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Tobacco, trips and childcare see CPI lift

  • January 28 2021
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Invest

Tobacco, trips and childcare see CPI lift

By Cameron Micallef
January 28 2021

An increase in tobacco tax, the unwinding of free childcare subsidies and rising domestic holiday travel during the Christmas period saw the consumer price index lift 0.9 per cent during the December quarter. 

Tobacco taxes

Tobacco, trips and childcare see CPI lift

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  • January 28 2021
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An increase in tobacco tax, the unwinding of free childcare subsidies and rising domestic holiday travel during the Christmas period saw the consumer price index lift 0.9 per cent during the December quarter. 

Tobacco taxes

The most significant price rise during the quarter was a 10.9 per cent jump in tobacco, on the back of new taxes, as well as a lifting of the free childcare subsidy, which saw parents cash out 37.7 per cent more with out-of-pocket expenses now returning to pre-COVID level. 

Other price rises in the December quarter were domestic holiday travel (+6.3 per cent), with state and territory borders re-opening in the lead up to the Christmas period, and medical and hospital services (+2.5 per cent), after private health premiums increased on 1 October following a six-month freeze.

ABS’ head of prices statistics Michelle Marquardt highlighted property prices also remained resilient during the quarter, due to government intervention, including the HomeBuilder’s stimulus package. 

“The rise in demand for new dwellings is reflected in higher building approvals for houses and a record value for housing loan commitments in November,” she said. 

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“The December quarter rise of 0.7 per cent in the purchase price of new dwellings would have been higher, but was partially offset by the Federal government's $25,000 HomeBuilder grant, and similar $20,000 grants by the Western Australian (WA) and Tasmanian state governments."

While inflation was mostly positive for the quarter, consumers saw significant price falls in electricity, down by 7.5 per cent, after WA Household Electricity Credit gifted Perth residents a one-off $600 credit, which brought prices down by 66.7 per cent in the WA capital. 

Overall, the figures show that annual inflation increased to 0.9 per cent following a rise of 0.7 per cent in the September quarter. 

“Since the June quarter fall of 0.3 per cent, the increase in annual inflation largely reflects the unwinding of free child care and higher petrol prices. These impacts are largely removed from measures of underlying inflation, with the trimmed mean measure remaining at a record low of 1.2 per cent,” Ms Marquardt concluded. 

Tobacco, trips and childcare see CPI lift
Tobacco taxes
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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