Historic quarter for COVID-hit economy

Font Size:

The Consumer Price Index (CPI) fell 1.9 per cent in the June 2020 quarter, the largest quarterly fall in the 72-year history of the CPI and the first time annual deflation had been recorded since March 1998. All due, of course, to COVID-19.

The fall was mainly due to free child care (-95.0 per cent), which was in response to the pandemic, a significant fall in the price of automotive fuel (-19.3 per cent) and a fall in pre-school and primary education (-16.2 per cent), with free preschool being provided in New South Wales, Victoria and Queensland.

If not for these three components, the CPI would have risen 0.1 per cent.

Rents recorded their first quarterly fall on record (-1.3 per cent), while there was a record quarterly fall in household spending (-12.1 per cent).

Some CPI components recorded notable price rises on the back of increased spending. These included: cleaning and maintenance products (+6.2 per cent), other non-durable household products including toilet paper (+4.5 per cent), furniture (+3.8 per cent), major household appliances (+3.0 per cent) and audio, visual and computing equipment (+1.8 per cent).

Inflation reached a six-year high of 2.2 per cent in the March quarter, attributed partly to the impact of drought and bushfires on food products. But the latest figures put the annual inflation rate for the year to the June quarter at -0.3 per cent.

Single homeowners with private income experienced a 2 per cent drop in the cost of living, followed by couple and single homeowners receiving a full or part Age Pension (-1.9 per cent), couple homeowners with private income (-1.7 per cent) and renters receiving an Age Pension (-1.2 per cent).

*Percentage and dollar changes compared with March quarter figures. 

If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

RELATED LINKS

How to give retirees the confidence to spend

An efficient retirement spending system is still a work in progress, writes Andrew Boal.

Flicking the switch from saving to spending is tough for many

You've spent decades accumulating your nest egg, then you need to get used to spending it.

You’ve quit full-time work, now what to do with that nest egg?

A wider range of products and services must be developed for retirees, says adviser.

0 Comments

Total Comments: 0

    FACEBOOK COMMENTS



    SPONSORED LINKS

    continue reading

    Finance

    Tobacco and childcare drive cost of living increase

    The Consumer Price Index (CPI) rose 0.9 per cent in the December quarter. According to the Australian Bureau of Statistics...

    Age Pension

    Retirement system ‘uncertain for almost all retirees’

    Australia, a nation of almost four million retirees, has one of the world's best retirement systems. The 2020 Mercer CFA...

    Finance

    The big question: How much do I need to retire?

    Life expectancies continue to rise, and with that comes a host of challenges. For governments, there's the increasing cost to...

    Finance

    Understanding the true cost of retirement

    The Australian government spends billions on boosting retirement incomes. The two biggest costs, the Age Pension and superannuation tax concessions,...

    Age Pension

    Adequacy of retiree nest eggs

    YourLifeChoices conducts several surveys each year to gauge the financial, physical and mental health of our 260,000 members. The aim...

    Age Pension

    Age Pension payments in 2021 – what you need to know

    World heavyweight boxing champion, Olympian, ordained minister and successful entrepreneur George Foreman returned to the ring at the age of...

    Age Pension

    Services and rebates that can save you hundreds

    Last year, I put together a retiree checklist. In 2021, there are some additions. This is a long list and...

    Age Pension

    Pension rates, PBS entitlements, health fund changes

    YourLifeChoices keeps you up to date with retirement income changes. PBS co-paymentsThe maximum co-payment for general patients for drugs listed...

    LOADING MORE ARTICLE...