End of free childcare pushes up prices but inflation contained

Save articles for later

Add articles to your saved list and come back to them any time.

Consumer prices lifted by 1.6 per cent through the September quarter, driven by the end of free child care, but overall inflation is narrowly contained and showing no signs of breaking out.

Figures from the Australian Bureau of Statistics today showed inflation over the past 12 months was just 0.7 per cent.

The end of free childcare has helped push up consumer prices by 1.6 per cent in the September quarter, but wider inflation pressures remain muted.Credit:Louie Douvis

It follows the record 1.9 per cent drop in the consumer price index in June. That was caused largely by the provision of free child care across the country, a near-20 per cent drop in the price of petrol and tumbling pre-school and primary education costs.

Annual inflation dropped to minus 0.3 per cent, only the third time since 1949 it had been negative over 12 months.

The Reserve Bank's preferred measures of inflation showed moderate increases in the September quarter. The trimmed mean lifted by 0.4 per cent to 1.2 per cent over the past 12 months while the weighted median increased by 0.3 per cent to 1.3 per cent.

The head of the ABS' prices statistics, Andrew Tomadini, said the end of free child care was the major factor in the result.

"In the September quarter child care fees returned to their pre-COVID-19 rate having been free during the June quarter. This was the largest contributor to the CPI rise in the September quarter," he said.

"Excluding the impact of child care, the CPI would have risen 0.7 per cent."

Outside of childcare, there was a 9.4 per cent lift in petrol prices while there was an 11.1 per cent increase in costs of pre-school and primary education costs.

Furniture prices rose by 6.4 per cent and there were spikes in major appliances (5.3 per cent) and small appliances (5.8 per cent).

"Strong demand and supply shortages led to price rises and less discounting for many household durable goods," Mr Tomadini said.

Despite the rebound in the September quarter, inflation pressures remain muted.

Over the past year, prices for clothing and footwear (minus 0.5 per cent), housing (minus 0.2 per cent), household furnishings (minus 0.1 per cent), transport (minus 0.4 per cent), communication (minus 3.3 per cent) and recreation and culture (minus 0.7 per cent) are all negative.

The biggest increase over the past year has been in the price of alcohol and tobacco, up by 8.1 per cent, driven by lifts in government excises.

By city, the largest quarterly increase of 2.3 per cent was recorded in Brisbane and Canberra. Prices were up by 0.9 per cent in Melbourne and by 1.8 per cent in Sydney.

Over the past year, prices in Hobart are up by a national high of 1.7 per cent. In Sydney, they have lifted by 0.3 per cent while in Melbourne they have increased by 0.7 per cent.

Most Viewed in Politics

Source: Read Full Article