Budget Paper 1994-95 No.6 Northern Territory Economy
Tabled Paper 2156
Tabled Papers for 6th Assembly 1990 - 1994; Tabled Papers; ParliamentNT
Tabled by Barry Coulter
Made available by the Legislative Assembly of the Northern Territory under Standing Order 240. Where copyright subsists with a third party it remains with the original owner and permission may be required to reuse the material.
Prices and Wages Inflation rates in all States and Territories for the past two years have been dramatically lower than the rates experienced through the 1970s and 1980s, running consistently below 2.5%. During 1993, the rate o f inflation in Australia remained virtually unchanged from 1992 due to excess capacity in the economy, subdued wages growth, stable property asset prices and a continued downward movement in interest rates. From 1991 to early 1994, the main source o f inflationary pressure on costs in the economy has been higher import prices due to a lower dollar. However, a combination o f increased competition and fairly weak demand have limited the extent to which these costs have been passed on to the retail level. Gains in productivity have also assisted in constraining any increase in the rate o f inflation. In the Territory, growth in final domestic demand was double the national average in 1993. This, combined with a comparatively robust labour market, in part explains the slightly higher inflation rate recorded in the Territory. Consumer Prices The Consumer Price Index (CPI) shows the Territorys annual inflation rate rose to 2.3% as o f the December quarter 1993, compared to a national rate o f 1.9%. This represents the first movement above 2.0% for the Territory since the March quarter 1992. Figure 4.1 highlights the fall in inflation w hich accom panied the dow nturn in national economic activity culminating in low inflation rates over the last two years. In line w ith headline in fla tion rates, Com m onwealth T reasurys estim ate o f A ustralias underlying rate o f inflation (w hich excludes fac to rs sensitive to seaso n a l c o n d itio n s and exog en o u s government rates and charges) was 2.1% 2 1 Figure 4.1 Consumer Price Inflation (annual change-quarterly) Source: ABS Cat. No. 6401.0
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