Budget 2013/14 Northern Territory Economy
Tabled paper 295
Tabled papers for 12th Assembly 2012 - 2016; Tabled papers; ParliamentNT
Tabled by David Tollner
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Department of the Treasury and Finance
Prices 69 Northern Territory Economy Consumer Price Index The Northern Territory Governments preferred measure of inflation, and the one used in the Budget papers to inform agency budgets, is the year-on-year percentage change in the Darwin CPI. This measure is a more stable measure of inflation, comparing the past four quarters CPI to the previous four quarters. In year-on-year terms, growth in the Darwin CPI moderated to 2.0percent in 2012. Nationally, the focus in the media is on the annual changes in the CPI. While it is a more volatile measure, it is also a more timely measure of changes in the CPI. Annual change compares the latest quarter to the same quarter in the previous year. Annual growth in Darwin CPI strengthened to 2.5percent in 2012. After peaking at 3.1percent in the June quarter 2011, annual growth in the Darwin CPI slowed to 1.5per cent in the June quarter 2012. This was primarily driven by lower prices for domestic and overseas travel, audio, visual and computing equipment, and fruit and vegetable prices. Annual growth in the Darwin CPI strengthened to 2.5per cent over the second half of 2012, driven by higher electricity prices with the introduction of the carbon price, and higher rental and house purchase prices as property markets strengthened following the announcement by INPEX and Total to proceed with the Ichthys liquefied natural gas (LNG) plant at Blaydin Point (see Chapter 11: Construction). Among the capital cities, Darwin and Sydney had the equal highest rate of inflation in annual terms (2.5percent) and Hobart had the lowest rate (1.0percent) in 2012. Across the eight capital cities, the annual inflation rate slowed to 2.2percent in 2012, from 3.0percent through the year to December 2011. Housing Housing accounts for around a quarter of the Darwin CPI basket, and changes in housing-related prices have a considerable impact on changes in inflation (Chart 6.1). In the September quarter 2011, the weighting pattern of the CPI series was updated, new classifications were added and a new analytical series incorporated (the 16th series weighting pattern). The most substantial change was an increase in the weighting of the housing category by 4.11 percentage points to 25.73percent. This was driven by increases in rents and house purchase weightings. The rents weighting was increased by 2.93 percentage points to 8.54percent, and the house purchase weighting by 1.53 percentage points to 11.01per cent. As a result, changes in rents and house purchase prices now have a greater impact on Darwin inflation, accounting for around one-fifth of the Darwin CPI basket, than they did when inflation was measured by the previous CPI series and where they accounted for around one-seventh of the CPI basket. The remainder of the housing category is made up of other housing (2.88percent) and utilities (3.29percent). Other housing consists of dwelling maintenance and repair as well as property rates and charges. Darwin CPI Main Component Changes
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