The Consumer Price Index (CPI) rose 0.8 per cent in the June 2021 quarter, according to the latest data from the Australian Bureau of Statistics (ABS).
Head of Prices Statistics at the ABS, Michelle Marquardt said: “Rising fuel prices accounted for much of the increase in the June quarter CPI, with prices surpassing pre-pandemic levels”.
The most significant price rises in the June quarter were automotive fuel (+6.5 per cent) and medical and hospital services (+2.4 per cent) due to the annual increase in private health insurance premiums. Electricity prices (+3. 3 per cent) also rose due to the continued unwinding of the Western Australian Government’s $600 electricity credit.
Price rises were seen across a range of food items including vegetables (+5.5 per cent), fruit (+4.7 per cent), and beef (+3.6 per cent) due to a variety of factors including flooding in growing regions of NSW, a shortage of pickers and lower supply of beef as farmers re-stock. Motor vehicle prices rose (+2.2 per cent) due to increased demand combined with supply constraints such as the global semi-conductor shortage.
Government support schemes continued to be a factor in the June quarter. Prices for new dwellings fell (-0.1 per cent) due to the continued impact of the Federal Government’s HomeBuilder grant and similar grants by the Western Australian and Tasmanian state governments. Ms Marquardt said: “Without the offset from these housing grants, new dwellings would have risen by 1.9 per cent due to demand-driven increases in material and labour costs”.
Annual inflation for the June 2021 quarter increased to 3.8 per cent following a rise of 1.1 per cent in the March quarter. Ms Marquardt said: “The annual CPI movement was significantly influenced by COVID-19 related price changes from this time last year. Key drivers included the full unwinding of the Federal Government’s free childcare package implemented in the June quarter last year, as well as a full return from the drop in fuel prices seen in the same quarter. These ‘base effects’ led to a sharp increase in the annual CPI movement”.
“In situations such as this, it is useful to consider underlying inflation measures such as the trimmed mean, which are designed to remove large, one-off price impacts”. Trimmed mean inflation rose 1.6 per cent through the year, up from 1.1 per cent in the March 2021 quarter.
“Additional context can be gained by comparing the current CPI to pre-pandemic levels in the March 2020 quarter.” Over the five quarters from the March 2020 quarter to the June 2021 quarter, inflation rose 1.9 per cent.
|Quarter||All groups CPI||Trimmed Mean||Weighted median|