Annual CPI jumps by 6.1%

  • By Zilla Efrat

The annual Consumer Price Index (CPI) jumped by 6.1 per cent – the biggest rise since the introduction of GST, according to the Australian Bureau of Statistics (ABS).

This jump came on the back of 1.8 per cent rise in the June 2022 quarter.

A big culprit behind the June quarter rise was the 5.6 per cent increase in new dwellings.

"Shortages of building supplies and labour, high freight costs and ongoing high levels of construction activity continued to contribute to price rises for newly built dwellings,” says the head of prices statistics at the ABS, Michelle Marquardt.

“Fewer grant payments made this quarter from the federal government's HomeBuilder program and similar state-based housing construction programs also contributed to the rise."

Another big contributor to the June quarter rise was a 4.2 per cent rise in petrol prices.

"The CPI's automotive fuel series reached a record level for the fourth consecutive quarter," says Marquardt.

“Fuel prices rose strongly over May and June, following a fall in April due to the fuel excise cut.”

The price of goods (+2.6 per cent) continued to rise more strongly than that of services (+0.6 per cent).

There were also notable rises recorded across the food group (+2.0 per cent) and the furnishings, household equipment and services group (+2.5 per cent).

The main contributors to the rise in food prices included vegetables (+7.3 per cent), meals out and takeaway foods (+1.4 per cent), and fruit (+3.7 per cent).

Supply chain disruptions due to flooding events, labour shortages, and rising freight costs contributed to higher prices.

Furniture prices rose (+7.0 per cent) due to increased transport and material costs, and stock shortages.

On the services side, financial services rose 1.2 per cent and holiday travel and accommodation advanced by 2.3 per cent.

There was some good news. The costs of childcare fell 7.3 per cent as the full effect of additional childcare subsidies for families with two or more children under the age of six, which commenced on 7 March, flowed through into this quarter.

Before and after school care vouchers offered by the NSW Government also contributed to the fall in childcare costs.

Meanwhile, urban transport fares (-4.4 per cent) fell due to free travel periods introduced by the NSW and Tasmanian State Governments within the quarter.

"The quarterly increase of 1.8 per cent was the second highest since the introduction of the GST, following on from a 2.1 per cent increase last quarter," says Marquardt.

The most significant contributors to the annual CPI were new dwellings prices, which jumped 20.3 per cent over the year and automotive fuel prices which soared by 32.1 per cent.

"Annual price inflation for new dwellings was the strongest recorded since the series commenced in 1999," says Marquardt.