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Selected Living Cost Indexes, Australia

Living Cost Indexes (LCIs) are designed to measure the effect of changes in prices on the out–of–pocket living expenses of selected household types

Reference period
December Quarter 2019
Released
5/02/2020

Main features

December key statistics

The Living Cost Indexes (LCI)

The Living Cost Indexes (LCI) have been designed to answer the question:

'By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?'

In the December 2019 quarter, the living costs of pensioner and beneficiary households (PBLCI) rose 0.7%. Over the same period, the living costs of other government transfer recipient households rose 0.9%, age pensioner and self funded retiree households rose 0.5% and employee households rose 0.4%. For more information about the December 2019 quarter results see Main Contributors to Change.

The inclusion of mortgage interest and consumer credit charges, and the different treatments of housing and insurance costs in the LCIs result in variations between the LCIs and the Consumer Price Index (CPI). The expenditure patterns of those households measured by the LCIs differ from those of the overall household sector in scope of the CPI; these also contribute to differences in the percentage changes.

For a discussion of the relationship between the LCIs and CPI, see the methodology page.

Weighted average of eight capital cities, All groupsSep Qtr 2019 to
Dec Qtr 2019
% change
Dec Qtr 2018 to
Dec Qtr 2019
% change
Selected Living Cost Indexes (LCIs) - Household type:  
 Pensioner and Beneficiary LCI (PBLCI)
0.7
1.8
 Employee LCI
0.4
1.0
 Age pensioner LCI
0.5
1.8
 Other Government Transfer Recipient LCI
0.9
1.9
 Self-funded Retiree LCI
0.5
1.9
Consumer Price Index (CPI)
0.7
1.8
Download

Use of price indexes in contracts

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts that sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

Frequently asked questions

The Frequently Asked Questions page that has answers to a number of common questions to do with price indexes and the Consumer Price Index, in particular.

Main contributors to change

​​​​​​​Pensioner and beneficiary households (+0.7%)

  • 4.8% rise in alcohol and tobacco is the main contributor due to the annual tobacco excise tax increase of 12.5% and the biannual increase based on Average Weekly Ordinary Time Earnings (AWOTE) indexation applied on 1 September 2019.
  • 1.4% rise in food and non-alcoholic beverages due to drought conditions impacting the prices for fruit and dairy products. Strength in meat prices continues due to high global demand resulting from the spread of African Swine Fever in Asia and ongoing drought conditions in Australia.
  • 1.6% fall in health is the main partial offset, driven by pharmaceutical products due to the cyclical effect of a greater proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS), reducing out-of-pocket expenses.
  • The living cost index (LCI) for the pensioner and beneficiary households (PBLCI) rose 0.7%, in line with the CPI.
  • Over the past twelve months the PBLCI rose 1.8%, in line with the CPI.
     

Employee households (+0.4%)

  • 2.9% rise in alcohol and tobacco is the main contributor due to the tobacco excise tax increase.
  • 1.2% rise in food and non-alcoholic beverages due to drought conditions impacting the prices for fruit, dairy and meat products.
  • 2.7% fall in insurance and financial services is the main partial offset, driven by mortgage interest charges following interest rate cuts on home loan products.
  • The LCI for employee households recorded a smaller rise compared to the CPI (+0.7%) this quarter.
  • Over the past twelve months the LCI for employee households rose 1.0% while the CPI rose 1.8%.
     

Age pensioner households (+0.5%)

  • 1.5% rise in food and non-alcoholic beverages is the main contributor due to drought conditions impacting the prices for fruit, dairy and meat products.
  • 3.2% rise in alcohol and tobacco due to the tobacco excise tax increase.
  • 1.4% fall in health is the main partial offset, driven by the cyclical fall in pharmaceutical products.
  • The LCI for age pensioner households recorded a smaller rise compared to the CPI (+0.7%) this quarter.
  • Over the past twelve months the LCI for age pensioner households rose 1.8%, in line with the CPI.
     

Other government transfer recipient households (+0.9%)

  • 5.6% rise in alcohol and tobacco is the main contributor due to the tobacco excise tax increase.
  • 1.4% rise in food and non-alcoholic beverages due to drought conditions impacting the prices for fruit, meat and dairy.
  • 1.7% fall in insurance and financial services is the main partial offset, driven by a fall in mortgage interest charges.
  • The LCI for other government transfer recipient households recorded a larger rise compared to the CPI (+0.7%) this quarter.
  • Over the past twelve months the LCI for other government transfer recipient households rose 1.9% while the CPI rose 1.8%.
     

Self–funded retiree households (+0.5%)

  • 1.4% rise in food and non-alcoholic beverages is the main contributor due to drought conditions impacting the prices for fruit, dairy and meat products.
  • 1.0% rise recreation and culture due to domestic holiday, travel and accommodation as a result of price rises in the lead up to the peak summer holiday period.
  • 0.5% fall in furnishing, household equipment and services is the main partial offset due to sales events throughout the quarter.
  • The LCI for self–funded retiree households recorded a smaller rise compared to the CPI (+0.7%) this quarter.
  • Over the past twelve months the LCI for self–funded retiree households rose 1.9% while the CPI rose 1.8%.

 

Percentage change, commodity group - September quarter 2019 to December quarter 2019

Weighted
average
of eight
capital cities
Pensioner
and
beneficiary
LCI
Employee
LCI
Age
pensioner
LCI
Other
government
transfer
recipient
LCI
Self-
funded
retiree
LCI
Consumer
Price
Index
(CPI)
      %
Food and
non-alcoholic
beverages
1.41.21.51.41.41.3
Alcohol and
tobacco
4.8
2.9
3.2
5.6
1.6
3.0
Clothing and
footwear
-0.9
-0.3
-0.7
-1.1
-0.7
-0.3
Housing(a)
-0.1
-0.2
-0.1
-0.1
-0.1
0.1
Furnishings,
household
equipment
and services
-0.4
-0.2
-0.5
-0.2
-0.5
-0.3
Health
-1.6
-0.1
-1.4
-2.0
-0.4
-0.3
Transport
1.9
1.4
1.9
1.9
1.4
1.5
Communication
-0.9
-1.0
-1.1
-0.9
-1.0
-1.0
Recreation and
culture
1.0
0.9
0.9
0.9
1.0
0.9
Education
0.0
0.1
0.0
0.1
0.1
0.1
Insurance and
financial
services(b)
-0.8
-2.7
0.0
-1.7
-0.1
0.4
All groups
0.7
0.4
0.5
0.9
0.5
0.7
a. New dwelling purchase by owner-occupiers is included in the CPI but excluded from the Selected Living Cost Indexes.
b. The Selected Living Cost Indexes includes interest charges and general insurance. Interest charges are excluded from the CPI and general insurance is calculated on a different basis.
 

Data downloads

Table 1. All groups, index numbers and percentage changes, by household type

Table 2. Commodity groups, index numbers, percentage changes and points contributions, by household type

Table 3. Gross insurance, mortgage interest and consumer credit, index numbers and percentage changes, by household type