Tobacco, domestic travel, fruit show biggest CPI rises

Tobacco, domestic travel and fruit responsible for biggest increases.

fruit and veggies

Inflation in the December quarter rose 0.5 per cent, according to cost-of-living data released by the Australian Bureau of Statistics (ABS) on Wednesday, marginally more than the 0.4 per cent predicted by most economists.

The increase was largely due to rises in the cost of tobacco (9.4 per cent), domestic holiday travel and accommodation (6.2 per cent), fruit (5 per cent) and new dwelling purchases by owner-occupiers (0.4 per cent).

The most significant price falls for the quarter were automotive fuel (–2.5 per cent), audio visual and computing equipment (–3.3 per cent), wine (–1.9 per cent) and telecommunications equipment and services (–1.5 per cent).

The ABS consumer price index (CPI) data showed a 1.8 per cent rise in inflation in the 12 months to December 2018.

Economists had predicted inflation would slow to 1.7 per cent on a year-on-year measure and 0.4 per cent over the December quarter. This is the first time in eight quarters that the CPI has beaten expectations, the Australian Financial Review reported.

Senior economist with The Australia Institute in Canberra, Matt Grudnoff, told YourLifeChoices that because retirees spend money differently to the average household used to calculate the CPI, price rise and falls often had a very different impact.

“Increases in the prices of some things will impact retired people more than increases in other things,” he said. “For example, retired households tend to spend more than the average household on travel, but spend far less than the average on childcare.

“Rather than look at the impact on the average household, we need to look at the price increases and decreases that impact retired households more.”

Mr Grudnoff said the biggest impact for retirees was in the category, food and non-alcoholic beverages (0.9 per cent), in particular, the increase in the price of fruit. Meat also increased in price (1.6 per cent) driven mainly by falling supply because of the drought.

He also put the spotlight on electricity prices, which increased 0.9 per cent. “This is not nearly as big an increase as in recent years, but retired people, on average, spend more of their income on electricity,” he said.

“Recreation and culture also rose in price mainly driven by a 6.2 per cent increase in domestic holiday travel and accommodation. Again, retired people tend to spend more of their income on travel than the average household.”

On the upside, he said, after a long run of increases, average petrol prices fell 2.5 per cent. “While this is good news, it will have less of an impact on retired households as they tend to spend less on transport than the average household.”

Ernst and Young chief economist Jo Masters said the data confirmed inflationary pressures in Australia remained below the RBA's two to three per cent target band.

“The RBA is likely to downgrade its growth forecasts in the Statement on Monetary Policy next week, although we continue to expect the RBA to hold policy unchanged until well into next year,” she told the Australian Financial Review.

“The data again highlighted the challenges being faced by the retail sector, with clothing and footwear prices and furniture and furnishing both in outright deflation in annual terms.”

Have you noticed increased costs in domestic travel? What about in the cost of fruit?

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    COMMENTS

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    TREBOR
    31st Jan 2019
    11:12am
    No use-a da bloody tobac, myte... can't see how people can afford it these days anyway, but I do get sick and tired of waiting endlessly in the 12 item queue while smoke buyers get first shot over and over at (a certain unnamed Coles supermarket). Socially irresponsible bloody airophobes.....

    Petrol? Now it's gone down and is still higher than it was, but that means it's a positive? Morrisonomics 101 ...

    Fruit - I'm gonna strangle that cuckoo that keeps knocking my limes and little bananas off my trees...
    TREBOR
    31st Jan 2019
    11:15am
    What about power bills and gas etc? Road tolls for the unwary and the captive audiences? Everything 'privatised' is a costly failure.... meant to provide a more than adequate income for some mates... thievery....
    HDRider
    31st Jan 2019
    12:11pm
    . Socially irresponsible bloody airophobes.....? So you are perfect eh? People have bloody rights mate and it's people like you that whine and moan that try to erode those rights! Life is NOT ALL ABOUT YOU use another supermarket.
    Do you drink alcohol?
    Me I don't smoke and don't drink, but, I respect the rights of others that do.
    Polly Esther
    31st Jan 2019
    2:45pm
    Great reply HDRider
    Well said.
    TREBOR
    31st Jan 2019
    6:58pm
    Pair of complainophobes....

    Go stand in your own queue - the one marked for mirthless illiterates... go to the right doctor and they might surgically remove your sense of humour .. if they can find it...
    Anonymous
    31st Jan 2019
    7:00pm
    You have no sense of humor Trebor
    You’re a bore and your kind of humor is best reserved for 90 year old nuns
    musicveg
    31st Jan 2019
    7:20pm
    You are the one that is a bore Lothario, with your repetitive attacks on Greens and Labour and pushing your beloved Liberal mates. Stop bring politics into every topic.
    I think Trebor is quite funny at times, not that I agree with everything he writes but I respect his opinions more than yours Lothario.
    TREBOR
    31st Jan 2019
    11:16pm
    A laugh a minute, Loathie.... place has never been the same since you arrived in your current guise...

    31st Jan 2019
    11:18am
    Good news for OAP’s
    Now they can stop whinghing and do 2 cruises a year plus a road trip across Australia
    Paddington
    31st Jan 2019
    3:16pm
    It does not matter so much that you are SF or a pensioner but it does matter to respect each other and be kind. Sorry you are so unhappy L that you need to try to put others down. Have a good day mate.
    Misty
    31st Jan 2019
    8:45pm
    Lothario wouldn't know how to Paddington.
    Anonymous
    4th Feb 2019
    5:34am
    I don't see a lot of respect or kindness from pensioners toward the self-funded.

    31st Jan 2019
    12:41pm
    In Canberra the increase in rates and taxes have hit me the hardest. Barr has increased these to support his gay agender of paintings roundabouts and changing traffic lights to please the gay community. He has also broken his promise that helped get him ellected by not reducing caravan registration in line with NSW .we pay the highest caravan registeration in Australia for traveling about 80km on Canberra roads.this is what labour has done to the act so god help us if shorten is ellected things wii get much worse
    Anonymous
    31st Jan 2019
    6:24pm
    You ore for a greenie or labor government and that’s what you get
    Ever increasing taxes to pay for their socialist agendas
    robmur
    31st Jan 2019
    2:29pm
    The one very important item that isn't mentioned is the increasing costs for private health. My wife and I couldn't get out of private health as we have had a number of serious health issues over the last ten years. The older we get, the more reliance we have on private health, private hospitals and choice of surgeons, rather than chancing it waiting on public hospitals and no choice of surgeons. Every April, private health goes up and therefore requires more of our savings to finance that important need.
    Paddington
    31st Jan 2019
    3:21pm
    Talk to your provider as they will give you a reduction rather than lose you.
    If you are paying much over $300 per month for both of you are paying too much!
    Our cover is top for both and $309 per month with zero cost for day surgery.
    A few others on here are in this one too.
    musicveg
    31st Jan 2019
    2:48pm
    Well looks like my rent will go up again. What about veggies, eat more of them if they have not gone up. I have not seen an increase in my organic fruit purchase, they fluctuate all year, I buy what is in season. My electricity costs have gone done since I changed my supplier. I cannot afford to travel, but I feel sorry for the domestic tourist industry if people are choosing more cruising and overseas destinations instead.
    TREBOR
    31st Jan 2019
    11:19pm
    Getting solar on the roof when we sell and buy again - oceanside. Solar power 1/3 more than we use, solar hot water ..... get to be a bill-proof as possible in case one or the other passes away, and that way the other can live in the house and not have to watch every cent ... and always vegetable gardens and fruit trees out the back - water tank and solar pump...

    Go independent.... only way to go in The Time Of the Vultures.
    musicveg
    1st Feb 2019
    12:46am
    Yes growing a few veggies Trebor, going self-sufficient is great if you own your own place, I am saving up to go tiny (tiny houses, look them up).
    TREBOR
    1st Feb 2019
    2:25am
    We had a property and are used to our own fruit and veg growing out the back.. can't grow all, but some,the long term growers like onions and such, are cheap anyway. Had a terrific crop of Roma tomatoes this year in the backyard..butter beans, spinach, limes, lemons, apricots, nectarines, potatoes, bananas... soon get the peas in and some others...

    Tomatoes are mostly in the freezer after being blended down.... just-a like-a Mama makes!

    As Rooster Cogburn said - I've grown old... bending and weeding is the cause of relentless chest pain... but I'll fix that!!
    TREBOR
    1st Feb 2019
    2:30am
    It's hard work to build up your garden network on your own acreage.. we had underground pipes from the top dam that fed the gardens at the flick of a switch - the good slave dug all those and laid the pipes ... but when you've got it on your own property, you need a big freezer... one year we had over fifty peas of various kinds - snow peas by the bucket etc... check the price in the supermarket....

    We (I) are (am) far from 'hippies' .. just self-reliant.... and plan to be that way for always...

    Try to get your own piece of land.... hard, I know.
    musicveg
    1st Feb 2019
    2:41am
    Sounds great Trebor, good on you, I would love to eat all your veggies. Going to be awhile before I can own my own land.
    Misty
    31st Jan 2019
    8:50pm
    You can always find specials at the supermarkets these days, I have a lot of pets and I find that I can get good savings at all the major supermarkets, I live in the country and our supermarkets are all close together so I don't use much fuel to shop.
    Paddington
    1st Feb 2019
    6:11am
    We do that too Misty! Buy when half price not wait til you run out of items. Pets are a big expense especially vet fees.
    Misty
    1st Feb 2019
    9:25am
    Don't I know it Paddington, have spent over $20,000.00 the last 18 months on vets, one cat got bitten by a snake but thankfully survived after a week being treated at the vets, another had to have all her teeth extracted and another had kidney failure and eventually lost his fight, so they are a big expense, but we love them all, so have to look after them as best we can.