The Australian Bureau of Statistics (ABS) is moving to monthly reporting of inflation data. What does this mean for everyday Australians?
Earlier this month, the ABS announced it would begin reporting the Consumer Price Index (CPI) figures monthly, giving Australian households, businesses and financial institutions a much timelier look at where inflation is heading.
Australia was one of the few developed countries that didn’t already have monthly inflation reporting in place.
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Statistician Dr David Gruen says new data collection avenues have made monthly CPI reporting possible.
“The monthly CPI indicator has been made feasible by using new data sources to reduce data collection costs, particularly scanner data and web-scraping techniques to provide high frequency data at lower cost,” he says.
“The use of new data sources has seen the ABS generate a range of timely new insights across the economy without asking more of Australian businesses and households.”
However, Dr Gruen also noted the that quarterly figure would still drive most Reserve Bank of Australia (RBA) interest rate decisions, but monthly numbers could give advance warning.
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“One important point of distinction with the monthly indicator is that, while it will include prices for all the items in the CPI basket, not all these prices will be updated each month” he said.
“The quarterly CPI will continue to be Australia’s key measure of inflation with the new monthly indicator an aide to this, providing quicker insights.”
The quarterly Consumer Price Index (CPI) provides a general measure of prices for goods and services purchased by Australian households. Changes in the CPI provide a measure of household inflation.
Moving to monthly reporting will give ordinary Australians quicker access to inflation information, making household budgeting easier.
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The quarterly CPI is also used to adjust a range of government pensions and allowances, including the Age Pension. As yet, there’s no indication whether the government intends to link pension rates to the monthly figures, but it seems unlikely.
However, assistant treasurer Andrew Leigh told The New Daily he welcomed the ABS announcement.
“Right now, Australia measures inflation every three months. Every other G20 country measures it monthly” he said.
“I’m pleased that they’ll be producing a new monthly CPI indicator.”
Do you think monthly CPI reporting will benefit you? Do you think the government would ever make monthly pension adjustments? Let us know in the comments section below.
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