The September quarter CPI outcome is another positive for the Australian economy and continues the impressive inflation performance of the last two years the Acting Treasurer Senator the Hon Rod Kemp said today.
The All groups CPI rose by 0.2 per cent in the September quarter 1998 and 1.3 per cent through the year to the September quarter.
The major contribution to the low September quarter result came from lower transportation costs, which fell by 0.5 per cent in the quarter, reflecting falls in both motor vehicle prices and petrol prices. This is the first time since the December quarter 1976 that there have been four successive quarterly falls in overall transportation costs.
Housing rose by a modest 0.3 per cent in the September quarter, with increases in property rates and charges partly offset by lower electricity and gas prices as a result of the Victorian Winter Power Bonus and Winter Energy Concession schemes.
Prices of imported goods as a group fell by 0.6 per cent in the quarter and 1.7 per cent through the year to the September quarter. This fall in retail prices of imported goods illustrates the extent of competitive pressures in the Australian economy. The fall in prices occurred despite the price of imported consumption goods at the docks increasing by 3.5 per cent in the September quarter 1998 and almost 12 per cent through the year to the September quarter, mainly reflecting the lower exchange rate. The inclusion of computer prices for the first time also contributed to the fall in retail prices of imported goods.
The September quarter release was the first of the 13th Series Australian CPI. The new series increases the population coverage of the survey to include all private households as well as wage and salary earners. The other most notable changes are the removal of mortgage interest and consumer credit charges. The new series will provide a better indicator of price pressures in the economy than previously and will be used by the Reserve Bank of Australia as the inflation target in setting monetary policy.
The underlying inflation rate was 0.4 per cent in the September quarter 1998 and 1.6 per cent through the year to the September quarter.
Senator Kemp said the low inflation environment has been an important factor in maintaining investor confidence in the Australian economy over the last year and a half as the economic and financial crisis in the Asian region has unfolded.