Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 9 November 2015

Don't drink, don't smoke...

...what can you do?

Well, some good news if you're part of the temperance movement, I suppose, with the cost of living for employee households rising by just +0.2 per cent over the third quarter...and less still if you don't drink or smoke. 

The ABS Selected Cost of Living Indexes revelaed only moderate increases for the year to September for employee households (+0.7 per cent), self-funded retirees (+1.2 per cent) and age pensioners (+0.9 per cent). 

The cost of living indexes were created by the Australian Bureau of Statistics (ABS) in order to answer the following key question:

"By how much would after tax money incomes need to change to allow households to purchase the same quantity of consumer goods and services that they purchased in the base period?"

The main contributors to the increase in living costs for employee households this quarter were increases in alcohol and tobacco costs (+1.2 per cent), or more specifically, tobacco and beer.

Smokes in particular were the target of a federal excise tax rate increase, which became effective from September 1.

The cost of living index increase for employee households this quarter was lower than the result for the Consumer Price Index (CPI) or official inflation due to a decline in mortgage interest charges, which are not included in the CPI figures. 

The Reserve Bank's latest Statement on Monetary Policy sees few inflationary pressures over the near term, with underlying inflation expected to track at the bottom of the target range at around 2 per cent.

I looked at the most recent inflation figures here.

In the meantime, go easy on the beer and fags.