%

7.2 Urban transport fares Australia Total

0.7% 13.1%

0.7% 12.1%

0.7% 13.1%

4.3 Other Housing Australia

-6.9% 8.5% 8.9% -

• 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 excluding Utilities: approximate proportions of Households per subgroup Housing subgroups, excluding the Utilities subgroup

Owner-occupier

All household types (number)

5,027

All household types (percentage) Approximate average expenditure

73.0% $

Total, Ratio, Ownerexcluding occupier to Rental Utilities

Rental

132.68 $

1,856

6,883

2.71

27.0%

100.0%

2.71

172.82 $ 143.50

0.77

• 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 Specific consumption patterns

Melbourne, September 2008

Methodology

The Relative Price Index

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: very approximate proportions of Households per subgroup Transportation subgroups

Private Motoring, some with Urban Transport Fares

Urban Transport Fares only

Total

Ratio, Private Urban Transport Motoring to Urban Fares and Private Transport Fares 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

• Table 9: Proportions of Households in Transportation subgroups

From Table 9, Private Motoring households represent approximately 90% of Transportation or 9.3 times the estimated 10% of households using only Urban Transport Fares. In expenditure terms, the Private 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 current data sets. The best that can 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 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 Fares weighting per household group, according to the relative proportion of households using Urban Transport Fares only per group.

Specific consumption patterns

Melbourne, September 2008

Methodology

The Relative Price Index

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 Over the period since 1990, the 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 same period, Melbourne’s price index for All Groups Excluding Financial and Insurance Services rose at 12.4% above Melbourne’s All Groups rate. CPI and Melbourne’s All Groups price change table Price Indexes

Quarter

Jun-2008 Price Index, Mar-2008 all household types Jun-2007 Mar-1990 In last quarter Points increase Previous 12 months Since 1990 In last quarter Percent increase Previous 12 months Since 1990 Difference from CPI In last quarter Melbourne percent Previous 12 months increase Since 1990 Percent greater than In last quarter CPI Melbourne Previous 12 months increase Since 1990

All groups Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9%

All groups Melbourne

All groups Excluding Financial and insurance services Melbourne

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

170 168.4 163.7 100.6 1.6 6.3 69.4 1.0% 3.8% 69.0% -0.2% -0.6% 7.6% -19.7% -13.2% 12.4%

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

Long-term CPI changes

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

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. Weight Constants ordered by weight, CPI Groups, Australia Order by weight, Group

ABS Bakset Weight Constants, All Household Groups

Variance, Percentage Normalised CPI weight to Basket Weights, All contribution to the contribution All groups CPI Household Groups

Housing

22.7%

21.0%

19.5%

-6.9%

Food

14.7%

13.5%

15.4%

14.0%

Financial and insurance services

13.8%

12.8%

9.3%

-27.0%

Recreation

13.2%

12.2%

11.6%

-5.1%

Transportation

13.1%

12.1%

13.1%

8.6%

Household contents and services

11.8%

10.9%

9.6%

-11.5%

Clothing and footwear

5.3%

4.9%

3.9%

-19.6%

Communication

4.4%

4.1%

3.3%

-19.4%

Alcohol and tobacco

4.4%

4.1%

6.8%

66.4%

3.3%

3.0%

4.7%

54.3%

1.7% 108.3%

1.5% 100.0%

2.7% 100.0%

79.1% -

10 Health 11 Education Total

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

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Food prices The Food group and it's fresh-food subgroups Comparison of price changes 220

Dairy and related products Melbourne , Jun-2008, 208.0

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.

200

180

Bread and cereal products Melbourne , Jun-2008, 201.3

Fruit and vegetables Melbourne , Jun-2008, 169.5

Index 160

Meat and seafoods Melbourne , Jun-2008, 146.8

140

120

Food Melbourne , Jun-2008, 177.6

100

All groups Australia , Jun2008, 164.6

0 M

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3 ar -9 M

ar -9

1 ar -9 M

ar -9

Quarter

• Figure 5: Food – fresh food price change comparison

The Food group and it's three non-fresh-food subgroups Comparison of price changes 220

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.

200

180

Meals out and take away foods Melbourne , Jun2008, 183.5 Non-alcoholic drinks and snack food Melbourne , Jun-2008, 181.2

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..

Index 160

140

Other food Melbourne , Jun-2008, 160.6

Food Melbourne , Jun2008, 177.6

120

All groups Australia , Jun2008, 164.6 100

0 ar -1

9 M

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

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Food price change tables Group, Subgroup or Class

Quarter

Dairy and related products

Food

177.6 177.4 171.8 98.6 0.2 5.8 79 0.1% 3.4% 80.1% -1.1% -1.1% 18.8% -90.5% -23.9% 30.6%

208 202.7 186.8 101.7 5.3 21.2 106.3 2.6% 11.3% 104.5% 1.4% 6.9% 43.2% 121.0% 155.9% 70.3%

Bread and cereal products

201.3 201.5 191.9 100.9 -0.2 9.4 100.4 -0.1% 4.9% 99.5% -1.3% 0.5% 38.1% -108.4% 10.5% 62.1%

Meat and seafoods

Fruit and vegetables

146.8 147.1 143.3 100 -0.3 3.5 46.8 -0.2% 2.4% 46.8% -1.4% -2.0% -14.6% -117.2% -44.9% -23.7%

169.5 177.2 178.4 83.6 -7.7 -8.9 85.9 -4.3% -5.0% 102.8% -5.5% -9.4% 41.4% -467.3% -212.5% 67.4%

• Table 12: Food – fresh-food price change analysis

Group, Subgroup or Class

Quarter

Food (continued)

Non-alcoholic drinks and snack food

177.6 177.4 171.8 98.6 0.2 5.8 79 0.1% 3.4% 80.1% -1.1% -1.1% 18.8% -90.5% -23.9% 30.6%

181.2 180.1 174.7 101.2 1.1 6.5 80 0.6% 3.7% 79.1% -0.6% -0.7% 17.7% -48.4% -16.1% 28.8%

Meals out and take away foods

183.5 181.5 174.4 100.6 2 9.1 82.9 1.1% 5.2% 82.4% -0.1% 0.8% 21.0% -6.9% 17.7% 34.3%

Other food

160.6 157.3 154.2 100.7 3.3 6.4 59.9 2.1% 4.2% 59.5% 0.9% -0.3% -1.9% 77.3% -6.4% -3.1%

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Alcohol and Tobacco prices The Alcohol and Tobacco group Comparison of price changes 500

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

450

Tobacco Melbourne , Jun2008, 458.0

400

Index 350 Alcohol and tobacco Melbourne , Jun-2008, 259.1

300

250 Alcoholic drinks Melbourne , Jun-2008, 185.5

200

150

M ar -1

M ar -0

M ar -9

100

All groups Australia , Jun2008, 164.6

Quarter

• Figure 7: Alcohol and Tobacco price change comparison

The Alcohol subgroup and classes Comparison of price changes 220 Beer Melbourne , Jun2008, 212.4

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

200

Spirits Melbourne , Jun2008, 189.0

180 Index

Wine Melbourne , Jun2008, 150.5

160

140 Alcoholic drinks Melbourne , Jun-2008, 185.5 120

All groups Australia , Jun2008, 164.6

0 M ar -1

M ar -0

M ar -9

100

Quarter

• Figure 8: Alcohol subgroups price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Alcohol and Tobacco price change table Group, Subgroup or Class

Quarter

Alcohol and tobacco

259.1 254.2 244.6 101.3 4.9 14.5 157.8 1.9% 5.9% 155.8% 0.7% 1.5% 94.4% 62.9% 33.7% 153.8%

Beer

212.4 212.3 197.4 101.4 0.1 15 111 0.0% 7.6% 109.5% -1.1% 3.2% 48.1% -96.0% 71.4% 78.4%

Wine

150.5 146.8 143.2 100.4 3.7 7.3 50.1 2.5% 5.1% 49.9% 1.3% 0.7% -11.5% 113.0% 15.0% -18.7%

Spirits

Tobacco

189 179.8 174.2 100.9 9.2 14.8 88.1 5.1% 8.5% 87.3% 3.9% 4.1% 25.9% 332.5% 91.6% 42.3%

458 449.9 439.2 101.7 8.1 18.8 356.3 1.8% 4.3% 350.3% 0.6% -0.2% 289.0% 52.2% -3.5% 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Clothing and Footwear prices The Clothing and Footwear group and it's adult clothing subgroups Comparison of price changes 200

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

180

Women's clothing Melbourne , Jun-2008, 108.1

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

160 Index

Men's clothing Melbourne , Jun-2008, 112.2

140

All groups Australia , Jun2008, 164.6

120

Clothing and footwear Melbourne , Jun-2008, 110.3

100

M ar -1

M ar -0

M ar -9

Quarter

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

The Clothing and Footwear group and the Child Clothing and Footwear subgroups Comparison of price changes 200

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

180

All groups Australia , Jun2008, 164.6 Children's and infants' clothing Melbourne , Jun2008, 118.2

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

160 Index

140

Clothing and footwear Melbourne , Jun-2008, 110.3

120

100

Footwear Melbourne , Jun2008, 101.9 0 ar -1 M

ar -0

8 M

ar -0 M

ar -0

6 M

ar -0 M

ar -0

4 M

ar -0 M

ar -0

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9 M

ar -9 M

ar -9

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ar -9

5 M

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ar -9

3 M

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ar -9

1 M

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

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Clothing and Footwear price change table Group, Subgroup or Class

Quarter

Clothing and footwear

110.3 106.7 112 100.1 3.6 -1.7 10.2 3.4% -1.5% 10.2% 2.2% -6.0% -51.2% 185.2% -134.2% -83.4%

Men's clothing

112.2 107.8 112.1 99.9 4.4 0.1 12.3 4.1% 0.1% 12.3% 2.9% -4.3% -49.1% 245.0% -98.0% -79.9%

Women's clothing

108.1 107.1 109.3 100.4 1 -1.2 7.7 0.9% -1.1% 7.7% -0.2% -5.5% -53.7% -21.1% -124.8% -87.5%

Children's and infants' clothing

118.2 115 122 98.1 3.2 -3.8 20.1 2.8% -3.1% 20.5% 1.6% -7.5% -40.9% 135.2% -170.2% -66.6%

Footwear

101.9 94.8 106.1 100.2 7.1 -4.2 1.7 7.5% -4.0% 1.7% 6.3% -8.4% -59.7% 533.1% -189.3% -97.2%

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Housing prices The Housing group and subgroups Comparison of price indexes 190 Utilities Melbourne , Jun2008, 186.6

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.

170

Rents Melbourne , Jun2008, 159.9 Other Housing Melbourne , Jun-2008, 118.3

150 Index 130

110

All groups Melbourne , Jun2008, 162.5

Housing Melbourne , Jun2008, 126.4

ar -1 0 M

ar -0 9

ar -0 8 M

ar -0 7 M

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ar -0 0

ar -9 9 M

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 4 M

ar -9 3 M

ar -9 2 M

ar -9 1 M

ar -9 0

Quarter

• Figure 11: Housing group price change comparison

The Other Housing subgroup and classes Comparison of price indexes and commencement dates 200 Property rates and charges Melbourne , Jun2008, 192.2

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).

180

House repairs and maintenance Melbourne , Jun-2008, 169.5

160

House Purchase Melbourne , Jun-2008, 154.4 140 Index

120

100 All groups Melbourne , Jun2008, 162.5 80 Other Housing Melbourne , Jun-2008, 118.3

0 M

ar -1

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• Figure 12: Other Housing subgroup price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Housing price change tables Group, Subgroup or Class

Quarter

Housing

126.4 125.9 119.2 101.2 0.5 7.2 25.2 0.4% 6.0% 24.9% -0.8% 1.6% -36.5% -66.4% 36.2% -59.4%

Rents

Utilities

159.9 157.1 150.6 101.1 2.8 9.3 58.8 1.8% 6.2% 58.2% 0.6% 1.7% -3.2% 50.7% 39.3% -5.2%

Other Housing

186.6 188.7 169.9 100.6 -2.1 16.7 86 -1.1% 9.8% 85.5% -2.3% 5.4% 24.1% -194.1% 121.7% 39.3%

118.3 117.9 112.9 101.3 0.4 5.4 17 0.3% 4.8% 16.8% -0.8% 0.3% -44.6% -71.3% 7.9% -72.7%

• Table 16: Housing group price change analysis

Group, Subgroup or Class

Quarter

Housing

126.4 125.9 119.2 101.2 0.5 7.2 25.2 0.4% 6.0% 24.9% -0.8% 1.6% -36.5% -66.4% 36.2% -59.4%

Other Housing

118.3 117.9 112.9 101.3 0.4 5.4 17 0.3% 4.8% 16.8% -0.8% 0.3% -44.6% -71.3% 7.9% -72.7%

House Purchase

154.4 153.9 146.9 0 0.5 7.5 154.4 0.3% 5.1% #DIV/0! -0.9% 0.7% #DIV/0! -72.5% 15.1% #DIV/0!

Property rates House repairs and and charges maintenance

192.2 192.2 181.2 0 0 11 192.2 0.0% 6.1% #DIV/0! -1.2% 1.6% #DIV/0! -100.0% 36.9% #DIV/0!

169.5 168.5 165.1 99.8 1 4.4 69.7 0.6% 2.7% 69.8% -0.6% -1.8% 8.5% -49.8% -39.9% 13.8%

• 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). Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Housing prices – Utilities Housing group, Utilities subgroup classes Comparison of price changes 200 Gas and other household fuels Melbourne , Jun2008, 193.7

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

180

Electricity Melbourne , Jun2008, 181.6

160 Water and sewerage Melbourne , Jun-2008, 139.9

Index 140

120

Utilities Melbourne , Jun2008, 186.6 All groups Melbourne , Jun2008, 162.5

100 Jun-1998

Jun-2001

Housing Melbourne , Jun2008, 126.4 0 ar -1

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• Figure 13: Housing – Utilities subgroup price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Housing – Utilities price change table Group, Subgroup or Class

Quarter

Housing

126.4 125.9 119.2 101.2 0.5 7.2 25.2 0.4% 6.0% 24.9% -0.8% 1.6% -36.5% -66.4% 36.2% -59.4%

Utilities

186.6 188.7 169.9 100.6 -2.1 16.7 86 -1.1% 9.8% 85.5% -2.3% 5.4% 24.1% -194.1% 121.7% 39.3%

Electricity

181.6 186.7 157.2 100.6 -5.1 24.4 81 -2.7% 15.5% 80.5% -3.9% 11.1% 19.1% -330.9% 250.0% 31.2%

Gas and other household fuels

193.7 192.9 182.2 100.7 0.8 11.5 93 0.4% 6.3% 92.4% -0.8% 1.9% 31.0% -64.9% 42.3% 50.5%

Water and sewerage

139.9 139.9 133 #N/A 0 6.9 #N/A 0.0% 5.2% #N/A -1.2% 0.8% #N/A -100.0% 17.0% #N/A

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Household Contents and Services The Household Contents and Services group and subgroups Comparison of price changes 220

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

200

Household Services Melbourne , Jun-2008, 187.9

Furniture and furnishings Melbourne , Jun-2008, 130.7

180 Household appliances, utensils and tools Melbourne , Jun-2008, 101.4

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

Index 160

All groups Australia , Jun2008, 164.6

140

120

Household contents and services Melbourne , Jun2008, 125.6

100

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• Figure 14: Household Contents and Services price change comparison

The Household Services subgroup and classes Comparison of price changes 340

Child care Melbourne , Jun-2008, 224.9

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

320 300 280

Other household services Melbourne , Jun-2008, 196.4

260 Hairdressing and personal care services Melbourne , Jun-2008, 183.2

240 Index 220 200 180 160 140

Household Services Melbourne , Jun-2008, 187.9

120

All groups Australia , Jun2008, 164.6

100

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• Figure 15: Household Services price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Household Contents and Services price change tables Group, Subgroup or Class

Quarter

Household contents and services

Furniture and furnishings

125.6 124.1 126.3 100.9 1.5 -0.7 24.7 1.2% -0.6% 24.5% 0.0% -5.0% -36.9% 2.2% -112.5% -60.1%

Household appliances, utensils and tools

130.7 128.6 131.9 101.7 2.1 -1.2 29 1.6% -0.9% 28.5% 0.4% -5.3% -32.9% 38.0% -120.5% -53.5%

101.4 100.1 100.7 100.6 1.3 0.7 0.8 1.3% 0.7% 0.8% 0.1% -3.7% -60.6% 9.8% -84.3% -98.7%

Household Services

Household Supplies

187.9 187.1 197.6 99.8 0.8 -9.7 88.1 0.4% -4.9% 88.3% -0.8% -9.3% 26.9% -63.9% -210.7% 43.8%

141 139.3 138.7 100.6 1.7 2.3 40.4 1.2% 1.7% 40.2% 0.0% -2.8% -21.2% 3.2% -62.6% -34.6%

• Table 19: Household Contents and Services price change analysis

Group, Subgroup or Class

Quarter

Household contents and services

Household Services

125.6 124.1 126.3 100.9 1.5 -0.7 24.7 1.2% -0.6% 24.5% 0.0% -5.0% -36.9% 2.2% -112.5% -60.1%

187.9 187.1 197.6 99.8 0.8 -9.7 88.1 0.4% -4.9% 88.3% -0.8% -9.3% 26.9% -63.9% -210.7% 43.8%

Child care

224.9 224.1 320.1 102.7 0.8 -95.2 122.2 0.4% -29.7% 119.0% -0.8% -34.2% 57.6% -69.8% -770.7% 93.9%

Hairdressing and personal care services

Other household services

183.2 181.9 176 100.2 1.3 7.2 83 0.7% 4.1% 82.8% -0.5% -0.3% 21.5% -39.6% -7.7% 35.0%

196.4 196.6 188.3 99.8 -0.2 8.1 96.6 -0.1% 4.3% 96.8% -1.3% -0.1% 35.4% -108.6% -3.0% 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%.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Household Contents and Services – Household Supplies The Household Supplies subgroup and classes Comparison of price changes 180 Toiletries and personal care products Melbourne , Jun-2008, 149.5

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

160

Household cleaning agents Melbourne , Jun2008, 131.7

Index 140

All groups Australia , Jun2008, 164.6

120

Household Supplies Melbourne , Jun-2008, 141.0

100

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• Figure 16: Household Supplies price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Household Supplies price change tables Group, Subgroup or Class

Quarter

Household contents and services

Household Supplies

125.6 124.1 126.3 100.9 1.5 -0.7 24.7 1.2% -0.6% 24.5% 0.0% -5.0% -36.9% 2.2% -112.5% -60.1%

141 139.3 138.7 100.6 1.7 2.3 40.4 1.2% 1.7% 40.2% 0.0% -2.8% -21.2% 3.2% -62.6% -34.6%

Household cleaning agents

131.7 134.8 134.4 101 -3.1 -2.7 30.7 -2.3% -2.0% 30.4% -3.5% -6.4% -31.0% -294.4% -145.3% -50.5%

Toiletries and personal care products

Other Household Supplies

149.5 148.9 150.1 101.6 0.6 -0.6 47.9 0.4% -0.4% 47.1% -0.8% -4.8% -14.2% -65.9% -109.0% -23.2%

147.4 143.7 141.7 99.6 3.7 5.7 47.8 2.6% 4.0% 48.0% 1.4% -0.4% -13.4% 117.6% -9.3% -21.8%

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Health prices The Health group and subgroups Comparison of price changes 300

The Health group has two subgroups: Health services Pharmaceuticals.

280

Health services Melbourne , Jun-2008, 276.3

260 Pharmaceuticals Melbourne , Jun-2008, 163.8

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

240 Index 220 200

Health Melbourne , Jun2008, 253.7

180 160 140 120

All groups Australia , Jun2008, 164.6

100

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• Figure 17: Health price change comparison

The Health Services subgroup and classes Comparison of price changes 320

Hospital and medical services Melbourne , Jun2008, 295.0

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

300 280

Dental services Melbourne , Jun-2008, 235.3

260 Optical services Melbourne , Jun-2008, 156.8

240 Index 220 200 180 160 140 120

Health services Melbourne , Jun-2008, 276.3

100

All groups Australia , Jun2008, 164.6

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• Figure 18: Health Services price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Health price change tables Group, Subgroup or Class

Quarter

Health

253.7 247.8 242.7 101.3 5.9 11 152.4 2.4% 4.5% 150.4% 1.2% 0.1% 89.1% 101.3% 2.2% 145.1%

Health services

276.3 267.4 261.8 100.3 8.9 14.5 176 3.3% 5.5% 175.5% 2.1% 1.1% 114.1% 181.3% 24.9% 185.9%

Pharmaceuticals

163.8 165.2 161.6 106.6 -1.4 2.2 57.2 -0.8% 1.4% 53.7% -2.0% -3.1% -7.7% -171.6% -69.3% -12.6%

• Table 22: Health price change analysis

Group, Subgroup or Class

Quarter

Health

253.7 247.8 242.7 101.3 5.9 11 152.4 2.4% 4.5% 150.4% 1.2% 0.1% 89.1% 101.3% 2.2% 145.1%

Health services

276.3 267.4 261.8 100.3 8.9 14.5 176 3.3% 5.5% 175.5% 2.1% 1.1% 114.1% 181.3% 24.9% 185.9%

Hospital and medical services

295 284 279.3 100.2 11 15.7 194.8 3.9% 5.6% 194.4% 2.7% 1.2% 133.0% 227.4% 26.8% 216.8%

Optical services

156.8 156.8 153.5 100 0 3.3 56.8 0.0% 2.1% 56.8% -1.2% -2.3% -4.6% -100.0% -51.5% -7.4%

Dental services

235.3 231.6 222.8 100.7 3.7 12.5 134.6 1.6% 5.6% 133.7% 0.4% 1.2% 72.3% 35.0% 26.5% 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Transport prices Transportation group and subgroups Comparison of price indexes

240

Urban transport fares Melbourne , Jun-2008, 246.7

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

Private motoring Melbourne , Jun-2008, 167.9

220

200 Index

Transportation Melbourne , Jun-2008, 171.8

180

160

140 All groups Melbourne , Jun2008, 162.5 120

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• Figure 19: Transport price change comparison

The Private motoring subgroup and classes Comparison of price changes 380 360

Other motoring charges Melbourne , Jun-2008, 354.6

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

340 320 300

Automotive fuel Melbourne , Jun-2008, 258.7

Private motoring Melbourne , Jun-2008, 167.9

280 260 Index 240

Motor vehicle repair and servicing Melbourne , Jun2008, 155.2

220 Motor vehicle parts and accessories Melbourne , Jun-2008, 133.6

200 180 160

All groups Melbourne , Jun2008, 162.5

Motor vehicles Melbourne , Jun-2008, 98.4

140 120 100

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• Figure 20: Private motoring price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Transport price change tables Group, Subgroup or Class

Quarter

Transportation

171.8 166.5 160.5 101.8 5.3 11.3 70 3.2% 7.0% 68.8% 2.0% 2.6% 7.4% 169.1% 58.8% 12.0%

Private motoring

Urban transport fares

167.9 162.5 156.5 101.8 5.4 11.4 66.1 3.3% 7.3% 64.9% 2.1% 2.8% 3.6% 180.9% 64.3% 5.8%

246.7 244.4 239.5 102.1 2.3 7.2 144.6 0.9% 3.0% 141.6% -0.2% -1.4% 80.3% -20.5% -32.2% 130.8%

• Table 24: Transport price change analysis

Group, Subgroup or Quarter Class Jun-2008 Price Index, Mar-2008 all household types Jun-2007 Mar-1990 In last quarter Points increase Previous 12 months Since 1990 In last quarter Percent increase Previous 12 months Since 1990 Difference from CPI In last quarter Melbourne percent Previous 12 months increase Since 1990 Percent greater than In last quarter CPI Melbourne Previous 12 months increase Since 1990

Private motoring Motor vehicles Automotive fuel 167.9 162.5 156.5 101.8 5.4 11.4 66.1 3.3% 7.3% 64.9% 2.1% 2.8% 3.6% 180.9% 64.3% 5.8%

98.4 98.5 99.4 100.6 -0.1 -1 -2.2 -0.1% -1.0% -2.2% -1.3% -5.4% -63.6% -108.6% -122.7% -103.6%

258.7 240.4 219.9 104.2 18.3 38.8 154.5 7.6% 17.6% 148.3% 6.4% 13.2% 86.9% 543.4% 297.9% 141.6%

Motor vehicle repair and servicing 155.2 150.9 148.5 101 4.3 6.7 54.2 2.8% 4.5% 53.7% 1.7% 0.1% -7.7% 140.9% 1.7% -12.6%

Motor vehicle parts and accessories 133.6 134 126.8 101.1 -0.4 6.8 32.5 -0.3% 5.4% 32.1% -1.5% 0.9% -29.2% -125.2% 20.9% -47.6%

Other motoring charges 354.6 351.2 338.5 101.3 3.4 16.1 253.3 1.0% 4.8% 250.0% -0.2% 0.3% 188.7% -18.2% 7.3% 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). Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Communications prices The Communications group and subgroups Comparison of price changes 180

Communications has two subgroups: Postal Telecommunication.

Postal Melbourne , Jun2008, 143.4

160 Telecommunication Melbourne , Jun-2008, 108.4 Index 140

All groups Australia , Jun2008, 164.6

120

100 Communication Melbourne , Jun-2008, 110.8

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â&#x20AC;˘ Figure 21: Communications price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Communications price change table Group, Subgroup or Class

Quarter

Communication

110.8 110.7 110.7 100.3 0.1 0.1 10.5 0.1% 0.1% 10.5% -1.1% -4.3% -50.9% -92.4% -98.0% -82.9%

Postal

143.4 143.4 142 101.1 0 1.4 42.3 0.0% 1.0% 41.8% -1.2% -3.4% -19.5% -100.0% -77.8% -31.8%

Telecommunication

108.4 108.3 108.4 100.2 0.1 0 8.2 0.1% 0.0% 8.2% -1.1% -4.4% -53.2% -92.2% -100.0% -86.7%

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Recreation prices The Recreation group and subgroups Comparison of price changes 240 Books, newspapers and magazines Melbourne , Jun-2008, 223.8 Sport and other recreation Melbourne , Jun-2008, 179.8

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

220 200 180

Holiday travel and accommodation Melbourne , Jun-2008, 139.4

160 Index 140 120

All groups Melbourne , Jun2008, 162.5

100 80

Recreation Melbourne , Jun-2008, 135.4

Audio, visual and computing Melbourne , Jun-2008, 44.5

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â&#x20AC;˘ Figure 22: Recreation price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Recreation price change table Group, Subgroup or Class

Quarter

Recreation

135.4 136.5 132.8 101 -1.1 2.6 34.4 -0.8% 2.0% 34.1% -2.0% -2.5% -27.3% -168.1% -55.8% -44.5%

Audio, visual Books, newspapers Sport and other Holiday travel and and computing and magazines recreation accommodation

44.5 44.8 46.8 99.6 -0.3 -2.3 -55.1 -0.7% -4.9% -55.3% -1.9% -9.3% -116.7% -156.6% -210.8% -190.1%

223.8 223.4 218.8 101.2 0.4 5 122.6 0.2% 2.3% 121.1% -1.0% -2.1% 59.8% -84.9% -48.5% 97.4%

179.8 180.1 173.3 102 -0.3 6.5 77.8 -0.2% 3.8% 76.3% -1.3% -0.7% 14.9% -114.1% -15.4% 24.3%

139.4 141.8 133.3 101.3 -2.4 6.1 38.1 -1.7% 4.6% 37.6% -2.9% 0.1% -23.8% -243.1% 3.2% -38.7%

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Education prices The Education group/subgroup and classes Comparison of price changes 280 Secondary education Melbourne , Jun-2008, 161.4

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

260 240

Preschool and primary education Melbourne , Jun-2008, 157.9

220 Index 200

Education Melbourne , Jun2008, 265.3

Tertiary education Melbourne , Jun-2008, 131.0

180 160

140 120

100

All groups Australia , Jun2008, 164.6

Jun-2000

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• Figure 23: Education price change comparison

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Education price change table Group, Subgroup or Class

Quarter

Education

265.3 265.2 255.8 107.4 0.1 9.5 157.9 0.0% 3.7% 147.0% -1.1% -0.7% 85.7% -96.8% -16.3% 139.6%

Preschool and primary education

157.9 157.7 156.6 #N/A 0.2 1.3 #N/A 0.1% 0.8% #N/A -1.1% -3.6% #N/A -89.3% -81.3% #N/A

Secondary education

Tertiary education

161.4 161.4 152.4 #N/A 0 9 #N/A 0.0% 5.9% #N/A -1.2% 1.5% #N/A -100.0% 33.2% #N/A

131 131 126.9 #N/A 0 4.1 #N/A 0.0% 3.2% #N/A -1.2% -1.2% #N/A -100.0% -27.1% #N/A

• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Financial and Insurance Services prices Financial and Insurance Services group, subgroups and classes Comparison of price changes 280 Insurance services Melbourne , Jun-2008, 256.6

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

260 240

Financial Services Melbourne , Jun-2008, 114.1

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

220 Index 200 180

All groups Australia , Jun2008, 164.6

Deposit and Loan Facilities Melbourne , Jun2008, 117.5

160

Other Financial Services Melbourne , Jun-2008, 109.6

140

Financial and insurance services Melbourne , Jun2008, 115.1

120 100 Jun-2005

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• 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.

Long-term price trends

Melbourne, September 2008

Cost changes

Price changes in groups and various subgroups

Financial and Insurance Services price change table Group, Subgroup or Class

Quarter

Financial and insurance services

115.1 111.7 104.5 #N/A 3.4 10.6 #N/A 3.0% 10.1% #N/A 1.9% 5.7% #N/A 157.3% 128.7% #N/A

Financial Services

114.1 110.7 103.4 #N/A 3.4 10.7 #N/A 3.1% 10.3% #N/A 1.9% 5.9% #N/A 159.6% 133.4% #N/A

Deposit and Loan Facilities

117.5 107.3 101 #N/A 10.2 16.5 #N/A 9.5% 16.3% #N/A 8.3% 11.9% #N/A 703.5% 268.4% #N/A

Other Financial Services

109.6 115.2 106.5 #N/A -5.6 3.1 #N/A -4.9% 2.9% #N/A -6.0% -1.5% #N/A -510.9% -34.4% #N/A

Insurance services

256.6 249.6 236 100.7 7 20.6 155.9 2.8% 8.7% 154.8% 1.6% 4.3% 93.4% 137.1% 96.8% 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.

Long-term price trends

Melbourne, September 2008

Relative Price Indexes

Development of the Relative Price Index

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

Relative Price Indexes

Development of the Relative Price Index

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. Household Group Selection Number

Number per grouping

Composition of household

Couple only

2 3

Composition of household Composition of household

Couple with one dependent child only Couple with two dependent children only

4 5

Composition of household Composition of household

Couple with three or more dependent children only Lone person household

Composition of household

One parent, one family households with one dependent child only

Composition of household

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

n/a

Composition of household

N/A

n/a 8

n/a 1

Composition of household Composition of household Government pensions and allowances

N/A? (All?) other household types All households Age/disability pension

9 10

2 3

Government pensions and allowances Government pensions and allowances

Unemployment, education and sickness allowances Other government pensions and allowances

n/a n/a

Government pensions and allowances Government pensions and allowances

N/A N/A

n/a 11

n/a 1

Government pensions and allowances Government pensions and allowances Income source of household

N/A All households Wage and salary

12 13

2 3

Income source of household Income source of household

N/A? Own unincorporated business income Other income

n/a n/a

Income source of household Income source of household

N/A N/A

n/a -

Income source of household Income source of household

N/A All households

Type of Household Grouping

Household Group (2003-04 names)

• 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

Relative Price Indexes

Development of the Relative Price Index

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). Housing subgroups: approximate proportions of Households by household family composition Owner-occupier, Rental, percentage percentage of of Housing Housing

Family composition

Couple only Couple with one dependent child only Couple with two dependent children only Couple with three or more dependent children only Lone person household One parent, one family households with one dependent child only One parent, one family households with two dependent child only One parent, one family households with three or more dependent children only Other All households (percentage)

Total, excluding Utilities

Ratio, Owneroccupier to Rental

84.3% 77.8% 83.5%

15.7% 22.2% 16.5%

100.0% 100.0% 100.0%

5.38 3.50 5.06

80.7%

19.3%

100.0%

4.17

62.6%

37.4%

100.0%

1.67

37.4%

62.6%

100.0%

0.60

40.1%

59.9%

100.0%

0.67

37.2%

62.8%

100.0%

0.59

70.8% 73.0%

29.2% 27.0%

100.0% 100.0%

2.43 2.71

• Table 31: Proportions of Households in Housing subgroups by Family Composition Housing subgroups (excl Utilities): approximate proportions of households by source of income Principal source of household income

Household has zero or negative income Wage and salary Own unincorporated business income Government pensions and allowances Other income All households

Owner-occupier, percentage of Housing

Rental, percentage of Housing

76.7% 74.3% 82.2% 63.0% 89.1% 73.0%

23.3% 25.7% 17.8% 37.0% 10.9% 27.0%

Total

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Ratio, Owneroccupier to Rental

3.29 2.89 4.62 1.70 8.20 2.71

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

HES and CPI

Melbourne, September 2008

Relative Price Indexes

Development of the Relative Price Index

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). Transportation subgroups: approximate proportions of Households by family composition Household family composition

Private Motoring, some with Urban Transport Fares

Urban Transport Fares only

Ratio, Private Urban Transport Motoring to Urban Fares and Private Transport Fares Motoring

Total

94.8% 96.5% 94.7%

5.2% 3.5% 5.3%

100.0% 100.0% 100.0%

18.16 27.24 17.75

14.7% 22.7% 18.9%

95.0%

5.0%

100.0%

19.05

20.4%

79.1%

20.9%

100.0%

3.79

2.6%

83.2%

16.8%

100.0%

4.97

13.3%

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%

• Table 33: Proportions of Households in Transportation subgroups by Family Composition Transportation subgroups: approximate proportions of households by source of income Principal source of household income

Household has zero or negative income Wage and salary Own unincorporated business income Government pensions and allowances Other income All households

Private Motoring, some with Urban Transport Fares

Urban Transport Fares only

89.3% 93.1% 91.8% 83.3% 89.6% 90.3%

10.7% 6.9% 8.2% 16.7% 10.4% 9.7%

Total

Ratio, Private Urban Transport Motoring to Urban Fares and Private Transport Fares Motoring

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

8.33 13.59 11.14 4.99 8.64 9.31

-7.1% 20.5% 9.4% 5.7% 14.5% 15.5%

• 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

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport 180

160

Index

RPI, All Transportation expenditure on Transport Fares, All households, Australia, Jun-2008, 172.4

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

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

Average weekly household expenditure on Transportation = $109.66 (June 2005) Average weekly household expenditure on Housing = $192.65 (June 2005)

RPI, All Transportation expenditure on Private Motoring, All households, Australia, Jun-2008, 164.2 RPI, All Housing expenditure (excl Utilities) on House Ownership, All households, Australia, Jun2008, 162.8

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

GST inclusion starts 14th Series starts

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CPI, Australia , Jun-2008, 164.6

13th Series starts

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15th Series starts

140

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• Figure 25: RPI, All Household types, Australia

Long-term RPI data

Melbourne, September 2008

Relative Price Indexes

All household groups, 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 compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Jun-2008 Mar-2008 Jun-2007 Mar-1990 In last quarter Previous 12 months Since 1990 In last quarter Previous 12 months Since 1990 In last quarter Previous 12 months Since 1990 In last quarter Previous 12 months Since 1990 In last quarter Previous 12 months Since 1990 In last quarter Previous 12 months Since 1990

RPI Upper Limit, All households

RPI Lower Limit, All households

177.0 174.9 169.1 100.7 2.1 7.9 76.3 1.2% 4.7% 75.7% -0.3% 0.1% 12.6% -17.7% 3.2% 19.9% -0.3% 0.1% 12.6% -17.7% 3.2% 19.9%

162.4 160.1 155.7 101.0 2.2 6.7 61.3 1.4% 4.3% 60.7% -0.1% -0.2% -2.4% -5.2% -4.3% -3.9% -0.1% -0.2% -2.4% -5.2% -4.3% -3.9%

All Groups (? CPI) Australia

CPI, Australia

164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• 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 (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, All households

RPI with Rental component only, All households

172.4 170.6 165.4 100.9 1.8 7.0 71.5 1.0% 4.2% 70.9% -0.4% -0.3% 7.7% -29.8% -5.9% 12.3% -0.4% -0.3% 7.7% -29.8% -5.9% 12.3%

169.3 166.6 161.4 100.9 2.7 7.9 68.4 1.6% 4.9% 67.8% 0.1% 0.4% 4.7% 9.9% 8.7% 7.5% 0.1% 0.4% 4.7% 9.9% 8.7% 7.5%

All Groups (? CPI) Australia

CPI, Australia

164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Long-term RPI data

Melbourne, September 2008

Relative Price Indexes

All household groups, 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 (Private Motoring and House Ownership) compared to the CPI RPI Lower Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Private Motoring component only, All households

RPI with House Ownership All Groups (? component only, All CPI) households Australia

164.2 161.8 157.1 101.0 2.4 7.1 63.2 1.5% 4.5% 62.5% 0.0% 0.0% -0.6% -0.3% -0.5% -0.9% 0.0% 0.0% -0.6% -0.3% -0.5% -0.9%

162.8 160.6 156.1 101.0 2.2 6.7 61.8 1.4% 4.3% 61.2% -0.1% -0.2% -2.0% -6.9% -4.6% -3.1% -0.1% -0.2% -2.0% -6.9% -4.6% -3.1%

CPI, Australia

164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Expenditure Group

All households

Food

123.05 $

123.05

0.0%

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

$ $ $

37.07 $ 44.19 $ 192.65 $

37.07 44.19 192.65

$ $ $

0.0% 0.0% 0.0%

5 6

Household Furnishings, Supplies and Services Health

$ $

98.71 $ 27.67 $

98.71 27.67

$ $

0.0% 0.0%

7 8

Transportation Communication

$ $

109.66 $ 37.32 $

109.66 37.32

$ $

0.0% 0.0%

$ $ $ $

110.59 13.85 115.86 910.63

$ $ $ $

0.0% 0.0% 0.0% 0.0%

9 Recreation 10 Education 11 Financial and Insurance Services Total

All households

$ $ $ $

Difference

Percent difference

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

Long-term RPI data

Melbourne, September 2008

Relative Price Indexes

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

Expenditure Subgroup

All households

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

47.12 25.63 119.90 192.65

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

103.63 $ 6.09 $ 109.72 $

Difference

Percent difference

$ $ $ $

0.0% 0.0% 0.0% 0.0%

103.63 $ 6.09 $ 109.72 $

0.0% 0.0% 0.0%

47.12 25.63 119.90 192.65

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

All households

Percent of Total, All households

Ratio, All households

4.3 Other Housing

119.90 $

119.90

71.8%

4.1 Rents Total

$ $

47.12 $ 167.02 $

47.12 167.02

28.2% 100.0%

7.1 Private motoring

103.63 $

103.63

94.5%

7.2 Urban transport fares Total

$ $

6.09 $ 109.72 $

6.09 109.72

5.5% 100.0%

2.54

17.02

• 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.

Long-term RPI data

Melbourne, September 2008

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $42.11 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Age/disability pension, Melbourne, Jun-2008, 179.4

Average weekly household expenditure on Housing = $91.21 (June 2005)

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Age/disability pension, Melbourne, Jun-2008, 160.5

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares, combined, All households, Australia, Jun2008, 176.2

RPI baseline for Age/disability pension, Melbourne, Jun-2008, 164.1

GST inclusion starts 14th Series starts 13th Series starts

0 ar -1 M

ar -0

8 M

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ar -0

6 M

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CPI, Australia , Jun-2008, 164.6

12th weight @ 1995 12th Series starts

100

Quarter

• 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

Relative Price Indexes

Government Pensions and benefits

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Age/disability pension

RPI Lower Limit, Age/disability pension

179.4 177.5 172.5 99.4 1.9 6.9 80.0 1.1% 4.0% 80.4% -0.1% -0.5% 19.1% -11.2% -10.4% 31.0% -0.4% -0.5% 17.3% -29.0% -11.9% 27.4%

160.5 158.7 153.9 99.4 1.8 6.6 61.1 1.1% 4.3% 61.4% -0.1% -0.1% 0.1% -5.3% -3.2% 0.1% -0.4% -0.2% -1.7% -24.3% -4.8% -2.7%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 41: RPI – CPI comparison – Age and disability support pensions RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Age/disability pension

RPI with Rental component only, Age/disability pension

173.9 172.4 167.6 99.5 1.5 6.3 74.5 0.9% 3.8% 74.9% -0.3% -0.6% 13.5% -24.0% -14.6% 22.0% -0.6% -0.7% 11.7% -39.2% -16.0% 18.6%

169.5 167.3 162.2 99.4 2.3 7.4 70.1 1.3% 4.6% 70.6% 0.2% 0.1% 9.2% 13.8% 2.6% 15.0% -0.1% 0.0% 7.4% -9.0% 1.0% 11.8%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Aged and Disability Support Pensioners

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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

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

Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

All households

Age/disability pension

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

16.5% 4.0% 4.1% 23.0% 11.4% 3.7% 10.6% 4.7% 9.9% 0.1% 12.0% 100.0%

Difference

Difference from All Households at Jun-2008

Variance (percent difference)

3.2% 0.0% -0.6% 0.1% 0.8% 0.9% -1.2% 0.7% -1.9% -1.5% -0.4% 0.0%

23.8% -1.0% -12.0% 0.2% 7.6% 31.5% -10.2% 16.8% -16.1% -94.4% -3.3% n/a

6.3 -0.1 -0.7 0.1 1.1 2.5 -2.3 0.8 -2.9 -4.3 -0.5 0.0

• 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

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

Expenditure Subgroup

All households

Age/disability pension

Difference

Variance (percent difference)

Difference from RPI Aus (≈CPI) at Jun-2008

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

6.7% 4.4% 11.8% 22.9%

1.4% 1.6% -3.0% 0.0%

26.3% 58.7% -20.4% 0.0%

1.7 2.6 -2.0 2.3

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.3% 0.6% 11.8%

0.1% -0.1% 0.0%

0.9% -14.6% n/a

0.2 -0.1 0.1

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

Aged and Disability Support Pensioners

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Age/disability pension

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

123.05 37.07 44.19 192.65 98.71 27.67 109.66 37.32 110.59 13.85 115.86 910.63

66.42 16.01 16.96 84.20 46.31 15.87 42.93 19.01 40.48 0.34 48.86 397.39

Difference

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Percent difference

56.63 21.06 27.23 108.45 52.40 11.80 66.73 18.31 70.11 13.52 67.00 513.24

-46.0% -56.8% -61.6% -56.3% -53.1% -42.6% -60.8% -49.1% -63.4% -97.6% -57.8% -56.4%

• Table 45: Expenditure – Age and disability support pensions Average weekly household expenditure: comparison of ''Age and disability support pensions'' and ''All Households'' Australia (June 2005) All households

Age/disability pension

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

47.12 25.63 119.90 192.65

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

103.63 $ 6.09 $ 109.72 $

Expenditure Subgroup

25.58 17.49 41.06 84.13

Difference

Percent difference

-$ -$ -$ -$

21.54 8.14 78.84 108.52

-45.7% -31.8% -65.8% -56.3%

40.87 -$ 2.03 -$ 42.90 -$

62.76 4.06 66.82

-60.6% -66.6% -60.9%

• Table 46: Expenditure, subgroups – Age and disability support pensions Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Age/disability pension, Australia (June 2005) Expenditure Subgroup

All households

Age/disability pension

Percent of Total, Age/disability pension

4.3 Other Housing 4.1 Rents Total

$ $ $

118.86 $ 55.29 $ 174.15 $

40.71 30.02 70.72

57.6% 42.4% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.90 $ 5.99 $ 107.89 $

40.18 2.00 42.18

95.3% 4.7% 100.0%

Ratio, Age/disability pension

1.36

20.10

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

Aged and Disability Support Pensioners

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $43.50 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Unemployment/ sickness/ education allowance, Melbourne, Jun-2008, 176.9

Average weekly household expenditure on Housing = $124.69 (June 2005)

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Unemployment/ sickness/ education allowance, Melbourne, Jun-2008, 157.7

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for Unemployment/ sickness/ education allowance, Melbourne, Jun-2008, 163.4

GST inclusion starts 14th Series starts

ar -1 0 M

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CPI, Australia , Jun-2008, 164.6

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100

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12th weight @ 1995

Quarter

• Figure 27: RPI Unemployment, education and sickness allowances

Selected data for the RPI limits and the CPI are shown in Table 48: 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.

Unemployment, education and sickness allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Unemployment/ sickness/ education allowance

RPI Lower Limit, All Groups (~ Unemployment/ sickness/ CPI) education allowance Melbourne

176.9 175.2 169.9 99.7 1.6 7.0 77.2 0.9% 4.1% 77.4% -0.2% -0.3% 16.1% -20.9% -7.1% 26.2% -0.5% -0.4% 14.3% -36.8% -8.7% 22.6%

157.7 156.1 151.0 99.7 1.5 6.7 58.0 1.0% 4.4% 58.2% -0.2% 0.0% -3.2% -16.9% 0.3% -5.2% -0.5% -0.1% -5.0% -33.6% -1.3% -7.8%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 48: RPI – CPI comparison – Unemployment, education and sickness allowances RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport RPI with Rental component All Groups (? Fares only, Unemployment/ only, Unemployment/ CPI) sickness/ education sickness/ education Melbourne allowance allowance

172.7 171.3 166.1 99.7 1.4 6.6 73.0 0.8% 4.0% 73.2% -0.4% -0.5% 11.8% -31.0% -10.4% 19.2% -0.7% -0.5% 10.0% -44.8% -11.8% 15.9%

167.6 165.6 160.1 99.6 2.0 7.5 67.9 1.2% 4.7% 68.2% 0.0% 0.2% 6.8% 2.4% 5.5% 11.1% -0.3% 0.2% 5.0% -18.1% 3.8% 8.0%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Unemployment, education and sickness allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

Weighting comparison tables 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. Variance in weights: ''Unemployment, education and sickness allowances'' from ''All Households'' Melbourne (June 2005) Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

Unemployment/ sickness/ education allowance

All households

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

Difference

14.8% 5.9% 2.5% 26.8% 9.8% 1.4% 9.3% 6.8% 9.4% 1.0% 12.3% 100.0%

Variance (percent difference)

1.4% 1.9% -2.2% 3.9% -0.8% -1.4% -2.5% 2.8% -2.4% -0.5% -0.1% 0.0%

10.5% 46.9% -47.5% 16.8% -7.3% -49.0% -20.9% 68.8% -20.6% -33.0% -0.8% n/a

Points contribution Difference from All Households at Jun-2008

2.8 5.4 -2.7 5.4 -1.1 -3.9 -4.7 3.4 -3.7 -1.5 -0.1 -0.7

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

Unemployment/ sickness/ education allowance

All households

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

10.1% 3.7% 9.1% 22.9%

4.9% 0.9% -5.8% 0.0%

92.3% 32.7% -39.0% n/a

8.6 1.9 -7.6 2.9

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

10.6% 1.2% 11.8%

-0.5% 0.5% 0.0%

-4.6% 78.7% n/a

-1.0 1.4 0.5

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

Unemployment, education and sickness allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

Unemployment/ sickness/ education allowance

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

$ $ $ $ $ $ $ $ $ $ $ $

68.71 27.30 11.46 124.69 45.69 6.65 43.50 31.56 43.81 4.86 57.47 465.71

Difference

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Percent difference

52.91 9.05 31.21 83.99 50.65 18.86 64.07 4.99 64.06 9.33 55.80 444.92

-43.5% -24.9% -73.1% -40.2% -52.6% -73.9% -59.6% -13.7% -59.4% -65.7% -49.3% -48.9%

• Table 52: Expenditure – Unemployment, education and sickness allowances Average weekly household expenditure: comparison of ''Unemployment, education and sickness allowances'' and ''All Households'' Melbourne (June 2005) Expenditure Subgroup

Unemployment/ sickness/ education allowance

All households

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

54.51 19.90 48.68 123.09

Difference

Percent difference

$ -$ -$ -$

6.45 5.52 86.53 85.60

13.4% -21.7% -64.0% -41.0%

39.47 -$ 4.35 -$ 43.82 -$

62.18 1.63 63.81

-61.2% -27.2% -59.3%

• Table 53: Expenditure, subgroups – Unemployment, education and sickness allowances Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Unemployment/ sickness/ education allowance, Melbourne (June 2005)

Expenditure Subgroup

All households

Unemployment/ sickness/ education allowance

Percent of Total, Unemployment/ sickness/ education

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

48.68 54.51 103.18

47.2% 52.8% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

39.47 4.35 43.82

90.1% 9.9% 100.0%

Ratio, Unemployment/ sickness/ education allowance

0.89

9.08

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

Unemployment, education and sickness allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $59.41 (June 2005)

180

Average weekly household expenditure on Housing = $135.61 (June 2005)

RPI, All expenditures on Rental and Transport Fares combined, Other, Melbourne, Jun-2008, 177.3

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Other, Melbourne, Jun-2008, 158.0

140

15th Series starts

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

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

GST inclusion starts 14th Series starts

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 3 M

ar -0 2 M

ar -0 0

ar -0 1

CPI, Australia , Jun-2008, 164.6

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 4 M

ar -9 3 M

ar -9 2 M

ar -9 1 M

ar -9 0 M

12th weight @ 1995 12th Series starts

100

ar -9 9

13th Series starts

Quarter

• Figure 28: RPI Other government pensions and allowances

Selected data for the RPI limits and the CPI are shown in Table 57: 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.

Other government pensions and allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Other

RPI Lower Limit, Other

176.2 174.6 169.8 99.6 1.6 6.4 76.6 0.9% 3.8% 77.0% -0.2% -0.7% 15.6% -20.9% -14.7% 25.4% -0.5% -0.7% 13.8% -36.7% -16.1% 21.9%

CPI, Melbourne

157.3 155.8 151.2 99.6 1.5 6.2 57.8 1.0% 4.1% 58.0% -0.2% -0.3% -3.4% -16.0% -7.9% -5.5% -0.5% -0.4% -5.1% -32.8% -9.4% -8.1%

CPI, Australia

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 55: RPI – CPI comparison – Other government pensions and allowances RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Other

RPI with Rental component only, Other

173.0 171.5 166.8 99.6 1.4 6.1 73.3 0.8% 3.7% 73.6% -0.3% -0.8% 12.2% -28.7% -17.3% 19.9% -0.6% -0.8% 10.5% -43.0% -18.7% 16.6%

166.4 164.3 159.4 99.5 2.0 6.9 66.8 1.2% 4.4% 67.1% 0.0% -0.1% 5.7% 4.0% -1.7% 9.4% -0.2% -0.1% 4.0% -16.8% -3.3% 6.3%

CPI, Melbourne

CPI, Australia

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Other government pensions and allowances

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

Weighting comparison tables 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. Variance in weights: ''Other government pensions and allowances'' from ''All Households'' Melbourne (June 2005) Expenditure Group

All households

Other

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

Food

13.4%

16.6%

3.2%

24.3%

6.4

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

4.0% 4.7% 22.9%

4.3% 4.9% 24.1%

0.3% 0.2% 1.2%

8.3% 4.9% 5.2%

1.0 0.3 1.7

5 6

Household Furnishings, Supplies and Services Health

10.6% 2.8%

12.0% 2.0%

1.4% -0.8%

13.2% -29.7%

1.9 -2.3

7 8

Transportation Communication

11.8% 4.0%

10.6% 4.9%

-1.2% 0.9%

-10.6% 22.1%

-2.4 1.1

11.8% 1.6% 12.4% 100.0%

9.4% 0.9% 10.4% 100.0%

-2.5% -0.7% -2.1% 0.0%

-20.8% -42.8% -16.7% n/a

-3.7 -2.0 -2.7 -0.7

9 Recreation 10 Education 11 Financial and Insurance Services Total

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 58. Variance in weights: ''Other government pensions and allowances'' from ''All Households'' Melbourne (June 2005) Expenditure Subgroup

4.1 Rents

All households

Other

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

5.3%

10.7%

5.5%

103.3%

9.7

4.2 Utilities 4.3 Other Housing Total

2.8% 14.8% 22.9%

3.5% 8.7% 22.9%

0.7% -6.2% 0.0%

26.2% -41.7% n/a

1.5 -8.1 3.1

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.3% 0.5% 11.8%

0.1% -0.1% 0.0%

1.0% -16.7% n/a

0.2 -0.3 -0.1

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

Melbourne, September 2008

Relative Price Indexes

Government Pensions and benefits

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

All households

Other

Difference

Percent difference

Food

121.62 $

93.34 -$

28.28

-23.3%

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

$ $ $

36.34 $ 42.66 $ 208.69 $

24.30 -$ 27.62 -$ 135.61 -$

12.04 15.04 73.08

-33.1% -35.3% -35.0%

5 6

Household Furnishings, Supplies and Services Health

$ $

96.34 $ 25.51 $

67.32 -$ 11.08 -$

29.02 14.43

-30.1% -56.6%

7 8

Transportation Communication

$ $

107.57 $ 36.55 $

59.41 -$ 27.55 -$

48.16 9.01

-44.8% -24.6%

$ $ $ $

107.87 14.19 113.27 910.63

55.10 9.17 55.03 348.36

-51.1% -64.7% -48.6% -38.3%

9 Recreation 10 Education 11 Financial and Insurance Services Total

$ $ $ $

52.77 5.02 58.24 562.27

-$ -$ -$ -$

• Table 59: Expenditure – Other government pensions and allowances Average weekly household expenditure: comparison of ''Other government pensions and allowances'' and ''All Households'' Melbourne (June 2005) Expenditure Subgroup

All households

Other

Difference

62.75

Percent difference

4.1 Rents

48.06 $

14.69

30.6%

4.2 Utilities 4.3 Other Housing Total

$ $ $

25.42 $ 135.20 $ 208.69 $

20.61 -$ 50.66 -$ 134.01 -$

4.82 84.55 74.68

-19.0% -62.5% -35.8%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

56.61 -$ 2.74 -$ 59.35 -$

45.04 3.23 48.27

-44.3% -54.1% -44.9%

• Table 60: Expenditure, subgroups – Other government pensions and allowances Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Other, Melbourne (June 2005) Expenditure Subgroup

All households

Percent of Total, Other

Other

Ratio, Other

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

50.66 62.75 113.41

44.7% 55.3% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

56.61 2.74 59.35

95.4% 4.6% 100.0%

0.81

20.64

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

Other government pensions and allowances

Melbourne, September 2008

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $59.73 (June 2005)

180

Average weekly household expenditure on Housing = $166.96 (June 2005)

RPI, All expenditures on Rental and Transport Fares combined, One parent households with two dependent child only, Melbourne, Jun-2008, 175.3

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, One parent households with two dependent child only, Melbourne, Jun2008, 155.8 15th Series starts

120

RPI baseline for One parent households with two dependent child only, Melbourne, Jun2008, 161.8

GST inclusion starts 14th Series starts

ar -1 M

ar -0 M

ar -0 8 M

ar -0

5 M

ar -0 M

ar -0 3 M

ar -0 M

ar -0

ar -0 0

CPI, Australia , Jun-2008, 164.6

ar -9

ar -9 M

ar -9 7 M

ar -9 M

ar -9 5 M

ar -9 M

ar -9 2 M

ar -9 M

12th weight @ 1995

13th Series starts

12th Series starts

100

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

ar -0

140

Quarter

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

Selected data for the RPI limits and the CPI are shown in Table 62: 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.

One parent with two or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, One parent RPI Lower Limit, One parent All Groups (? households with two households with two CPI) dependent child only dependent child only Melbourne 175.3 173.8 169.0 99.7 1.4 6.2 75.6 0.8% 3.7% 75.8% -0.4% -0.7% 14.5% -30.3% -16.7% 23.6% -0.7% -0.8% 12.7% -44.3% -18.1% 20.1%

155.8 154.5 149.9 99.7 1.3 5.9 56.2 0.9% 4.0% 56.3% -0.3% -0.5% -5.0% -28.0% -10.6% -8.2% -0.6% -0.5% -6.8% -42.4% -12.1% -10.8%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 62: RPI – CPI comparison – One parent with two or more children RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, One parent households with two dependent child only

RPI with Rental component All Groups (? only, One parent households CPI) with two dependent child Melbourne only

171.6 170.4 165.7 99.7 1.2 5.9 71.9 0.7% 3.6% 72.1% -0.5% -0.9% 10.7% -39.4% -19.8% 17.4% -0.8% -1.0% 8.9% -51.6% -21.1% 14.2%

165.5 163.7 158.8 99.6 1.8 6.8 65.9 1.1% 4.3% 66.1% -0.1% -0.2% 4.7% -6.2% -4.0% 7.7% -0.4% -0.3% 3.0% -25.0% -5.6% 4.7%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

One parent with two or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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. Variance in weights: ''One parent households with two or more dependent children'' from ''All Households'' Melbourne (June 2005) Expenditure Group

One parent households with two dependent child only

All households

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

Food

13.4%

14.9%

1.6%

11.6%

3.1

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

4.0% 4.7% 22.9%

2.5% 5.2% 25.4%

-1.5% 0.5% 2.5%

-36.9% 11.4% 11.0%

-4.2 0.7 3.5

5 6

Household Furnishings, Supplies and Services Health

10.6% 2.8%

10.5% 2.0%

-0.1% -0.8%

-0.7% -27.5%

-0.1 -2.2

7 8

Transportation Communication

11.8% 4.0%

9.1% 5.6%

-2.7% 1.6%

-23.0% 39.6%

-5.2 2.0

11.8% 1.6% 12.4% 100.0%

12.1% 2.5% 10.1% 100.0%

0.3% 1.0% -2.4% 0.0%

2.2% 62.7% -19.1% n/a

0.4 2.9 -3.0 -2.3

9 Recreation 10 Education 11 Financial and Insurance Services Total

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 65. Variance in weights: ''One parent households with two or more dependent children'' from ''All Households'' Melbourne (June 2005) Expenditure Subgroup

4.1 Rents

One parent households with two dependent child only

All households

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

5.3%

11.7%

6.4%

121.6%

11.4

4.2 Utilities 4.3 Other Housing Total

2.8% 14.8% 22.9%

3.3% 8.0% 22.9%

0.5% -6.9% 0.0%

16.6% -46.3% n/a

1.0 -9.0 3.3

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.1% 0.7% 11.8%

0.0% 0.0% 0.0%

-0.3% 4.9% n/a

-0.1 0.1 0.0

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

One parent with two or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

Expenditure Group

All households

Food

121.62 $

97.87 -$

23.75

-19.5%

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

$ $ $

36.34 $ 42.66 $ 208.69 $

16.53 -$ 34.26 -$ 166.96 -$

19.81 8.41 41.73

-54.5% -19.7% -20.0%

5 6

Household Furnishings, Supplies and Services Health

$ $

96.34 $ 25.51 $

68.96 -$ 13.34 -$

27.38 12.18

-28.4% -47.7%

7 8

Transportation Communication

$ $

107.57 $ 36.55 $

59.73 -$ 36.79 $

47.84 0.24

-44.5% 0.6%

$ $ $ $

107.87 14.19 113.27 910.63

79.47 -$ 16.64 $ 66.04 -$ 656.60 -$

28.40 2.46 47.23 254.03

-26.3% 17.3% -41.7% -27.9%

9 Recreation 10 Education 11 Financial and Insurance Services Total

$ $ $ $

Difference

Percent difference

• Table 66: Expenditure – One parent with two or more children Average weekly household expenditure: comparison of ''One parent households with two or more dependent children'' and ''All Households'' Melbourne (June 2005)

Expenditure Subgroup

All households

One parent households with two dependent child only

84.33

Difference

Percent difference

4.1 Rents

48.06 $

36.27

75.5%

4.2 Utilities 4.3 Other Housing Total

$ $ $

25.42 $ 135.20 $ 208.69 $

23.46 -$ 57.44 -$ 165.24 -$

1.96 77.76 43.45

-7.7% -57.5% -20.8%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

56.31 -$ 3.48 -$ 59.79 -$

45.35 2.49 47.84

-44.6% -41.7% -44.4%

• Table 67: Expenditure, subgroups – One parent with two or more children Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, One parent households with two dependent child only, Melbourne (June 2005)

Expenditure Subgroup

All households

One parent households with two dependent child only

Percent, One parent households with two…

4.3 Other Housing

135.20 $

57.44

40.5%

4.1 Rents Total

$ $

48.06 $ 183.27 $

84.33 141.77

59.5% 100.0%

7.1 Private motoring

101.65 $

56.31

94.2%

7.2 Urban transport fares Total

$ $

5.97 $ 107.63 $

3.48 59.79

5.8% 100.0%

Ratio, One parent households with two dependent child only

0.68

16.18

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

One parent with two or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport 180 Average weekly household expenditure on Transportation = $69.14 (June 2005)

RPI, All expenditures on Rental and Transport Fares combined, One parent households with one dependent child only, Melbourne, Jun-2008, 173.0

Average weekly household expenditure on Housing = $165.51 (June 2005)

160 RPI, All expenditures on House Ownership and Private Motoring combined, One parent households with one dependent child only, Melbourne, Jun2008, 153.4

Index

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for One parent households with one dependent child only, Melbourne, Jun2008, 159.9

GST inclusion starts 14th Series starts

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 2

ar -0 3 M

ar -0 0

ar -0 1

CPI, Australia , Jun-2008, 164.6

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 4 M

ar -9 3 M

ar -9 2 M

ar -9 1 M

ar -9 0 M

12th weight @ 1995 12th Series starts

100

ar -9 9

13th Series starts

Quarter

• Figure 30: RPI One Parent with One Child

Selected data for the RPI limits and the CPI are shown in Table 69: 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.

One parent with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, One parent RPI Lower Limit, One parent All Groups (? households with one households with one CPI) dependent child only dependent child only Melbourne 173.0 171.4 166.5 99.8 1.6 6.5 73.2 0.9% 3.9% 73.3% -0.3% -0.5% 12.0% -21.4% -11.5% 19.5% -0.5% -0.6% 10.2% -37.1% -12.9% 16.2%

153.4 151.9 147.2 99.8 1.5 6.2 53.6 1.0% 4.2% 53.7% -0.2% -0.2% -7.7% -18.5% -4.8% -12.6% -0.5% -0.3% -9.5% -34.8% -6.3% -15.0%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 69: RPI – CPI comparison – One Parent with One Child RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, One parent households with one dependent child only

RPI with Rental component All Groups (? only, One parent households CPI) with one dependent child Melbourne only

169.6 168.2 163.4 99.9 1.4 6.2 69.8 0.8% 3.8% 69.8% -0.4% -0.6% 8.5% -29.8% -14.2% 13.8% -0.6% -0.7% 6.7% -43.8% -15.6% 10.6%

163.3 161.3 156.3 99.8 2.0 7.1 63.5 1.2% 4.5% 63.6% 0.0% 0.1% 2.3% 3.6% 1.8% 3.7% -0.3% 0.0% 0.5% -17.2% 0.2% 0.8%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

One parent with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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. Variance in weights: ''One parent households with one dependent child only'' from ''All Households'' Melbourne (June 2005) Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

One parent households with one dependent child only

All households

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

13.0% 3.0% 4.7% 27.4% 10.0% 1.7% 11.5% 5.8% 10.6% 1.2% 11.1% 100.0%

Difference

-0.3% -1.0% 0.0% 4.5% -0.6% -1.1% -0.4% 1.8% -1.2% -0.4% -1.3% 0.0%

Variance (percent difference)

-2.6% -25.1% -0.7% 19.6% -5.3% -38.3% -3.0% 45.6% -10.4% -24.6% -10.8% n/a

Points contribution Difference from All Households at Jun-2008

-0.7 -2.9 0.0 6.3 -0.8 -3.0 -0.7 2.3 -1.8 -1.1 -1.7 -4.2

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 79. Variance in weights: ''One parent households with one dependent child only'' from ''All Households'' Melbourne (June 2005) Expenditure Subgroup

One parent households with one dependent child only

All households

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

12.7% 2.8% 7.4% 22.9%

7.5% 0.0% -7.5% 0.0%

141.2% 0.7% -50.3% n/a

13.2 0.0 -9.8 3.5

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.1% 0.7% 11.8%

0.0% 0.0% 0.0%

-0.4% 6.7% n/a

-0.1 0.1 0.0

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

One parent with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

One parent households with one dependent child only

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

78.52 18.05 28.08 165.51 60.47 10.44 69.14 35.29 64.08 7.09 66.93 603.60

Difference

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Percent difference

43.10 18.29 14.59 43.18 35.87 15.08 38.43 1.27 43.79 7.10 46.34 307.03

-35.4% -50.3% -34.2% -20.7% -37.2% -59.1% -35.7% -3.5% -40.6% -50.0% -40.9% -33.7%

• Table 73: Expenditure – One Parent with One Child Average weekly household expenditure: comparison of ''One parent households with one dependent child only'' and ''All Households'' Melbourne (June 2005) All households

One parent households with one dependent child only

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

Expenditure Subgroup

91.27 20.16 52.86 164.30

Difference

Percent difference

$ -$ -$ -$

43.21 5.26 82.34 44.39

89.9% -20.7% -60.9% -21.3%

65.12 -$ 4.10 -$ 69.22 -$

36.53 1.88 38.41

-35.9% -31.4% -35.7%

• Table 74: Expenditure, subgroups – One Parent with One Child Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, One parent households with one dependent child only, Melbourne (June 2005) Expenditure Subgroup

All households

One parent households with one dependent child only

Percent, One parent households with one …

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

52.86 91.27 144.14

36.7% 63.3% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

65.12 4.10 69.22

94.1% 5.9% 100.0%

Ratio, One parent households with one dependent child only

0.58

15.89

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

One parent with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

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 W ith all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $142.31 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Couple with three or more dependent children only, Melbourne, Jun-2008, 181.9

Average weekly household expenditure on Housing = $382.40 (June 2005)

160 Index

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

140

15th Series starts

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for Couple with three or more dependent children only, Melbourne, Jun2008, 163.6

120 GST inclusion starts 14th Series starts

ar -1 M

ar -0 M

ar -0 8 M

ar -0 M

ar -0

5 M

ar -0 M

ar -0 3 M

ar -0 M

CPI, Australia , Jun-2008, 164.6

ar -0 0

ar -9 M

ar -9 7 M

ar -9 M

ar -9 5 M

ar -9 M

ar -9 2 M

ar -9 M

12th Series starts

100

13th Series starts

12th weight @ 1995

Quarter

• Figure 31: RPI Couple with three or more children

Selected data for the RPI limits and the CPI are shown in Table 76: 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.

Couple with three or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Couple with RPI Lower Limit, Couple with All Groups (? three or more dependent three or more dependent CPI) children only children only Melbourne 181.9 180.1 174.9 99.8 1.8 7.0 82.1 1.0% 4.0% 82.2% -0.2% -0.5% 20.8% -17.2% -10.3% 34.0% -0.5% -0.5% 19.1% -33.8% -11.7% 30.2%

162.0 160.3 155.3 99.8 1.6 6.6 62.2 1.0% 4.3% 62.3% -0.2% -0.2% 0.9% -14.7% -4.0% 1.5% -0.5% -0.3% -0.9% -31.8% -5.6% -1.4%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 76: RPI – CPI comparison – Couple with three or more children RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Couple with three or more dependent children only

RPI with Rental component All Groups (? only, Couple with three or CPI) more dependent children Melbourne only

173.6 172.3 167.4 99.9 1.3 6.2 73.7 0.7% 3.7% 73.8% -0.4% -0.7% 12.4% -37.0% -16.7% 20.3% -0.7% -0.8% 10.7% -49.7% -18.1% 16.9%

171.9 169.7 164.4 99.8 2.2 7.5 72.1 1.3% 4.6% 72.3% 0.1% 0.1% 10.9% 7.4% 2.8% 17.7% -0.2% 0.1% 9.1% -14.1% 1.1% 14.5%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Couple with three or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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. 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, ‐0.6 points, is the difference between the RPI baselines of 163.6 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008. Variance in weights: ''Couple with three or more dependent children only'' from ''All Households'' Melbourne (June 2005)

Expenditure Group

All households

Couple with three or more dependent children only

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

Food

13.4%

13.9%

0.5%

4.1%

1.1

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

4.0% 4.7% 22.9%

2.2% 5.3% 26.8%

-1.7% 0.6% 3.9%

-43.8% 13.7% 16.9%

-5.0 0.8 5.4

5 6

Household Furnishings, Supplies and Services Health

10.6% 2.8%

10.0% 2.4%

-0.6% -0.4%

-5.6% -14.4%

-0.8 -1.1

7 8

Transportation Communication

11.8% 4.0%

10.0% 3.2%

-1.8% -0.8%

-15.6% -19.9%

-3.5 -1.0

11.8% 1.6% 12.4% 100.0%

12.3% 3.4% 10.5% 100.0%

0.4% 1.9% -2.0% 0.0%

3.8% 119.8% -15.9% n/a

0.7 5.5 -2.5 -0.6

9 Recreation 10 Education 11 Financial and Insurance Services Total

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 79. Variance in weights: ''Couple with three or more dependent children only'' from ''All Households'' Melbourne (June 2005) Expenditure Subgroup

4.1 Rents

Couple with three or more dependent children only

All households

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

5.3%

2.7%

-2.6%

-48.7%

-4.6

4.2 Utilities 4.3 Other Housing Total

2.8% 14.8% 22.9%

2.2% 18.0% 22.9%

-0.6% 3.2% 0.0%

-21.8% 21.4% n/a

-1.3 4.2 -1.7

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.4% 0.4% 11.8%

0.3% -0.3% 0.0%

2.4% -41.1% n/a

0.5 -0.7 -0.2

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

Couple with three or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

Expenditure Group

All households

Food

121.62 $

198.47

76.84

63.2%

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

$ $ $

36.34 $ 42.66 $ 208.69 $

32.00 -$ 76.05 $ 382.40 $

4.35 33.38 173.71

-12.0% 78.2% 83.2%

5 6

Household Furnishings, Supplies and Services Health

$ $

96.34 $ 25.51 $

142.57 34.23

$ $

46.23 8.72

48.0% 34.2%

7 8

Transportation Communication

$ $

107.57 $ 36.55 $

142.31 45.92

$ $

34.74 9.37

32.3% 25.6%

$ $ $ $

107.87 14.19 113.27 910.63

175.49 48.91 149.44 1,427.78

$ $ $ $

67.62 34.72 36.17 517.15

62.7% 244.7% 31.9% 56.8%

9 Recreation 10 Education 11 Financial and Insurance Services Total

$ $ $ $

Difference

Percent difference

• Table 80: Expenditure – Couple with three or more children Average weekly household expenditure: comparison of ''Couple with three or more dependent children only'' and ''All Households'' Melbourne (June 2005)

Expenditure Subgroup

All households

Couple with three or more dependent children only

Difference

45.50 -$

Percent difference

4.1 Rents

48.06 $

2.56

-5.3%

4.2 Utilities 4.3 Other Housing Total

$ $ $

25.42 $ 135.20 $ 208.69 $

36.71 303.29 385.51

$ $ $

11.29 168.09 176.82

44.4% 124.3% 84.7%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

137.24 $ 4.64 -$ 141.88 $

35.58 1.33 34.25

35.0% -22.3% 31.8%

• Table 81: Expenditure, subgroups – Couple with three or more children Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple with three or more dependent children only, Melbourne (June 2005)

Expenditure Subgroup

All households

Couple with three or more dependent children only

Percent, Couple with three or more depen…

4.3 Other Housing

135.20 $

303.29

87.0%

4.1 Rents Total

$ $

48.06 $ 183.27 $

45.50 348.80

13.0% 100.0%

7.1 Private motoring

101.65 $

137.24

96.7%

7.2 Urban transport fares Total

$ $

5.97 $ 107.63 $

4.64 141.88

3.3% 100.0%

Ratio, Couple with three or more dependent children only

6.67

29.58

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

Couple with three or more children

Melbourne, September 2008

Relative Price Indexes

Household family composition

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $125.42 (June 2005) Average weekly household expenditure on Housing = $257.78 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Couple with one dependent child only, Melbourne, Jun2008, 180.1

160 RPI, All expenditures on House Ownership and Private Motoring combined, Couple with one dependent child only, Melbourne, Jun-2008, 160.4

Index

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for Couple with one dependent child only, Melbourne, Jun-2008, 162.9

GST inclusion starts 14th Series starts

0 ar -1 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 M

ar -0 4 M

ar -0 3 M

ar -0 M

ar -0 1

ar -0 0

CPI, Australia , Jun-2008, 164.6

ar -9

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 M

ar -9 3 M

ar -9 2 M

ar -9 M

ar -9 0 M

12th weight @ 1995 12th Series starts

100

13th Series starts

Quarter

• Figure 32: RPI Couple with one child

Selected data for the RPI limits and the CPI are shown in Table 83: 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.

Couple with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Couple with RPI Lower Limit, Couple with one dependent child only one dependent child only 180.1 178.1 173.0 99.8 2.0 7.1 80.3 1.1% 4.1% 80.5% -0.1% -0.3% 19.1% -5.3% -7.8% 31.1% -0.4% -0.4% 17.3% -24.3% -9.3% 27.4%

160.4 158.5 153.7 99.8 1.9 6.7 60.6 1.2% 4.4% 60.8% 0.0% 0.0% -0.6% -0.7% -0.9% -1.0% -0.3% -0.1% -2.4% -20.6% -2.5% -3.7%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 83: RPI – CPI comparison – Couple with one child RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport RPI with Rental component All Groups (? Fares only, Couple with one only, Couple with one CPI) dependent child only dependent child only Melbourne 172.7 171.1 166.3 99.8 1.6 6.4 72.9 0.9% 3.8% 73.0% -0.3% -0.6% 11.6% -22.5% -13.5% 18.9% -0.6% -0.7% 9.9% -38.1% -14.9% 15.6%

170.3 167.9 162.7 99.7 2.4 7.6 70.6 1.4% 4.7% 70.7% 0.2% 0.2% 9.4% 19.8% 5.3% 15.3% -0.1% 0.2% 7.6% -4.2% 3.5% 12.1%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Couple with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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. 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, ‐1.2 points, is the difference between the RPI baselines of 162.9 for this household group and 164.1 for All Households Melbourne (~ CPI for Melbourne) both at June 2008. Variance in weights: ''Couple with one dependent child only'' from ''All Households'' Melbourne (June 2005)

Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

All households

Couple with one dependent child only

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

13.0% 3.4% 4.8% 22.9% 11.6% 2.8% 11.1% 3.9% 11.0% 1.8% 13.7% 100.0%

Difference

-0.3% -0.5% 0.1% -0.1% 1.1% 0.0% -0.7% -0.2% -0.9% 0.3% 1.3% 0.0%

Variance (percent difference)

-2.5% -13.7% 1.8% -0.2% 10.0% -1.5% -5.8% -3.8% -7.4% 18.1% 10.2% n/a

Points contribution Difference from All Households at Jun-2008

-0.6 -1.6 0.1 -0.1 1.5 -0.1 -1.3 -0.2 -1.3 0.8 1.6 -1.2

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 86. Variance in weights: ''Couple with one dependent child only'' from ''All Households'' Melbourne (June 2005)

Expenditure Subgroup

All households

Couple with one dependent child only

Difference

Variance (percent difference)

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

4.2% 2.7% 16.0% 22.9%

-1.1% -0.1% 1.2% 0.0%

-20.4% -3.4% 7.9% n/a

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

0.0% 0.0% 0.0%

0.0% -0.5% n/a

Points contribution Difference from All Households at Jun-2008

-1.9 -0.2 1.5 -0.6 0.0 0.0 0.0

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

Couple with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

Couple with one dependent child only

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

$ $ $ $ $ $ $ $ $ $ $ $

146.89 38.82 53.75 257.78 131.17 31.12 125.42 43.54 123.68 20.74 154.53 1,127.44

Difference

$ $ $ $ $ $ $ $ $ $ $ $

Percent difference

25.26 2.48 11.09 49.09 34.82 5.60 17.85 6.99 15.80 6.56 41.26 216.81

20.8% 6.8% 26.0% 23.5% 36.1% 22.0% 16.6% 19.1% 14.7% 46.2% 36.4% 23.8%

• Table 87: Expenditure – Couple with one child Average weekly household expenditure: comparison of ''Couple with one dependent child only'' and ''All Households'' Melbourne (June 2005) Expenditure Subgroup

All households

Couple with one dependent child only

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

47.33 30.40 180.55 258.27

Difference

Percent difference

-$ $ $ $

0.73 4.97 45.34 49.58

-1.5% 19.6% 33.5% 23.8%

118.55 $ 6.93 $ 125.48 $

16.90 0.95 17.85

16.6% 16.0% 16.6%

• Table 88: Expenditure, subgroups – Couple with one child Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple with one dependent child only, Melbourne (June 2005) Expenditure Subgroup

All households

Couple with one dependent child only

Percent, Couple Ratio, Couple with with one one dependent dependent child only child…

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

180.55 47.33 227.88

79.2% 20.8% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

118.55 6.93 125.48

94.5% 5.5% 100.0%

3.81

17.11

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

Couple with one child

Melbourne, September 2008

Relative Price Indexes

Household family composition

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $51.18 (June 2005)

180

Average weekly household expenditure on Housing = $140.68 (June 2005)

RPI, All expenditures on Rental and Transport Fares combined, Lone person household, Melbourne, Jun-2008, 177.7

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Lone person household, Melbourne, Jun2008, 158.1

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for Lone person household, Melbourne, Jun2008, 162.5

GST inclusion starts 14th Series starts

ar -1 M

ar -0 M

ar -0 8 M

ar -0 M

ar -0

5 M

ar -0 M

ar -0 3 M

ar -0

1 ar -0 M

ar -0 0

CPI, Australia , Jun-2008, 164.6

ar -9

ar -9 M

ar -9 7 M

ar -9 M

ar -9 5 M

ar -9 M

ar -9 2 M

ar -9 M

12th weight @ 1995 12th Series starts

100

13th Series starts

Quarter

• Figure 33: RPI Lone person

Selected data for the RPI limits and the CPI are shown in Table 90: 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.

Lone person

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Lone person household

RPI Lower Limit, Lone person household

177.7 175.9 170.6 99.6 1.9 7.1 78.2 1.1% 4.2% 78.5% -0.1% -0.2% 17.1% -10.6% -5.5% 27.9% -0.4% -0.3% 15.4% -28.5% -7.1% 24.3%

158.1 156.4 151.3 99.6 1.7 6.8 58.5 1.1% 4.5% 58.7% -0.1% 0.1% -2.6% -6.5% 1.7% -4.3% -0.4% 0.0% -4.4% -25.3% 0.1% -7.0%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 90: RPI – CPI comparison – Lone person RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Lone person household

RPI with Rental component only, Lone person household

All Groups (? CPI) Melbourne

168.1 165.9 160.5 99.5 2.2 7.7 68.6 1.3% 4.8% 68.9% 0.2% 0.3% 7.5% 14.0% 7.6% 12.3% -0.1% 0.3% 5.8% -8.8% 5.9% 9.1%

162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

172.1 170.5 165.5 99.6 1.5 6.6 72.4 0.9% 4.0% 72.7% -0.3% -0.4% 11.3% -24.0% -9.8% 18.5% -0.6% -0.5% 9.6% -39.3% -11.3% 15.2%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Lone person

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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

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

Expenditure Group

All Lone person household households

Difference

Variance (percent difference)

Difference from All Households at Jun-2008

Food

13.4%

11.6%

-1.7%

-13.0%

-3.4

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

4.0% 4.7% 22.9%

4.7% 3.6% 28.8%

0.7% -1.1% 5.9%

17.8% -24.2% 25.9%

2.0 -1.4 8.3

5 6

Household Furnishings, Supplies and Services Health

10.6% 2.8%

10.4% 3.1%

-0.2% 0.3%

-1.7% 11.3%

-0.2 0.9

7 8

Transportation Communication

11.8% 4.0%

10.5% 4.5%

-1.3% 0.5%

-11.2% 12.6%

-2.5 0.6

11.8% 1.6% 12.4% 100.0%

10.2% 0.6% 12.0% 100.0%

-1.6% -1.0% -0.5% 0.0%

-13.8% -63.1% -3.9% n/a

-2.5 -2.9 -0.6 -1.7

9 Recreation 10 Education 11 Financial and Insurance Services Total

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 93. Points contribution

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

Expenditure Subgroup

4.1 Rents

All Lone person household households

Difference

Variance (percent difference)

Difference from All Households at Jun-2008

5.3%

7.9%

2.6%

49.8%

4.7

4.2 Utilities 4.3 Other Housing Total

2.8% 14.8% 22.9%

2.7% 12.3% 22.9%

-0.1% -2.6% 0.0%

-2.0% -17.3% n/a

-0.1 -3.4 1.2

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.0% 0.8% 11.8%

-0.2% 0.2% 0.0%

-1.5% 26.3% n/a

-0.3 0.5 0.2

• Table 93: Weights variance, subgroups – Lone person

Lone person

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

All Lone person household households

Difference

Percent difference

Food

121.62 $

56.64 -$

64.98

-53.4%

2 3 4

Alcohol and Tobacco Clothing and Footwear Housing

$ $ $

36.34 $ 42.66 $ 208.69 $

22.93 -$ 17.32 -$ 140.68 -$

13.41 25.34 68.01

-36.9% -59.4% -32.6%

5 6

Household Furnishings, Supplies and Services Health

$ $

96.34 $ 25.51 $

50.73 -$ 15.21 -$

45.62 10.30

-47.3% -40.4%

7 8

Transportation Communication

$ $

107.57 $ 36.55 $

51.18 -$ 22.05 -$

56.39 14.50

-52.4% -39.7%

$ $ $ $

107.87 14.19 113.27 910.63

58.05 11.39 54.96 422.95

-53.8% -80.3% -48.5% -46.4%

9 Recreation 10 Education 11 Financial and Insurance Services Total

$ $ $ $

49.82 2.80 58.31 487.68

-$ -$ -$ -$

• Table 94: Expenditure – Lone person Average weekly household expenditure: comparison of ''Lone person household'' and ''All Households'' Melbourne (June 2005)

Expenditure Subgroup

All Lone person household households

48.45

Difference

Percent difference

4.1 Rents

48.06 $

0.39

0.8%

4.2 Utilities 4.3 Other Housing Total

$ $ $

25.42 $ 135.20 $ 208.69 $

16.76 -$ 75.19 -$ 140.40 -$

8.67 60.01 68.29

-34.1% -44.4% -32.7%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

47.73 -$ 3.60 -$ 51.33 -$

53.93 2.37 56.30

-53.0% -39.7% -52.3%

• Table 95: Expenditure, subgroups – Lone person Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Lone person household, Melbourne (June 2005)

Expenditure Subgroup

All Lone person household households

Percent, Lone Ratio, Lone person person household household

4.3 Other Housing

135.20 $

75.19

60.8%

4.1 Rents Total

$ $

48.06 $ 183.27 $

48.45 123.64

39.2% 100.0%

7.1 Private motoring

101.65 $

47.73

93.0%

7.2 Urban transport fares Total

$ $

5.97 $ 107.63 $

3.60 51.33

7.0% 100.0%

1.55

13.26

• Table 96: Subgroups expenditure comparison – Lone person

Lone person

Melbourne, September 2008

Relative Price Indexes

Household family composition

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $110.57 (June 2005) Average weekly household expenditure on Housing = $193.63 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Couple only, Melbourne, Jun2008, 181.4

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Couple only, Melbourne, Jun-2008, 161.8

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

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

GST inclusion starts 14th Series starts

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 2

ar -0 3 M

ar -0 0

ar -0 1

CPI, Australia , Jun-2008, 164.6

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5

ar -9 4 M

ar -9 3 M

ar -9 2 M

ar -9 1 M

ar -9 0 M

12th weight @ 1995 12th Series starts

100

ar -9 9

13th Series starts

Quarter

• Figure 34: RPI Couple Only

RPI Couple Only

Melbourne, September 2008

Relative Price Indexes

Household family composition

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Couple only RPI Lower Limit, Couple only

181.4 179.3 174.3 99.7 2.0 7.1 81.7 1.1% 4.1% 81.9% 0.0% -0.4% 20.5% -3.5% -8.3% 33.5% -0.3% -0.4% 18.8% -22.8% -9.8% 29.7%

161.8 159.9 155.0 99.7 1.9 6.8 62.1 1.2% 4.4% 62.3% 0.0% -0.1% 0.9% 1.5% -1.5% 1.4% -0.3% -0.1% -0.9% -18.8% -3.1% -1.4%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 97: RPI – CPI comparison – Couple Only RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Couple only

RPI with Rental component only, Couple only

173.8 172.2 167.4 99.8 1.6 6.4 74.0 0.9% 3.8% 74.2% -0.2% -0.6% 12.9% -21.0% -14.1% 21.0% -0.5% -0.7% 11.1% -36.8% -15.5% 17.6%

171.5 169.1 163.9 99.7 2.4 7.6 71.8 1.4% 4.6% 72.1% 0.3% 0.2% 10.7% 21.9% 4.8% 17.4% 0.0% 0.1% 8.9% -2.6% 3.1% 14.1%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

RPI Couple Only

Melbourne, September 2008

Relative Price Indexes

Household family composition

Weighting comparison tables 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

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

Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

All households

Couple only

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

13.2% 4.0% 4.3% 21.6% 11.8% 3.4% 12.3% 3.5% 12.9% 0.6% 12.4% 100.0%

Difference

-0.2% 0.0% -0.4% -1.3% 1.2% 0.6% 0.5% -0.5% 1.0% -1.0% 0.0% 0.0%

Variance (percent difference)

Difference from All Households at Jun-2008

-1.4% 0.2% -8.1% -5.7% 11.4% 21.5% 4.4% -11.8% 8.5% -61.6% -0.3% n/a

-0.4 0.0 -0.5 -1.8 1.7 1.7 1.0 -0.6 1.5 -2.8 0.0 -0.2

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 100. Points contribution

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

Expenditure Subgroup

All households

Couple only

Difference

Variance (percent difference)

Difference from All Households at Jun-2008

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

3.6% 2.9% 16.4% 22.9%

-1.6% 0.1% 1.6% 0.0%

-31.2% 2.4% 10.6% n/a

-2.9 0.1 2.1 -0.7

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.3% 0.5% 11.8%

0.2% -0.2% 0.0%

1.4% -23.6% n/a

0.3 -0.4 -0.1

• Table 100: Weights variance, subgroups – Couple Only

RPI Couple Only

Melbourne, September 2008

Relative Price Indexes

Household family composition

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

Couple only

$ $ $ $ $ $ $ $ $ $ $ $

118.00 35.82 38.60 193.63 105.62 30.50 110.57 31.73 115.22 5.36 111.13 896.18

Difference

-$ -$ -$ -$ $ $ $ -$ $ -$ -$ -$

Percent difference

3.63 0.52 4.06 15.06 9.27 4.98 3.00 4.82 7.34 8.83 2.14 14.45

-3.0% -1.4% -9.5% -7.2% 9.6% 19.5% 2.8% -13.2% 6.8% -62.2% -1.9% -1.6%

• Table 101: Expenditure – Couple Only

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

Expenditure Subgroup

All households

Couple only

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

30.70 24.18 138.94 193.82

Difference

Percent difference

-$ -$ $ -$

17.36 1.25 3.73 14.87

-36.1% -4.9% 2.8% -7.1%

105.72 $ 4.68 -$ 110.40 $

4.07 1.29 2.78

4.0% -21.6% 2.6%

• Table 102: Expenditure, subgroups – Couple Only Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Couple only, Melbourne (June 2005) Expenditure Subgroup

All households

Couple only

Percent, Couple Ratio, Couple only only

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

138.94 30.70 169.64

81.9% 18.1% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

105.72 4.68 110.40

95.8% 4.2% 100.0%

4.53

22.57

• Table 103: Subgroups expenditure comparison – Couple Only

RPI Couple Only

Melbourne, September 2008

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $134.40 (June 2005)

180

RPI, All expenditures on Rental and Transport Fares combined, Wage and salary, Melbourne, Jun-2008, 180.6

Average weekly household expenditure on Housing = $260.29 (June 2005)

160 Index RPI, All expenditures on House Ownership and Private Motoring combined, Wage and salary, Melbourne, Jun-2008, 160.8

140

15th Series starts

120

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0

RPI baseline for Wage and salary, Melbourne, Jun-2008, 163.7

GST inclusion starts 14th Series starts

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 3 M

ar -0 2 M

ar -0 0

ar -0 1

CPI, Australia , Jun-2008, 164.6

ar -9 8 M

ar -9 7 M

ar -9 6 M

ar -9 5 M

ar -9 4 M

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ar -9 0 M

12th weight @ 1995 12th Series starts

100

ar -9 9

13th Series starts

Quarter

• Figure 35: RPI Wage and Salary

Wage and Salary

Melbourne, September 2008

Relative Price Indexes

Income types

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Upper Limit, Wage and RPI Lower Limit, Wage and salary salary 180.6 178.6 173.4 99.7 2.0 7.2 80.9 1.1% 4.1% 81.2% -0.1% -0.3% 19.8% -6.4% -6.9% 32.3% -0.4% -0.4% 18.0% -25.2% -8.5% 28.6%

160.8 159.0 154.0 99.6 1.8 6.8 61.1 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% -2.2% -0.1% 0.0% -0.3% -0.1% -1.8% -21.8% -1.7% -2.8%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 104: RPI – CPI comparison – Wage and Salary RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport RPI with Rental component Fares only, Wage and salary only, Wage and salary 173.1 171.5 166.6 99.7 1.6 6.5 73.4 0.9% 3.9% 73.6% -0.3% -0.6% 12.2% -23.0% -12.5% 19.9% -0.6% -0.6% 10.5% -38.4% -13.9% 16.6%

169.7 167.4 162.1 99.6 2.3 7.6 70.1 1.4% 4.7% 70.4% 0.2% 0.2% 9.0% 16.7% 5.4% 14.6% -0.1% 0.2% 7.2% -6.7% 3.7% 11.4%

CPI, Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Wage and Salary

Melbourne, September 2008

Relative Price Indexes

Income types

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

Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

Wage and salary

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

12.8% 4.0% 4.8% 23.2% 10.1% 2.5% 12.0% 3.9% 12.1% 1.7% 12.8% 100.0%

Difference

-0.6% 0.0% 0.1% 0.3% -0.5% -0.3% 0.2% -0.1% 0.3% 0.2% 0.3% 0.0%

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

-4.2% -0.4% 3.1% 1.4% -4.3% -10.5% 1.6% -2.4% 2.4% 11.0% 2.7% n/a

-1.1 0.0 0.2 0.4 -0.6 -0.8 0.4 -0.1 0.4 0.5 0.4 -0.4

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 107. Variance in weights: ''Employees Wages and salaries'' from ''All Households'' Melbourne (June 2005)

Expenditure Subgroup

All households

Wage and salary

Difference

Variance (percent difference)

Points contribution Difference from All Households at Jun-2008

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

4.9% 2.5% 15.5% 22.9%

-0.3% -0.3% 0.7% 0.0%

-6.6% -11.2% 4.5% n/a

-0.6 -0.6 0.9 -0.4

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.1% 0.7% 11.8%

-0.1% 0.1% 0.0%

-0.5% 9.2% n/a

-0.1 0.2 0.1

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

Wage and Salary

Melbourne, September 2008

Relative Price Indexes

Income types

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

Wage and salary

$ $ $ $ $ $ $ $ $ $ $ $

143.26 44.52 54.12 260.29 113.38 28.09 134.40 43.88 135.83 19.37 143.05 1,120.18

Difference

$ $ $ $ $ $ $ $ $ $ $ $

Percent difference

21.63 8.18 11.46 51.60 17.04 2.58 26.82 7.32 27.96 5.18 29.78 209.55

17.8% 22.5% 26.9% 24.7% 17.7% 10.1% 24.9% 20.0% 25.9% 36.5% 26.3% 23.0%

• Table 108: Expenditure – Wage and Salary Average weekly household expenditure: comparison of ''Employees Wages and salaries'' and ''All Households'' Melbourne (June 2005) Expenditure Subgroup

All households

Wage and salary

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

56.18 28.24 176.71 261.12

Difference

Percent difference

$ $ $ $

8.12 2.82 41.50 52.44

16.9% 11.1% 30.7% 25.1%

126.42 $ 8.15 $ 134.57 $

24.77 2.18 26.94

24.4% 36.5% 25.0%

• Table 109: Expenditure, subgroups – Wage and Salary Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Wage and salary, Melbourne (June 2005) Expenditure Subgroup

All households

Wage and salary

Percent, Wage and salary

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

176.71 56.18 232.88

75.9% 24.1% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

126.42 8.15 134.57

93.9% 6.1% 100.0%

Ratio, Wage and salary

3.15

15.51

• Table 110: Subgroups expenditure comparison – Wage and Salary

Wage and Salary

Melbourne, September 2008

Relative Price Indexes

Income types

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 With all Housing expenditure (excluding Utilities) on Rental payments and all Transportation expenditure on Urban Transport Average weekly household expenditure on Transportation = $105.90 (June 2005) Average weekly household expenditure on Housing = $167.36 (June 2005)

180

160 Index

RPI, All expenditures on Rental and Transport Fares combined, Other income, Melbourne, Jun2008, 184.8

RPI, All expenditures on House Ownership and Private Motoring combined, Other income, Melbourne, Jun-2008, 165.5

140

15th Series starts

RPI, All expenditures on Rental and Transport Fares combined, All households, Australia, Jun2008, 177.0 RPI baseline for Other income, Melbourne, Jun-2008, 167.3

120 GST inclusion starts 14th Series starts

ar -1 0 M

ar -0 9 M

ar -0 8 M

ar -0 7 M

ar -0 6 M

ar -0 5 M

ar -0 4 M

ar -0 3 M

ar -0 2 M

ar -0 0

ar -0 1

CPI, Australia , Jun-2008, 164.6

ar -9 8 M

ar -9 7 M

ar -9 6

ar -9 5 M

ar -9 4 M

ar -9 2 M

ar -9 1 M

ar -9 0 M

ar -9 3

12th Series starts

100

ar -9 9

13th Series starts

12th weight @ 1995

Quarter

• Figure 36: RPI Superannuation or other private income

Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Income types

RPI – CPI comparison tables 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. RPI Upper and Lower Limits compared to the CPI

RPI Upper and Lower Limits / CPI

RPI Upper Limit, Other income

Quarter

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

RPI Lower Limit, Other income

184.8 182.7 177.8 99.7 2.1 7.0 85.1 1.1% 3.9% 85.4% -0.1% -0.5% 24.0% -4.4% -11.3% 39.2% -0.3% -0.6% 22.3% -23.6% -12.7% 35.3%

165.5 163.5 158.8 99.6 2.0 6.7 65.8 1.2% 4.2% 66.1% 0.0% -0.2% 4.7% 1.0% -4.8% 7.7% -0.3% -0.3% 2.9% -19.2% -6.3% 4.7%

All Groups (? CPI) Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

• Table 111: RPI – CPI comparison – Superannuation or other private income RPI Upper Limit components (Urban Transport Fares and Rental) compared to the CPI

RPI Upper Limit components / CPI

Price Index, All CPI Groups

Points increase

Percent increase Difference from CPI Melbourne percent increase Percent greater than CPI Melbourne increase Difference from CPI Australia percent increase Percent greater than CPI Australia increase

Quarter

RPI with Urban Transport Fares only, Other income

RPI with Rental component only, Other income

176.9 175.3 170.6 99.7 1.6 6.3 77.2 0.9% 3.7% 77.4% -0.3% -0.8% 16.1% -21.5% -17.2% 26.2% -0.6% -0.8% 14.3% -37.2% -18.5% 22.7%

173.7 171.3 166.3 99.6 2.4 7.4 74.1 1.4% 4.5% 74.4% 0.2% 0.0% 13.0% 18.7% 0.7% 21.2% -0.1% 0.0% 11.2% -5.1% -0.9% 17.8%

CPI, Melbourne 162.5 160.6 155.6 100.7 1.9 6.9 61.8 1.2% 4.4% 61.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -0.3% -0.1% -1.8% -20.0% -1.6% -2.8%

CPI, Australia 164.6 162.2 157.5 100.9 2.4 7.1 63.7 1.5% 4.5% 63.1% 0.3% 0.1% 1.8% 25.1% 1.7% 2.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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

Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Income types

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

Points contribution

Variance (percent difference)

Difference from All Households at Jun-2008

Expenditure Group

1 2 3 4 5 6 7 8 9 10 11

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

All households

Other income

13.4% 4.0% 4.7% 22.9% 10.6% 2.8% 11.8% 4.0% 11.8% 1.6% 12.4% 100.0%

Difference

12.9% 3.5% 4.5% 19.1% 12.0% 5.3% 12.1% 3.6% 14.2% 1.6% 11.2% 100.0%

-0.4% -0.5% -0.2% -3.8% 1.4% 2.5% 0.3% -0.4% 2.3% 0.0% -1.2% 0.0%

-3.1% -13.1% -4.3% -16.5% 13.4% 89.1% 2.6% -10.8% 19.5% 1.9% -9.6% n/a

-0.8 -1.5 -0.2 -5.3 2.0 7.0 0.6 -0.5 3.5 0.1 -1.5 3.2

• 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. The equivalent data set for the Housing and Transportation subgroups is shown in Table 114. Variance in weights: ''Superannuation or other private income'' from ''All Households'' Melbourne (June 2005)

Points contribution

Variance (percent difference)

Difference from All Households at Jun-2008

Expenditure Subgroup

All households

Other income

Difference

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

5.3% 2.8% 14.8% 22.9%

3.1% 3.5% 16.4% 22.9%

-2.2% 0.7% 1.5% 0.0%

-42.2% 25.0% 10.3% n/a

-4.0 1.4 2.0 -0.5

7.1 Private motoring 7.2 Urban transport fares Total

11.2% 0.7% 11.8%

11.3% 0.5% 11.8%

0.2% -0.2% 0.0%

1.6% -26.6% n/a

0.3 -0.5 -0.2

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

Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Income types

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

1 2 3 4 5 6 7 8 9 10 11

Expenditure Group

All households

Food Alcohol and Tobacco Clothing and Footwear Housing Household Furnishings, Supplies and Services Health Transportation Communication Recreation Education Financial and Insurance Services Total

$ $ $ $ $ $ $ $ $ $ $ $

121.62 36.34 42.66 208.69 96.34 25.51 107.57 36.55 107.87 14.19 113.27 910.63

Other income

$ $ $ $ $ $ $ $ $ $ $ $

113.11 30.31 39.19 167.36 104.84 46.30 105.90 31.29 123.69 13.88 98.24 874.11

Difference

-$ -$ -$ -$ $ $ -$ -$ $ -$ -$ -$

Percent difference

8.52 6.03 3.47 41.33 8.50 20.78 1.67 5.26 15.82 0.31 15.03 36.52

-7.0% -16.6% -8.1% -19.8% 8.8% 81.5% -1.6% -14.4% 14.7% -2.2% -13.3% -4.0%

• Table 115: Expenditure – Superannuation or other private income Average weekly household expenditure: comparison of ''Superannuation or other private income'' and ''All Households'' Melbourne (June 2005) Expenditure Subgroup

All households

Other income

4.1 Rents 4.2 Utilities 4.3 Other Housing Total

$ $ $ $

48.06 25.42 135.20 208.69

$ $ $ $

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

22.19 25.37 119.08 166.64

Difference

Percent difference

-$ -$ -$ -$

25.87 0.05 16.13 42.04

-53.8% -0.2% -11.9% -20.1%

101.41 -$ 4.30 -$ 105.71 -$

0.25 1.67 1.92

-0.2% -27.9% -1.8%

• Table 116: Expenditure, subgroups – Superannuation or Other Private Income Average weekly household expenditure: comparison of Housing and Transport subgroup expenditures, Other income, Melbourne (June 2005) Expenditure Subgroup

All households

Other income

Percent, Other income

4.3 Other Housing 4.1 Rents Total

$ $ $

135.20 $ 48.06 $ 183.27 $

119.08 22.19 141.27

84.3% 15.7% 100.0%

7.1 Private motoring 7.2 Urban transport fares Total

$ $ $

101.65 $ 5.97 $ 107.63 $

101.41 4.30 105.71

95.9% 4.1% 100.0%

Ratio, Other income

5.37

23.56

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

Superannuation or other private income

Melbourne, September 2008

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. 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, approximately 3% and 7% 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 lower ratio than All Households Australia.

Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Summary

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. 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, approximately 10% and 14% greater than the All Households RPI Upper Limit increase, respectively. Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Summary

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. 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, approximately 7% and 11% greater than the All Households RPI Upper Limit increase, respectively. 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. 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, approximately 4% and 8% 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 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. 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, approximately 10% and 14% greater than the All Households RPI Upper Limit increase, respectively. 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. Superannuation or other private income

Melbourne, September 2008

Relative Price Indexes

Summary

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, approximately 9% and 12% greater than the All Households RPI Upper Limit increase, respectively. 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. 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, approximately 15% and 19% greater than the All Households RPI Upper Limit increase, respectively. 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.

Superannuation or other private income

Melbourne, September 2008

Appendices

Appendix 1

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/abs@.nsf/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/abs@.nsf/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/abs@.nsf/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

Appendices

Appendix 1

6446.0.55.001 Consumer Price Index: Concordance with Household Expenditure Classification, Australia 6446055001sept05.xls http://www.abs.gov.au/AUSSTATS/abs@.nsf/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/abs@.nsf/66f306f503e529a5ca25697e0017661f/db7a365fa6856480ca25705f001e cafe!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

Appendices

Appendix 2

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 Household Group Selection Grid 2003-04 Headers Couple only Couple with one dependent child only Couple with two dependent children only Couple with three or more dependent children only Lone person household One parent, one family households with one dependent child only One parent, one family households with two dependent child only One parent, one family households with three or more dependent children only Other All households Age/disability pension Unemployment/ sickness/ education allowance

1998-99 Headers Couple only Couple with one dependent child only Couple with two dependent children only Couple with three or more dependent children only Lone person household One parent, one family households with one dependent child only One parent, one family households with two or more dependent children

Pre1998 SVDP Weightings Couple no children Couple with one child Couple with two children

[Blank]

All other household types All households Age and disability support pensions Unemployment, education and sickness allowances

[Blank] [All Households] Aged/Disability Pensioner

Other

Other government pensions and allowances Other government pensions and allowances

Couple with three or more children Lone person Lone parent one child Lone person two children or more

Unemployment benefits

[Total government pensions and allowances] [Employees Wages and salaries]

[Blank]

[Other principal source of income] [Blank] All households Wage and salary Own unincorporated business income Other income

[Blank] [Blank] [All Households] [Blank] [Blank] [Blank]

[Government pensions and allowances] [Household has zero or negative income] [Blank] All households

[Own business, interest or rent, etc.] [Superannuation or other private income] All households Employees Wages and salaries Own business, interest or rent, etc. Superannuation or other private income [Unemployment, education and sickness allowances] [Age and disability support pensions] [Other government pensions and allowances] All households

[Blank] [Blank] [Blank] [Blank]

• Table 118: Household Group Selection details

Tables for reference

100

Melbourne, September 2008

Appendices

Appendix 2

Metcard fares http://www.metlinkmelbourne.com.au/fares_tickets/metropolitan_fares_and_tickets/metcard_fares

Metcard fares: effective until 31 December 2008 Zone 1

Zone 2

Zone 1+2

Value Metcard option

2 hour

Full fare

$3.50

$2.70

$5.50

Daily

Concession Full fare

$2.20 $6.50

$1.60 $4.60

$3.10 $10.10

10 x 2 hour

Concession Full fare

$3.50 $28.00

$2.60 $19.20

5 x Daily $5.30 $47.40 -

5 x Daily

Concession Full fare

$14.00 $28.00

$9.60 $19.20

$23.70 $47.40 -

Weekly

Concession Full fare

$14.00 $28.00

$9.60 $19.20

$23.70 $47.40 -

Monthly

Concession Full fare

$14.00 $104.40

$9.60 $70.00

$23.70 $161.00 -

Yearly

Concession Full fare

$52.20 $1,117

$35.00 $748

$80.50 $1,722 -

10 x 2 hour

(concession not available)

Other Metcard products: effective until 31 December 2008 Full Fare

Concession

City Saver

Value Metcard option $1.50 City Saver x 10

$2.60

(within City Saver area) City Saver x 10

$20.80

$10.40 -

$9.50

$4.75 -

(within City Saver area) Off Peak Daily (Zones 1 + 2) Seniors Daily

$3.30 -

(Zones 1 + 2) 5 x Seniors Daily

$16.50 -

(Zones 1 + 2) Sunday Saver

$2.90 -

(Zones 1 + 2) 5 x Weekend Daily (Zones 1 + 2) 10 x Early Bird

(Zones 1 + 2) Group Traveller

5 x Weekend Daily

$14.50 -

$27.20 -

(Zones 1 + 2)

Student Concessions 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. 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 Resident of Zone 1 Resident of Zone 2 (including Bacchus Marsh)

2008 Half-Yearly Student Pass

$391 $391

$203.20 $203.20

• Table 119: Melbourne Metcard fares

Tables for reference

101

Melbourne, September 2008

Appendices

Appendix 2

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

102

Melbourne, September 2008

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

• other government transfer payment recipients. 20

Selected ABS Definitions and Explanations

103

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Endnotes

Appendix 2

Endnotes

ABS 2005 (a), p.3

Ibid, p.1

ABS 2005 (b), p.47

4 5

Ibid, p.53

ABS 2005 (c)

ABS 2005 (d), p. 5

ABS 2005 (b), p. 46

Ibid, p.47

ABS 2005 (e), p. 37

Ibid, p. 42

ABS 2005 (b), p. 123

Ibid.

ABS 2006 (a)

14 15

ABS 2006 (b)

ABS 2006 (c)

ABS 2005 (b), p. 123

ABS 2008

ABS 2005 (a), p. 7

ABS 2005 (b), p. 123

Ibid, p. 122

104

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