cumulative impact single parents pressures pensioners
workers with income support disadvantage lone person aged and disability
unemployed couples medium families small
family data
essential
services
relative price index
carers disproportionate
distribution of price expenditure safety net Government pensions
and allowances
contribution
income
expenditure
of income support to household
cost of living measuring price movement defining the pressures
poverty
communities
and low income
household distribution and population
Cost of Living in Tasmania
COMPANION REPORT 1 - THE DATA
OCTOBER 2011
low
line
TABLE OF CONTENTS
INTRODUCTION.......................................................................................................... 2
Costs – prices and expenditure ..................................................................... 3
The CPI: measuring inflation and cost of living?..................................... 5
The Analytical Living Cost Indexes for Selected Australian
Household Types................................................................................................... 6
Price .............................................................................................................................. 7
Expenditure ............................................................................................................ 11
RELATIVE PRICE INDEX ........................................................................................ 14
Introduction ..................................................................................................................... 14
Disproportionate impacts of price ...................................................................... 15
Utilities ...................................................................................................................... 16
Food ........................................................................................................................... 20
Housing .................................................................................................................... 21
Rent ............................................................................................................................ 23
Health........................................................................................................................ 25
Transport................................................................................................................. 26
Urban Transport Fares..................................................................................... 27
Education................................................................................................................. 28
Recreation............................................................................................................... 30
Alcohol and Tobacco ....................................................................................... 31
Cumulative impact of cost of living ..................................................................... 33
Income modelling ......................................................................................................... 36
Households at risk........................................................................................................ 42
The distribution of at-risk households ............................................................... 46
CONCLUSION ............................................................................................................ 49
Introduction
Social and economic commentary on cost of living often focuses on consumption, referring to
the rate of inflation, how this is used to set official interest rates, the rate of increase of incomes
and costs, unemployment and workforce participation levels.
While useful as macro-economic indicators, their application to understanding micro-economic
effects, at the household or local level, becomes problematic due to particular household
characteristics being lost in aggregated data.
Cost of living is also a difficult concept to define and measure as it includes consideration of
prices, income and economic resources, expenditure, financial stress and assumptions about
standards of living.
Quantitative data on these measures provides an indication of overall trends, but it has
limitations. Some datasets provide data only at the national level, making it difficult to draw
conclusions about cost of living pressures specific to Tasmania. Also some of the data is dated
and, as a result, may not fully capture the situation as it exists in 20111.
The aim in examining cost of living pressures in Tasmania was broken down into investigation
of:
cost, made up of price and expenditure;
the Consumer Price Index (CPI) and its reference and use as a cost of living measure;
household cost pressures and differences between Tasmania and Australia;
cumulative impacts of multiple cost pressures;
the financial resources available to Tasmanians and at-risk households; and
the distribution of at-risk households in Tasmania.
This required analyses at the most disaggregated household level possible for Tasmania. Two
analytical methods were used for the investigation and are covered in this report, these were:
1) data from the Relative Price Index (RPI) model, developed by Dufty and Macmillan2,
and the Stinmod and SpatialMSM model, developed by the National Centre for Social
and Economic Modelling (NATSEM)
2) publically available data from the Australian Bureau of Statistics (ABS) contained in
Appendix 1.
Although data from both methods are referenced in A Cost of Living Strategy for Tasmania, the
Cost of Living Issues section of the Strategy relies on the first method, as it was designed to
1
The ABS has a number of surveys that were released in 2011. Initial results from these surveys were included in A Cost of
Living Strategy for Tasmania. However, this data was not available in time for complete analysis and inclusion in the 2011
Tasmanian Cost of Living Strategy.
2
Dufty, G & MacMillan, I. 2011, The Relative Price Index, The CPI and the implications of changing cost pressures on various
household groups.
2
provide household expenditure and financial indicators at a disaggregated level, therefore
meeting the aim of the analysis.
Importantly, the data points to households and places that face greater cost pressures than
others, signposting where policy work needs to be directed. Although the analysis highlights
that low income households face greater cost pressures, the data does not indicate why
expenditure levels are higher for some households. The value of the analysis is to connect the
data with other information sources of hardship, such as community sector reports, so the full
picture is built on the impact of cost pressures on households. This qualitative analysis is
covered in Companion Report 2 – Impacts and responses.
COSTS – PRICES AND EXPENDITURE
When broken down, household costs are made up of the amount or quantity of goods and
services that a household purchases, multiplied by its price. Three main datasets that contribute
to understanding costs are the ABS’ CPI and Household Expenditure Survey (HES), and
indexes that combine these two together, such as the ABS’ Analytical Living Cost Indexes for
Selected Australian Household Types3 (ALCI), and the RPI.
Prices
To measure prices of any item, charges per unit of sale need to be measured, and what
constitutes a charge and a unit. For example, to measure the price of electricity to a consumer,
it needs to be established whether or not to include the cost of generation, delivery, and retail
overheads, along an established position on a unit of electricity (usually a kilowatt hour – KWh).
Other factors that can contribute to understanding a price for a service include charges for
dis/connection, late payment fees and fixed charges to cover costs such as meters.
To compare actual prices across all the goods and services that households commonly
consume is beyond the scope of this analysis. Therefore, this analysis looks at price-change
through the CPI, focussing on the main price groups of the CPI basket and some sub-groups.
This includes food and the major areas that governments have an oversight role in or directly
deliver – housing, health, transportation and education. These five price groups are referred to
as essential services. Within the CPI basket there are eleven price groups and many sub-groups,
which are explained further below.
CPI Price groups, sub-groups and expenditure classes
The ABS uses a hierarchical classification method for grouping items within the CPI. The
hierarchy starts with the ‘All groups’, which represents the complete ‘basket’ of goods and
services that are sampled for price change each quarter and which represents the overall CPI.
The categories of prices the ABS uses increases in detail and size as it is disaggregated into price
groups, sub-groups, expenditure classes, elementary aggregates and finally prices.
3
Australian Bureau of Statistics, 2011, Analytical Living Cost Indexes for Selected Australian Household Types, Dec 2010 (cat.
no. 6463.0)
3
Table 1 outlines the ABS CPI price categories for price groups, sub-groups and expenditure
class levels.
Table 1: CPI classifications
Price group / Sub group
1. Food
1.1. Dairy and related products
1.2. Bread and cereal products
1.3. Meat and seafoods
1.4. Fruit and vegetables
1.5. Non-alcoholic drinks and
snack food
1.6. Meals out and take away
foods
1.7. Other food
2. Alcohol and tobacco
2.1. Alcoholic drinks
2.2. Tobacco
3. Clothing and footwear
3.1. Men's clothing
3.2. Women's clothing
3.3. Children's and infants'
clothing
3.4. Footwear
3.5. Accessories and clothing
services
4. Housing
4.1. Rents
4.2. Utilities
4.3. Other housing
5. Household contents and
services
5.1. Furniture and furnishings
5.2. Household appliances,
utensils and tools
5.3. Household supplies
5.4. Household services
6. Health
6.1. Health services
6.2. Pharmaceuticals
7. Transportation
7.1. Private motoring
7.2. Urban transport fares
8. Communication
Expenditure class
Milk, Cheese, Ice cream and other dairy products
Bread, Cakes and biscuits, Breakfast cereals, Other cereal products
Beef and veal, Lamb and mutton, Pork, Poultry, Bacon and ham,
Other fresh and processed meat, Fish and other seafood
Fruit, Vegetables
Soft drinks, waters and juices, Snacks and confectionery
Restaurant meals, Take away and fast foods
Eggs, Jams, honey and sandwich spreads, Tea, coffee and food
drinks, Food additives and condiments, Fats and oils, Food n.e.c.
Beer, Wine, Spirits
Men's outerwear, Men's underwear, nightwear and socks
Women's outerwear, Women's underwear, nightwear and hosiery
Children's and infants' clothing
Men's footwear, Women's footwear, Children's footwear
Accessories, Clothing services and shoe repair
Rents
Electricity, Gas and other household fuels, Water and sewerage
House purchase, Property rates and charges, House repairs and
maintenance
Furniture, Floor and window coverings, Towels and linen
Major household appliances, Small electric household appliances,
Glassware, tableware and household utensils, Tools
Household cleaning agents, Toiletries and personal care products,
Other household supplies
Child care, Hairdressing and personal care services, Other
household services
Hospital and medical services, Optical services, Dental services
Pharmaceuticals
Motor vehicles, Automotive fuel, Motor vehicle repair and servicing,
Motor vehicle parts and accessories, Other motoring charges
Urban transport fares
Postal, Telecommunication
4
9. Recreation
9.1. Audio, visual and computing
9.2. Books, newspapers and
magazines
9.3. Sport and other recreation
9.4. Holiday travel and
accommodation
10. Education
11. Financial and insurance services
11.1. Financial services
11.2. Insurance services
Audio, visual and computing equipment, Audio, visual and
computing media and services
Books, Newspapers and magazines
Sports and recreational equipment, Toys, games and hobbies,
Sports participation, Pets, pet foods and supplies, Pet services
including veterinary, Other recreational activities
Domestic holiday travel and accommodation, Overseas holiday
travel and accommodation
Preschool and primary education, Secondary education, Tertiary
education
Deposit and loan facilities, Other financial services
Insurance services
THE CPI: MEASURING INFLATION AND COST OF LIVING?
The CPI provides a general measure of the change in prices of goods and services purchased by
Australian households and therefore the rate of inflation.
The CPI is regarded as Australia’s key measure of inflation. It measures the price inflation
experienced by households and informs the community about changes to the real purchasing
power of consumers' incomes4.
Quarterly surveys for the CPI are conducted in capital cities to monitor inflation across the
basket of goods and services. The CPI aims to represent the average expenditure, therefore it
has to keep constant the composition of the basket as well as the quantities of the goods and
services purchased. This is to ensure the CPI represents price and its movement over time as
accurately as possible. The quantity weights are updated after each HES, through a CPI series
update. The quantity weights are used to multiply the quarterly CPI price data to build price
indexes for specific items, which in turn contribute to the overall Australian CPI.
The capital city indexes that contribute to the CPI measure price movements over time in each
city individually and do not measure differences in retail price levels between cities.
Additionally, there is currently no measure to capture price changes for rural or regional areas
of Australia.
Although a detailed description of the limitations of the CPI as a cost of living index is provided
in Appendix 1, the following points are relevant in summary of the limitations of the CPI.
The CPI is built to reflect national and capital city price movements, for this purpose it:
is an average of prices across Australian capital cities;
does not have representation from regional cities and towns;
has a bias in sample size towards the largest capital cities; and
sets variation in the quantity component of the expenditure equation and applies these
as averages for all of Australia, when consumption will vary by household and location.
4
Australian Bureau of Statistics, 2006, A Guide to the Consumer Price Index, 15th Series, 2005 (cat. no. 6440.0)
5
As the CPI measures average consumption for a notional household, it does not reflect how
changes in prices impact differently on specific households, such as various income groups and
family composition households, resulting from different patterns of consumption. Importantly, it
does not reflect the disproportionate effect of the price rise in essentials on low income
consumers. For different households in different stages of the lifecycle, these cost pressures can
be considerable.
The CPI is often used as an indexation reference for various Commonwealth and State income
support payments5 and concessions. As discussed, inflation and cost of living indicators are two
separate constructs, and the former does not match the impact that price and expenditure has
on households and which income support and concession payments aim to assist.
The Commonwealth’s compensation package for the carbon price will also be indexed to the
CPI. The Commonwealth notes that the impact of the carbon price is based on estimates for
the average household, and that actual expenditure may vary depending on “household size,
composition, expenditure preferences and energy sources”6. This analysis highlights the extent
that indexation to the CPI will not meet expenditure for specific households.
THE ANALYTICAL LIVING COST INDEXES FOR SELECTED AUSTRALIAN
HOUSEHOLD TYPES
The ALCIs7 are specifically designed to measure changes in living costs for four selected
population subgroups:
Employee households8;
Age pensioner households9;
Other government transfer recipient households10; and
Self-funded retiree households11.
Main conceptual differences between CPI and ALCI
A living cost index reflects changes over time in the purchasing power of the after-tax incomes
of households. It measures the impact of changes in prices on the out-of-pocket expenses
incurred by households to gain access to a fixed basket of consumer goods and services.
5
Information from http://www.centrelink.gov.au/internet/internet.nsf/payments/pay_cpi.htm, accessed on 25 February 2011:
“Most payments are adjusted in line with the Consumer Price Index (CPI) but other payments are adjusted by changes in
legislation. At the same time the maximum rate of payment is changed, the single rate of pension payments is also checked. If
necessary, the single payment rate is increased to make sure it does not fall below 27.7% of the Male Total Average Weekly
Earnings (MTAWE) figure.“
6
http://www.cleanenergyfuture.gov.au/clean-energy-future/securing-a-clean-energy-future/#content05. Accessed on 6 September 2011.
7
Australian Bureau of Statistics, 2011, Analytical Living Cost Indexes for Selected Australian Household Types, Dec 2010. Cat.
no. 6463.0.
8
Employee households are those households whose principal source of income is from wages and salaries.
9
Age pensioner households are those households whose principal source of income is the age pension or Veterans Affairs
pension.
10
Other government transfer recipient households are those households whose principal source of income is a government
pension or benefit other than the age pension or Veterans Affairs pension.
11
Self-funded retiree households are those households whose principal source of income is superannuation or property
income and where the household Expenditure Survey (HES) defined reference person is ‘retired’ (not in the labour force and
over 55 years of age.
6
The CPI, on the other hand, is designed to measure price inflation for the household sector as
a whole and is not the conceptually ideal measure for assessing the changes in the purchasing
power of the disposable incomes of households.
CPI estimates are calculated separately for each of the eight capital cities. While whole of
population subgroup estimates for the ALCI can only be calculated at the national level, due to
the small sample size.
The CPI uses an acquisitions approach, while the ALCIs use an outlays approach. In practice,
for most goods and services purchased by the reference population, outlays and acquisition
occur within a relatively short space of time. There are three areas of expenditure in which
these conceptual approaches provide significantly different results12:
purchase of dwellings
purchase of durable items
financial services and the use of credit.
Although the ALCIs are further detailed in Appendix 1, some of the main differences in item
coverage are highlighted in Table 2 below.
Table2: Differences from CPI and ALCI
Item coverage
Net purchase of housing and the increase in volume
of housing due to renovations and extensions
Interest paid on mortgages
Maintenance costs and council rates
Consumer credit charges
Insurance premiums paid by households less the
amounts reimbursed by way of claims
Gross value of insurance premiums paid by
households
CPI
Included
ALCI
Not included
Not included
Included
Not included
Included
Included
Included
Included
Not included
Not included
Included
PRICE
Jurisdictional price comparisons
Although jurisdictional comparisons for changes in price are covered in Appendix 1, some
comparisons and explanation of CPI methodology is warranted.
The following uses electricity as an example of what constitutes a price and a unit for sale. The
ABS obtains electricity charges quarterly from energy authorities, and both concessional and
standard rates are priced. Current charges are applied to estimates of annual consumption to
derive the annual payment in the current quarter's prices. Connection fees, delivery and similar
12
For a discussion of the relationship between the ALCIs and CPI, see Australian Bureau of Statistics 2011, Analytical Living
Cost Indexes for Selected Australian Household Types, Mar 2011; Explanatory Notes (cat. no. 6463.0).
7
charges are included as part of the price13. Therefore a calculation takes place to alter average
annualised consumption of electricity and its price into quarters. The term ‘CPI price of
electricity’ is therefore not strictly price, as would be seen on an Aurora bill, which indicates per
unit charges for the different tariffs a customer uses.
Tasmania has the highest average consumption of electricity per capita, which would contribute
to placing it as the highest in a jurisdiction comparison, as seen in Figure 1. Tasmania, along with
other jurisdictions, has had large price changes in recent years. Most capital cities, except
Darwin and Perth, have had increasing price movement in the last ten years that is substantially
above the CPI. Hobart was no exception, and in 2010 and 2011 experienced a continued
increase when other capital cities, such as Adelaide and Melbourne declined.
Figure 1: Inter-jurisdictional comparison of movement in electricity prices
Another example of the difficulty of measuring prices is seen with hospital and medical
expenses, an expenditure class of the Health price group. Once price and units of medical
services are established, the issue of subsidies is examined. The ABS examines the medical
services that are subject to subsidies under the Medicare Benefits Schedule, measured using
administrative data and a sample of services seen as representative of the consumption of the
population. Again, data is obtained quarterly and includes pricing data for services provided,
bulk billing and rebates for services, so that net prices are shown14. Figure 2 indicates interjurisdictional price movements for hospital and medical services.
13
Information Paper, Consumer Price Index: Concepts, Sources and Methods Australia, ABS, 2009 Cat. 6461.0. Page 61.
14
Information Paper, Consumer Price Index: Concepts, Sources and Methods Australia, ABS, 2009 Cat. 6461.0. Page 66.
8
Figure 2: Inter-jurisdictional comparison of movement in hospital and medical prices
Goods such as food present their own issues when considering the need to maintain the
quality of goods within the CPI, as the CPI represents a ‘fixed-basket’ of goods and services.
The term ‘fixed-basket’ is used as the ABS aims to keep the contents of the basket fixed, so
that prices of group, such as food, is relative to the same group of food throughout the life of
the index. For example, a brand of sauce may come and go over the life of the food index, but
the sauce type needs to be replaced when it does, so the price contribution of sauce to the
index can be maintained. Figure 3 compares food price changes between jurisdictions.
Figure 3: Inter-jurisdictional comparison of movement in food prices
9
Tasmanian price movements
Over the past five years, the prices of some items in the CPI basket of goods and services have
been flat or falling, while others have been rising. Due to factors such market demand being
met through low-cost imports and Australia’s foreign exchange rate, some items such as new
cars, furniture, electronic goods, TVs and computers, and clothing have either decreased or
increased less in price than the overall inflation rate.
Figure 4 shows the difference in percentage between essential services and the Hobart CPI15.
Housing has been disaggregated to show its sub-components of rents and utilities (which
includes electricity, gas and other household fuels, and water and sewerage). Many essential
services have increased above the CPI over the last five years (from the March 2006 to March
2011 quarters), with utilities increasing the most.
Figure 4: Difference in price change between the CPI and essential services
When viewing other prices, high price increases for essential services are offset by prices in
other areas that are below the CPI. This balances out the notional ‘average household cost’
represented by the CPI.
15
Percentage change of the CPI deducted from the change in the price group.
10
Figure 5: Difference in price change between the CPI and other price groups
EXPENDITURE
Households have varying expenditure patterns and varying capacities to absorb price increases.
Households have different expenditure patterns based on the life cycle of its occupants,
number of household members, location and financial resources. In order to maintain their
standard of living, people change their spending habits when confronted with difficult cost
choices. They ration or substitute, or sometimes go without. Australia has no true cost-ofliving index that takes such actions into account.
The discourse on poverty, deprivation and cost of living includes the subjectivity on what is
considered essential and therefore non-discretionary and discretionary spending. Community
expectations have helped define what is acceptable for a modern standard of living. For
example, while the CPI price groups of communications and recreation may be considered
non-essential and therefore linked to discretionary spending, the internet (CPI group communications) is important for accessing the increasing number of public and private services
online and a holiday (CPI group - recreation) once a year is considered important in balancing
work/life commitments and avoiding deprivation16.
Figure 6 indicates expenditure patterns for the all-households group across the CPI price
groups for Australia. The term all-households is used for expenditure data that has not been
disaggregated into particular household types and it is the household type that represents the
average expenditure.
16
Just over 60% of those surveyed considered a one week holiday away from home a year as important in Saunders’ et al
study on deprivation. See Saunders, P., Naidoo, Y., and Griffiths, M., Towards New Indicators of Disadvantage: Deprivation and Social
Exclusion in Australia, Social Policy Research Centre, November 2007.
11
Figure 6: Australian all-households expenditure
When examining the housing sub-groups for Australian expenditure, Figure 7 shows the
expenditure amounts as a percentage for the items constituting housing, which are, rents
(4.8%), utilities (2.8%) and other housing (13.2%).
Figure 7 also shows the utilities sub-group for Australian expenditure. The expenditure
percentages for the items constituting utilities are, electricity (1.6%), gas and other household
fuels (0.5%), and water and sewerage (0.7%).
Figure 7: Australian expenditure, housing sub-groups and utilities expenditure classes
12
Figure 8 indicates expenditure patterns for the all-households group for Tasmania, which
represents the average expenditure, across the CPI price groups.
Figure 8: Tasmanian all-households expenditure
When examining the housing sub-groups for Tasmanian expenditure, Figure 9 shows the
expenditure amounts as a percentage for the items constituting housing, which are, rents
(3.4%), utilities (3.4%) and other housing (13.8%).
Figure 9 also shows that the utilities sub-group for Tasmanian expenditure is constituted from
electricity (2.8%), gas and other household fuels (0.4%), and water and sewerage (0.1%).
Figure 9: Tasmanian expenditure, housing sub-groups and utilities expenditure classes
13
RELATIVE PRICE INDEX
INTRODUCTION
The RPI model utilises HES expenditure data by various income, family composition and tenure
types, for Australia or Tasmania where HES sampling was sufficient for the ABS to supply
expenditure data at its most disaggregated form17.
The benefit of the model is that when used with CPI derived expenditure weights, the average
expenditure of the RPI aligns to the CPI as a proof of concept. When the quantities are
modified by HES expenditure data for particular households, the model provides indicative
indexes of expenditure across the CPI basket for particular household types. Analysis of this
expenditure provides a method for understanding cost of living pressures.
Unlike the Strategy, this report contains all RPI household types analysed for cost of living
impacts. The strategy contains a reduced set of the full RPI households to provide a sample of
household types across income source and level, tenure and family composition. The sample
was also chosen to reduce the likelihood of representing the same or similar population cohort,
as the households are not mutually exclusive.
There are six main groups of households used in this report, from which samples were used for
the Strategy. Attachment 1 contains further detail on the household groups, their definitions
and use in the Strategy. In summary, the groups are:
The All-households type. This household represents the average expenditure for the
specified region (Tasmania or Australia).
Contribution of government pensions and allowances (GPA) to income group. The
GPA household types include household expenditure divided into four categories,
defined by the percentage that GPA’s contribute to the household’s income. The ranges
are 1-20%, 20-50%, 50-90% and 90-100%. These households have a limit to the
incomes they receive, for example the GPA, 90-100% household receives at least 90%
of its income from pensions and allowances, which is means-tested by the
Commonwealth to meet eligibility requirements.
Income quintile and decile group. The quintile group has five household types within it,
defined by income ranges (or quintiles). The lowest income range is the first quintile
household, followed by the second, third, fourth and highest (fifth) quintile.
The decile group has ten households within it, which are also defined by income ranges.
There are ten income ranges (or deciles), with the lowest income household being the
first decile. This analysis does not use any of the individual decile households, it uses
expenditure data for the combination of the second and third decile households, as this
is accepted by the ABS to be the most accurate representation of low income
households.
17
A range of the RPI households use Australian expenditure weights multiplied by Tasmanian prices to determine household
costs, due to limitations in the Tasmanian sample sizes in the HES.
14
The income source group. This group is defined by the source of income. This includes,
households receiving different types of government pensions and allowances, income
from a business, wages and salaries and other income sources, which includes
superannuation. Again, households such those receiving government pensions and
allowances would have limited income due to the eligibility requirements set by the
Commonwealth.
The family composition group. This group is defined by the family composition and
includes couple and single families with or without dependent children.
The tenure type group. This group is defined by the tenure of the household, which
includes households that own or are purchasing their home, with and without a
mortgage, and those households renting.
DISPROPORTIONATE IMPACTS OF PRICE
The following information explains household expenditure modelled through the RPI. As the
RPI utilises CPI price data and HES expenditure data, the CPI price indexes and expenditure
data are further explained below.
Price Groups
General observation of the CPI price groups show that:
The Australian economy has seen long term general growth, therefore it is an
inflationary, not deflationary economy. This means that many price indexes are
increasing and the purchasing power of money is being de-valued. The rate of growth is
an important economic indicator and is often measured as an annual percent change,
which is an economic indicator referred to as the annual rate of inflation.
According to Reserve Bank objectives, the desirable annual rate of inflation should be
between 2% and 3%. Average annual movements in the CPI for both Hobart and for
Australia have been broadly in line with this aim over the past five years . Inflation can
impose additional cost burdens on households. Rises in inflation can reduce the
purchasing power of money and put pressure on wages18.
The rate of change in an index is critical to understanding cost pressures. This is
reflected in a price group’s rate of change over time, where a steady increase can strain
household budgets. Volatility seen through jumps in price within a short period of time
are price shocks, where a dramatic increase in price impacts on a household’s ability to
cash flow costs during a short period of income. When price shocks are combined with
any strain already underway, households with low financial resources are left with little
to no capacity to absorb price movements, leading to financial crisis.
The introduction of the Goods and Services Tax in June 2000 generated price increases
across most groups.
Indexes for regulated prices often appear stepped, as pricing policy is implemented from
the beginning of the financial or calendar year. Other stepped price increases are due to
the sampling of the CPI survey process, where annual prices are determined then
divided into quarterly amounts to determine their contribution to a quarterly index.
18
Australian Bureau of Statistics 2010, Measures of Australia’s Progress, Sep 2010: Inflation (cat. no.1370.0)
15
Notwithstanding the role of regulators, price change for essential services is often above
the CPI for Australia.
Although price groups sampled in the analysis are above the CPI, other price groups are
below, generating the average that is the CPI.
To explain some of these points, the price movement for the housing sub-group of utilities is
detailed below.
UTILITIES
Figure 10: Utilities CPI index, Hobart
When looking at CPI time series data for Hobart from the March 1990 to March 2011 quarter
(Figure 10) there are a number of general observations:
The ABS collects electricity, gas, water and sewerage charges quarterly from the energy
authorities and local councils, and both concessional and standard rates are priced.
Connection fees, delivery and similar charges are included as part of the price of the
utility service19. Current charges are applied to estimates of annual consumption of
electricity, gas and water, which is then divided by four to determine a quarterly price.
The dividing of the annual price into a quarterly price often gives the effect of a stepped
approach to price increases for the indexes, as the same price is recorded for all
quarters of a year.
The gas and other household fuels expenditure class includes natural and LPG gas and
firewood. There has been occasional price volatility throughout the index. Some of the
volatility may have been influenced by regulation change (Commonwealth Government
deregulating the wholesale price of LPG in Australia in January 1991), and increased
19
ABS, Consumer Price Index, Concepts, Sources and Methods, CAT 6461.0, 2009.
16
demand for natural gas through distribution to households during the roll-out of stage
two of the natural gas project in 2007.
The magnitude of price increases varies by energy source, which will disproportionately
impact households. For example, in the last 12 months, gas and other household fuels
has increased in price by 2.1%, whereas electricity has increase by 15.9%. Those
households that use firewood as an energy source for heating (combustion heaters) are
impacted less than those consuming electricity as a heating energy source.
Two of the largest price rises for electricity occurred in the March 2008 quarter (12.2%
increase from the previous March quarter) and from the beginning of the 2010-11
financial year to March 2011 quarter (9.3%).
There is still change in utility prices to be expected in Tasmania due to structural
reform. For example, full price determination for water and sewerage (which will be
determined by the Office of The Tasmanian Economic Regulator - OTTER) is due to
commence on 1 July 2012, when, prior to this (the transition period), maximum
increases were set by the Tasmanian Government through an interim price order.
OTTER expects that full cost recovery will not be achieved for the three water
corporations by the end of the transition period and prices may rise20.
Expenditure
The household types are not necessarily mutually exclusive between income source,
income level and tenure and family composition households. Expenditure data for
households in an income category could come from households of all types of family
composition and tenure type. Similarly, households defined by family composition
contain varying income levels and tenure type. Finally, tenure households contain all
income levels and family composition types.
There may also be crossover within households defined by income type. For example,
due to the level of income, the expenditure of the household type Contribution of GPAs
to Income-50% to less than 90% may also include expenditure data from Income quintile
of household-Second and third deciles households.
As there was a focus in the analysis on lower income households, the various household
compositions were chosen to provide disaggregated views of household expenditure
for analysis.
The household that constitute the group of Contribution to GPAs to income…
households are mutually exclusive within their own group. The quintile range of
households represents expenditure data modelled for the full Tasmanian population,
and are therefore exclusive by the income ranges that define them.
To explain some of these observations, the household expenditure patterns on utilities is
detailed below. The analysis splits the households into income source/level and family
composition/tenure. The following tables show expenditure patterns by household types from
highest to lowest, with the sample sorted to include only those households expending more
than the Tasmanian average, in this case, the average is 3.4% for utilities.
20
“Relative to the previous 10 per cent annual price caps, the five per cent caps and Government assistance, which ceases on
30 June 2012, has the effect of increasing pressure for price increases after that time and/or prolonging the period in which full
cost recovery can be achieved.” OTTER News, Office of the Tasmanian Economic Regulator, March 2011, page 2.
17
The tables show expenditure as a percentage of the total expenditure of the household,
referred to as expenditure weights. They also show expenditure in dollar terms as average
weekly household expenditure (AWHE)21, which approximates dollars spent on the referenced
item.
Table 3: Expenditure on utilities by income source and level household types
Expenditure
weights
AWHE –
March 2011
Contribution of GPAs to Income-90% and over
5.9%
$36.6
Income quintile of household-Second and third deciles
5.0%
$40.8
Income quintile of household-Lowest quintile
5.0%
$38.9
Contribution of GPAs to Income-50% to less than 90%
4.8%
$42.3
Government pensions and allowances-Unemployment/
sickness/ education allowance
4.6%
$35.8
Government pensions and allowances-Age/disability
pension
4.6%
$31.0
Income quintile of household-Second quintile
4.0%
$43.6
Government pensions and allowances-Other
4.0%
$37.1
Contribution of GPAs to Income-20% to less than 50%
3.6%
$48.0
Income quintile of household-Third quintile
3.6%
$44.2
All households - Tasmania
3.4%
$43.6
All households - Australia
2.8%
$45.3
Household type
Table 3 shows that the household Income quintile of household-Second and third deciles has 5.0%
of its total weekly expenditure on utilities. This is 2.2% above the average expenditure for
Australia. Although this household is second highest for expenditure weight, it spends more in
dollar terms ($40.8) than the highest expenditure weight household, Contribution of GPAs to
Income-90% and over ($36.6). This reflects differences in economic resources between
households. The difference is not just influenced by incomes, the eligibility and take-up rate of
subsidies and concessions can influence household economic resources. The implication of this
is that low expenditure in dollars, does not necessarily mean that some households manage to
find cheaper goods and services, but that major social interventions such as concessions, or in
the health group, Medicare, are making important contributions to lowering costs.
Table 4 shows expenditure on utilities by family composition and housing tenure. Single parent
families have higher expenditure weights than the average for Australian and marginally higher
than the average for Tasmania. House owners without mortgages are the only tenure type to
be expending above the average for Tasmania and Australia.
21
The Average Weekly Household Expenditure (AWHE) indicates in nominal dollar terms the amount that the households
would spend per week if prices were inflated to March 2011 CPI quarter prices. These are approximate and were calculated
through inflating expenditure dollars from 2005 HES data (concorded to CPI price groups) by the change in the relevant CPI
price indexes.
18
Table 4: Expenditure on utilities by family composition and tenure household types
Expenditure
AWHE Household type
weights
June 2011
One parent, one family households with two dependent
child only
3.8%
$42.3
Lone person household
3.7%
$29.9
One parent, one family households with one dependent
child only
3.6%
$36.4
Tenure Type-Owner without a mortgage
3.5%
$40.6
All households - Tasmania
3.4%
$43.6
All households - Australia
2.8%
$45.3
Electricity is an expenditure class of the utilities sub-group. Although the analysis was conducted
at the price group and sub-group level, some prices at the expenditure classes were included
due to high price movements or their fundamental requirement as an essential. The
expenditure class of electricity falls into this category. The example continues in Table 5, which
has been sorted to include only those households expending more than the Tasmanian average
on electricity, at 2.8%. The households with highest expenditure weights are low income
households, lead by Contribution of GPAs to Income-90% and over. 60% of Tasmanian households
expend above the average, represented in the lowest, second and third quintiles.
Table 5: Expenditure on electricity by income level and source household types
Expenditure
weights
AWHE March 2011
Contribution of GPAs to Income-90% and over
4.9%
$31.7
Income quintile of household-Second and third
deciles
4.1%
$34.4
Income quintile of household-Lowest quintile
4.0%
$32.2
Contribution of GPAs to Income-50% to less than
90%
3.9%
$35.2
Income quintile of household-Second quintile
3.4%
$38.4
Contribution of GPAs to Income-20% to less than
50%
3.2%
$43.7
Income quintile of household-Third quintile
3.1%
$40.2
All households - Tasmania
2.8%
$38.1
All households - Australia
1.6%
$25.0
Household type
The following analysis continues the explanation of price movement and household
expenditure levels across the essential services and concludes with recreation and alcohol and
tobacco. In policy discussions on deprivation, recreation is often seen as essential, particularly as
computers are required to online services and information sources. Alcohol and tobacco is
included as it is a relevant public health issue in Tasmania.
19
FOOD
Price
Figure 11 shows that the Hobart fresh food index has moved away from the Australian CPI
since 2002, and at close to 20 points above by 2011. Food prices are market driven, and one of
the most exposed groups to price volatility due to climate events. This is seen in the fresh food
index with high fluctuations in price during 2006-2007 when drought, floods and cyclone Larry
impacted on food production.
Figure 11: Fresh food CPI index – Hobart
Expenditure
Food is one of the main contributors to the CPI and RPI indices, seen through the high
expenditure weight across both Tasmanian and Australian all-households groups in Table 6.
The average Tasmanian expenditure is higher than that for Australia, with a 2.4% difference.
The lowest, second, third and fourth quintiles (80% of the population) all expend marginally
higher than the average on food. The top five households in the table are all low income
households. The high expenditure on food for low income households, and the high volatility in
price means the food group could be one of the hardest household costs to manage.
Table 6: Expenditure on food by income source and level household types
Expenditure
weights
AWHE March 2011
Contribution of GPAs to Income-90% and over
21.3%
$112.0
Income quintile of household-Second and third deciles
20.5%
$141.3
Contribution of GPAs to Income-50% to less than 90%
19.7%
$146.0
Government pensions and allowances-Other
19.3%
$153.4
Household type
20
Government pensions and allowances-Age/disability
pension
19.0%
$107.9
Income quintile of household-Third quintile
18.0%
$188.8
Income quintile of household-Lowest quintile
17.5%
$115.8
Government pensions and allowances-Unemployment/
sickness/ education allowance
17.3%
$112.9
Income quintile of household-Second quintile
16.9%
$157.8
Income quintile of household-Fourth quintile
16.9%
$240.9
Contribution of GPAs to Income-20% to less than 50%
16.8%
$187.5
All households - Tasmania
16.0%
$176.3
All households - Australia
13.6%
$175.8
When looking at expenditure on food by family composition and tenure type (Table 7), the
only composition based household expending above the Tasmanian average is One parent, one
family households with two dependent child only.
Table 7: Expenditure on food by family composition and tenure household types
Expenditure
weights
AWHE March 2011
One parent, one family households with two dependent
child only
17.3%
$160.8
Tenure Type-Owner without a mortgage
16.8%
$167.8
Tenure Type-Renter
16.6%
$151.1
All households - Tasmania
16.0%
$176.3
All households - Australia
13.6%
$175.8
Household type
HOUSING
Price
Figure 12 shows the price group of housing, which includes rents, utilities (covered already) and
other housing. Although the utilities index is substantially higher than the housing index, the
latter closely follows one of its sub-group items, the other housing index. This indicates other
housing has the largest contribution to the housing price group, as seen in figures 7 and 9.
21
Figure 12: Housing CPI index – Hobart
Expenditure
The Income quintile of household-Second quintile household proportions nearly a third (30.6%) of
its total expenditure on housing. A range of low to middle income households have
expenditure weights above the average for Tasmania. As the sub-group ‘other housing’ is a
large contributor to the housing group, and other housing includes house purchase, property
rates and charges and repairs and maintenance, these households are likely to be house
purchasers.
Table 8: Expenditure on housing by income level and source household types
Household type
Expenditure
weights
AWHE March 2011
Income quintile of household-Second quintile
30.6%
$292.6
Contribution of GPAs to Income-1% to less than 20%
27.5%
$408.0
Government pensions and allowancesUnemployment/ sickness/ education allowance
25.3%
$169.5
Contribution of GPAs to Income-90% and over
24.1%
$130.0
Income quintile of household-Lowest quintile
23.3%
$158.2
Contribution of GPAs to Income-20% to less than
50%
22.6%
$259.1
Income quintile of household-Second and third deciles
22.1%
$156.9
Income source of household-Wage and salary
21.7%
$353.9
Government pensions and allowances-Age/disability
pension
21.3%
$124.0
22
Contribution of GPAs to Income-50% to less than
90%
21.1%
$160.6
Income source of household-Own unincorporated
business income
20.9%
$314.1
All households - Tasmania
20.5%
$231.9
All households - Australia
20.8%
$274.9
Table 9 shows that Lone person households are expending over 6% more than the national and
State averages, with single and couple families around 4-5% more. The high expenditure in
dollar terms for Couple with three or more dependent children only ($520) is likely due to larger
houses to accommodate family size, therefore leading to higher housing costs.
Table 9: Expenditure on housing by family composition and tenure household types
Expenditure
weights
AWHE March 2011
Lone person household
27.1%
$191.3
One parent, one family households with one dependent
child only
25.9%
$225.0
Couple with three or more dependent children only
24.8%
$520.0
One parent, one family households with two dependent
child only
23.7%
$227.0
Tenure Type-Owner with a mortgage
23.5%
$381.8
Tenure Type-Renter
23.1%
$215.4
Couple with one dependent child only
21.3%
$350.5
All households - Tasmania
20.5%
$231.9
All households - Australia
20.8%
$274.9
Household type
RENT
The price index for rent is shown in Figure 12. The rent index includes both public and private
rent costs, therefore price comparison between these two is not possible.
Expenditure
The average expenditure on rent for Tasmania is lower than that of Australia. Although rent
expenditures are up to 7% higher for some low income households, it is difficult to gauge the
actual impact of rent as all of the households in Table 10 would include various tenure types,
including house owners.
23
Table 10: Expenditure on rent by income source and level household types
Expenditure
weights
AWHE March 2011
Government pensions and allowancesUnemployment/ sickness/ education allowance
10.8%
$72.4
Contribution of GPAs to Income-90% and over
10.4%
$56.0
Income quintile of household-Second and third deciles
8.4%
$59.4
Income quintile of household-Lowest quintile
7.0%
$47.7
Government pensions and allowances-Age/disability
pension
5.9%
$34.5
Contribution of GPAs to Income-20% to less than
50%
5.1%
$58.5
Income source of household-Wage and salary
4.5%
$73.6
Contribution of GPAs to Income-50% to less than
90%
4.4%
$33.2
Income quintile of household-Second quintile
4.1%
$39.7
Income source of household-Own unincorporated
business income
3.5%
$53.5
All households - Tasmania
3.4%
$38.0
All households - Australia
4.8%
$63.3
Household type
Table 11 gives the closest measure of the impact of rent on a household’s budget, as it includes
the tenure type renters, which by definition, does not incur costs for house ownership.
Similar to income defined households above, the other family composition households would
also have varying expenditures on rent due to mixed tenure types influencing expenditure
levels.
Table 11: Expenditure on rent by income source and level household types
Expenditure
AWHE Household type
weights March 2011
Tenure Type-Renter
19.6%
$183.9
One parent, one family households with one
dependent child only
13.9%
$121.6
One parent, one family households with two
dependent child only
11.7%
$112.2
Lone person household
9.0%
$63.9
Couple with one dependent child only
3.8%
$61.9
All households - Tasmania
3.4%
$38.0
All households - Australia
4.8%
$63.3
24
HEALTH
Price
Figure 13 shows that the index for health is influenced upwards by the high increase and
contribution of health services to the total health price, while pharmaceuticals continues to
cycle close to the CPI. The ‘jagged-tooth’ appearance of pharmaceuticals is likely caused by the
sampling of data throughout the calendar year. Prices decrease during this period due to
subsidisation through the Pharmaceutical Benefits Scheme, as thresholds for expenditure on
pharmaceuticals are reached. The health index includes both public and private health costs,
therefore price comparison between these two is not possible.
Figure 13: Health CPI index – Hobart
Expenditure
On average, Tasmanian households have health expenditure weights at 1.4% higher than the
average for Australia. Table 12 indicates that the mixed income household of Contribution of
GPAs to Income-20% to less than 50% has the highest expenditure at 3.6 above the Australian
average and the highest dollar expenditure. The difference between the high expenditure in
weight and dollar terms for households Government pensions and allowances-Age/disability
pension and Income quintile of household-Third quintile likely points to the need to spend high for
the former, due to declining health through age, and the capability to spend high for the latter,
due to higher financial resources.
Table 12: Expenditure on health by income source and level household types
Expenditure
weights
AWHE March 2011
Contribution of GPAs to Income-20% to less than 50%
6.5%
$72.4
Government pensions and allowances-Age/disability
6.1%
$34.7
Household type
25
pension
Income quintile of household-Third quintile
5.4%
$56.7
Contribution of GPAs to Income-50% to less than 90%
5.0%
$36.8
Income quintile of household-Second quintile
4.9%
$45.4
Income source of household-Own unincorporated
business income
4.8%
$69.9
Income quintile of household-Second and third deciles
4.6%
$31.5
All households - Tasmania
4.3%
$47.5
All households - Australia
2.9%
$37.9
Table 13 indicates that home owners have a higher proportion of expenditure on health.
Couples without dependants also tend to have a higher expenditure on health, likely due to
financial capacity, while lone person households spend high and have low financial capacity (see
table 24).
Table 13: Expenditure on health by family composition and tenure household types
Expenditure
weights
AWHE March 2011
Tenure Type-Owner without a mortgage
6.0%
$59.5
Couple only
5.7%
$72.3
Lone person household
5.2%
$36.1
Couple with one dependent child only
4.6%
$73.8
All households - Tasmania
4.3%
$47.5
All households - Australia
2.9%
$37.9
Household type
TRANSPORT
Price
The index for transport has closely followed the prices for private motoring, as the latter is the
major contributor in expenditure (92%) to the overall Transport index. Notwithstanding this,
the sub-price group of urban transport fares, which consists of buses and taxis in Tasmania, is
subject to Government price regulation and exceeds other indices by nearly 100%.
26
Figure 14: Transport CPI index – Hobart
Expenditure
Table 14 indicates that when all compositions are combined, there are only three household
types expending above the Tasmanian average for transport. Private motoring and urban
transport fares have been included to indicate the proportions they contribute to the total
expenditure weight of Transport. Private motoring includes car purchase, therefore it is
unsurprising that Income quintile of household-Fourth quintile – a middle to high income bracket
household, is leading transport expenditure.
Table 14: Expenditure on transportation by all household types
Household type
Income quintile of householdFourth quintile
Income quintile of householdLowest quintile
Tenure Type-Owner without a
mortgage
All households - Tasmania
All households - Australia
Transportation
Private motoring
Urban transport
fares
Weights
AWHE
- March
2011
Weights
AWHE
- March
2011
Weights
AWHE
- March
2011
19.5%
$244.9
19.2%
$240.5
0.3%
$3.6
14.2%
$82.5
14.0%
$81.0
0.2%
$1.3
14.2%
12.7%
12.6%
$124.0
$123.0
$142.4
13.9%
12.4%
12.2%
$121.4
$119.8
$137.5
0.2%
0.3%
0.4%
$2.3
$3.0
$4.8
URBAN TRANSPORT FARES
Table 15 shows that there is a marginal difference in expenditure between most households
and the Tasmania average, although it should be noted that Government pensions and
27
allowances-Unemployment/sickness/education allowance is expending over twice the amount.
Expenditure in dollar terms indicates that wage and salary earners are likely to be travelling
longer distances when spending on fares, and a likely influence of subsidises for Government
pensions and allowances-Age/disability pension.
Table 15: Expenditure on transport fares by income source and level household types
Expenditure
AWHE Household type
weights March 2011
Government pensions and allowances-Unemployment/
sickness/ education allowance
0.8%
$5.3
Income source of household-Wage and salary
0.6%
$10.0
Government pensions and allowances-Age/disability
pension
0.4%
$2.4
Income quintile of household-Highest quintile
0.4%
$7.3
Government pensions and allowances-Other
0.4%
$3.4
Income source of household-Other income
0.4%
$5.3
All households - Tasmania
0.3%
$3.0
All households - Australia
0.4%
$4.8
Table 16 shows that Lone person households, likely to be constituted of older people (see
commentary for Table 24), expends the most on fares, followed by households with
dependent children.
Table 16: Expenditure on transport fares by family composition and tenure household types
Expenditure
AWHE Household type
weights March 2011
Lone person household
0.6%
$4.4
One parent, one family households with one dependent
child only
0.6%
$5.0
Couple with one dependent child only
0.5%
$8.5
One parent, one family households with two dependent
child only
0.5%
$4.3
Couple only
0.5%
$5.7
Tenure Type-Renter
0.4%
$3.3
All households - Tasmania
0.3%
$3.0
All households - Australia
0.4%
$4.8
EDUCATION
Price
Figure 15 shows that the price index for education in Tasmania has steadily outpaced the CPI
for Australia since 1990 (an additional 77.9%). The price indexes for the education sub-groups
28
are lower than the CPI as their reference base is June 2000. The stepped nature of the
education index reflects that fees are set at the beginning of the calendar year. The price for
education includes both public and private education costs, therefore price comparison
between these two is not possible.
Figure 15: Education CPI index – Hobart
Expenditure
Table 17 shows that when looking at expenditure weights, Tasmania is very close to the
Australian average (all households are within 1%). The dollar expenditures also closely aligned
to the weights, indicating that household expenditure in weight and dollar terms are similarly
proportioned. The exception is the highest household by expenditure weight – Income source
of household-Wage and salary, which expends slightly lower in dollar terms than Income quintile
of household-Highest quintile. All of these households would not be considered as low income
households (Income decile of household-Second and third deciles has an expenditure weight of
0.2%, reflecting subsidisation of costs to low income households).
Table 17: Expenditure on education by income source and level household types
Expenditure
AWHE Household type
weights March 2011
Income source of household-Wage and salary
2.2%
$35.2
Income quintile of household-Highest quintile
2.1%
$35.7
Contribution of GPAs to Income-1% to less than 20%
2.1%
$30.1
Income source of household-Own unincorporated
business income
2.0%
$29.0
Income quintile of household-Fourth quintile
1.4%
$20.8
All households - Tasmania
1.4%
$15.3
All households - Australia
1.3%
$16.8
29
Table 18 shows the degree that larger families have higher education costs. The household
Couple with three or more dependents has over double the expenditure in dollar terms than
other households. The fact that households defined by composition, including types such as
One parent, one family households with two dependent child only have higher expenditures than
income based households, may be reflecting that the eligibility requirements of the Student
Assistance Scheme includes an income test and does not factor household size (households
defined by family composition and tenure include all income levels).
Table 18: Expenditure on education by family composition and tenure household types
Expenditure
AWHE Household type
weights March 2011
Couple with three or more dependent children only
4.3%
$89.0
One parent, one family households with two dependent
child only
3.2%
$30.3
Couple with one dependent child only
2.3%
$37.8
One parent, one family households with one dependent
child only
1.5%
$12.9
All households - Tasmania
1.4%
$15.3
All households - Australia
1.3%
$16.8
RECREATION
Price
Figure 16 outlines the various price groups that contribute to the recreation index for Hobart.
Although the index for books, newspapers and magazines is 40.2 points higher than the Hobart
CPI, most price items contributing to the recreation index are below the Hobart CPI by
approximately 46 points. Audio visual and computing is the one index that has decreased
dramatically over the reference period, reflecting the continuing trend for increasing quality and
decreasing price for technology goods.
Figure 16: Recreation CPI index – Hobart
30
Expenditure
Table 17 indicates that the households with medium to high incomes, are expending the most
on recreation in Tasmania, ranging from 0.3% below to 1.9% above the average for Australia. It
also shows that the Tasmanian average is marginally below the average for Australia.
Table 17: Expenditure on recreation by income source and level household types
Expenditure
AWHE Household type
weights March 2011
Income source of household-Other income
14.1%
$145.0
Income quintile of household-Highest quintile
14.0%
$194.2
Income source of household-Wage and salary
12.3%
$159.3
Income quintile of household-Third quintile
11.8%
$100.7
All households - Tasmania
11.3%
$101.5
All households - Australia
12.1%
$126.8
Table 18 indicates that couples, house owners and families with dependents all expend close to
the average, with Couples with three or more dependent children only expending the most in
dollar terms.
Table 18: Expenditure on recreation by family composition and tenure household types
Expenditure
weights
AWHE March 2011
Couple only
13.0%
$135.1
Tenure Type-Owner without a mortgage
12.8%
$103.8
Couple with three or more dependent children only
12.4%
$205.8
One parent, one family households with two dependent
child only
12.3%
$93.2
All households - Tasmania
11.3%
$101.5
All households - Australia
12.1%
$126.8
Household type
ALCOHOL AND TOBACCO
Alcohol and tobacco are included below to indicate the households that expend proportionally
more than the average. Appendix 1, discusses alcohol and tobacco in price and expenditure
further.
Price
Figure 16 indicates that the alcohol and tobacco index has been above the CPI for most of the
reference period and that although tobacco contributes less to the combined index, it is 213%
above the Hobart CPI. Therefore consumption of both alcohol and tobacco will represent a
high cost to households expending above the average. Arguable by design, as both goods have
price regulation to deliver price signals to consumers.
31
Figure 16: Alcohol and tobacco CPI index – Hobart
Expenditure
Both income and composition/tenure households are combined in Table 19 due to low
numbers of households expending above the Tasmanian average. The average expenditure
weight for Tasmania is 0.6% higher than the Australian average. There is also a mix of low to
high income households within a close range of expenditure by weight. However, in dollar
terms, expenditure ranges from $30.1 – $109, indicating variation in the price of the goods
purchased.
Table 19: Expenditure on alcohol and tobacco by all household types
Expenditure
weights
AWHE March 2011
Income quintile of household-Highest quintile
6.2%
$109.0
Income quintile of household-Second and third deciles
5.9%
$42.3
Contribution of GPAs to Income-90% and over
5.5%
$30.1
Government pensions and allowances-Unemployment/
sickness/ education allowance
5.3%
$35.6
Income quintile of household-Fourth quintile
5.2%
$77.4
Tenure Type-Renter
5.1%
$48.0
Income quintile of household-Third quintile
5.0%
$54.2
All households - Tasmania
4.9%
$56.4
All households - Australia
4.3%
$58.1
Household type
32
CUMULATIVE IMPACT OF COST OF LIVING
Low income households are particularly vulnerable to cost of living pressures, seen through
steady price squeezes and sudden shocks in essential services. While most people are affected
by cost of living changes, it is appropriate that policy attention focuses on the most vulnerable.
Price squeezes and sudden shocks often leave low income households left with little warning
and capacity to absorb price changes, leading to rationing and substitution.
When there are few options to substitute, households have to resort to rationing, at times
reducing consumption to below acceptable levels of living. When households cannot ration or
substitute any further, there is no capacity to absorb cost increases, and households require
assistance from extended networks and through the social safety net, including emergency relief
services.
The evidence in this report enables review of government income support, concessions and
regulated pricing regimes, to take into account that households are disproportionately impacted
by costs. This requires household based analysis by location to uncover the quantum of
hardship being faced in our communities and design appropriate policy responses.
The RPI research shows the households that are disproportionately impacted by high
expenditure and price across the essential services of food, housing, health, transport and
education22.
As seen previously, tables 20 and 21 splits households by income source/level family
composition/tenure, and provides expenditure as a percentage of total expenditure
(expenditure weight) and in dollar terms, as average weekly household expenditure (AWHE).
The top three expenditure weights are highlighted for reference using shaded squares, with the
darkest shade applied to the highest weight. Although an approximation, dollar figures are net
of tax and concessions, therefore represent actual expenses to households.
22
Households expending above the average was determined by comparing the total expenditure percentage across the essential services to
that of the average for Tasmania. Australian average (all households expenditure) figures are included for comparison, along with both
Tasmanian and Australian CPI figures.
33
Table 20: Expenditure on essential services by RPI household types of income source and level
Food
%
$
Housing
Health
%
%
$
$
Transportation Education
%
$
%
$
Total
%
$
Income quintile of household-Second quintile
16.9 157.8 30.6 292.6 4.9 45.4
9.2
75.2
0.7
6.6 62.2 577.5
Contribution of GPAs to Income-1 to less than 20
15.6 224.9 27.5 408.0 4.0 58.2
12.4
158.0
2.1
30.1 61.6 879.2
Contribution of GPAs to Income-90 and over
21.3 112.0 24.1 130.0 3.7 19.6
10.7
49.5
0.1
0.6 60.1 311.7
Income quintile of household-Lowest quintile
17.5 115.8 23.3 158.2 3.9 26.0
14.2
82.5
1.0
6.9 59.9 389.4
Contribution of GPAs to Income-50 to less than 90
19.7 146.0 21.1 160.6 5.0 36.8
12.3
80.0
1.0
7.5 59.1 430.8
Income decile of household-Second and third deciles
20.5 141.3 22.1 156.9 4.6 31.5
11.5
69.6
0.2
1.4 58.8 400.7
Contribution of GPAs to Income-20 to less than 50
16.8 187.5 22.6 259.1 6.5 72.4
11.7
114.3
0.1
1.2 57.7 634.6
Government pensions and allowances-Age/disability pension
19.0 107.9 21.3 124.0 6.1 34.7
10.7
53.4
0.1
0.6 57.2 320.6
Government pensions and allowances-Other
19.3 153.4 22.6 184.4 3.3 26.3
10.8
75.3
1.1
9.1 57.2 448.5
Income quintile of household-Fourth quintile
16.9 240.9 15.0 220.1 4.3 61.3
19.5
244.9
1.4
20.8 57.1 787.9
Government pensions and allowances-Unemployment/ sickness/
education allowance
17.3 112.9 25.3 169.5 2.4 15.8
9.6
55.1
1.3
8.8 56.0 362.2
Income source of household-Own unincorporated business
income
15.7 230.4 20.9 314.1 4.8 69.9
12.5
161.4
2.0
29.0 55.8 804.8
Income source of household-Wage and salary
14.8 235.4 21.7 353.9 4.2 66.6
12.2
170.3
2.2
35.2 55.0 861.5
All households - Tasmania
16.0 176.3 20.5 231.9 4.3 47.5
12.7
123.0
1.4
15.3 55.0 594.0
All households - Australia
13.6 175.8 20.8 274.9 2.9 37.9
12.6
142.4
1.3
16.8 51.2 647.8
34
Table 21: Expenditure on essential services by RPI household types of family composition and tenure
Food
%
$
Housing
Health
%
%
$
$
Transportation Education
%
$
%
$
Total
%
$
Couple with three or more dependent children only
16.0 326.2 24.8 520.0 4.0 81.2
10.0
180.3
4.3
89.0 59.1 1,196.6
One parent, one family households with one dependent child
only
15.2 129.0 25.9 225.0 2.9 24.7
11.8
87.6
1.5
12.9 57.3
479.3
Lone person household
13.5
93.1 27.1 191.3 5.2 36.1
10.7
64.9
0.7
5.1 57.3
390.4
One parent, one family households with two dependent child
only
17.3 160.8 23.7 227.0 3.4 31.6
9.2
75.7
3.2
30.3 56.9
525.4
Tenure Type-Renter
16.6 151.1 23.1 215.4 3.0 27.7
11.9
95.2
1.4
12.4 55.9
501.9
Tenure Type-Owner with a mortgage
14.5 228.7 23.5 381.8 3.7 58.1
12.6
174.5
1.3
21.4 55.6
864.5
All households - Tasmania
16.0 176.3 20.5 231.9 4.3 47.5
12.7
123.0
1.4
15.3 55.0
594.0
All households - Australia
13.6 175.8 20.8 274.9 2.9 37.9
12.6
142.4
1.3
16.8 51.2
647.8
35
The average expenditure across essential services in Tasmania is 3.8% higher than the
Australian average. It is important to note that there are differing financial resources
available to the households, for example, the household Income quintile of household-Second
quintile has the highest expenditure weight across both tables (62.2%) and an expenditure in
dollar terms of $577.5. However, Couple with three or more dependent children only from
Table 21 leads in dollar terms, with a total AWHE of $1,196.6, and a weight of 59.1%.
High expenditure and high income households often have high household wealth, (including
savings, credit, home ownership, investments etc) that can be utilised in financial crisis. This
is not the case for low income households. It is also important to note that households
categorised by the receipt of Commonwealth Government pensions and allowances have
income support payments adjusted for all other income sources, therefore their financial
resources are a known quantity and limited. For example, the third highest household by
expenditure weight from Table 20, Contribution of GPAs to Income-90% and over, has the
lowest expenditure in dollar terms compared to all other households in both tables
($311.7). This household has the highest proportion of income from government pensions
and allowances, and has the least income capacity to respond to financial crisis. Other at-risk
households include Contribution of GPAs to Income-50% to less than 90%, which receives
most of its income (50 - 90%) from pensions and benefits, with remaining income from
other sources such as wages and salaries. This household has a weight of 59.1% and AWHE
of $430.8. Lone person households would similarly be at-risk, with a weight of 57.3% and
AWHE of $390.4.
In the case of household Contribution of GPAs to Income-50% to less than 90, due to limited
financial resources, price squeezes and shocks could move it towards emergency relief, with
the medium term option of increasing work hours to lift financial resources (if the
opportunity to do so exists) or lessening work hours to increase concessions. In the case of
Lone person households, due to Tasmania’s ageing population, it is likely that this household is
constituted by a large proportion of older people, which may not have the option of raising
income through employment.
The data shows that the cumulative impact of price squeezes and shocks are
disproportionately distributed across Tasmanian households. Particular households are at
risk of crisis, which are hidden in macro-economic debates on consumption and price rises
at the national and state levels.
INCOME MODELLING
The income, workforce participation and financial stress modelling undertaken by
NATSEM23 uses a range of data sources and benchmarks to guide the inflation of data to
2011 levels for Tasmanian households. NATSEM’s Cost of living indicators for Tasmania, Final
Report (Appendix 3) gives a description of the modelling undertaken for this work.
When comparing financial capacity for the Tasmanian average household, Tasmania leads
most of the headline indicators for the lowest median income, highest poverty rate and
lowest labour force participation, with South Australia second. However, the ‘State of usual
23
NATSEM research conducted for the Social Inclusion Unit, DPAC.
36
residence’ for the ACT and the NT has been combined by the ABS as ACT/NT to reduce
the level of detail and protect the confidentiality of survey respondents. This will have an
impact on Tasmania’s ranking in the comparative analysis where the NT (if isolated in the
data) may have more significant results across the indicators.
The following defines the financial indicators:
Median income: The numerical centre for equivalised disposable income. This figure
is used instead of the average (mean), as averages are influenced by high and low
outlying results in a range of figures. It is also used to indicate the income figure that
is compared to the poverty rate.
Median income to Australian average: The median income as a percentage of the
Australian average.
Proportion of gross income from income support: The percent of households that
has income exclusively from income support payments.
EMTR, Effective Marginal Tax Rate: EMTR indicates the amount for every dollar
earned that is forgone through taxation or reduced income support payments.
EMTR can highlight the financial disincentives through the loss of income support
payments as low income households transition to wage and salary income. It can
also highlight disincentives to increasing wage and salary income due to moving into
higher marginal tax rates.
Poverty rate: 50 percent of the household median equivalised disposable income
for Australia.
Labour participation rate: Percentage of the household type in Tasmania that is
participating in the labour force.
House owner/purchaser to State total: the percentage of the household type that
owns or is purchasing their principal place of residence, compared to the State total
of households that are owned or being purchased.
The following focuses on those households with expenditure weights above the Tasmanian
average expenditure for essential services. This was done to examine those households that
have high expenditures, then compare income levels and sources, and financial participation
levels and barriers. The following tables provide data and commentary on the financial
indicators across jurisdictions, with a focus on Tasmania. Not all household types were
included due to data limitations24. The tables are constituted by households defined by
income level, source and family composition type. Each table has the most significant
indicator highlighted for reference25.
24
All tenure type and GPA households, and have been omitted due to insufficient data. The lowest quintile household has
been omitted due to the ABS preferring the second/third decile as representative of low income households.
25
Median income to Australian average is not highlighted as it is the median income in percentage terms.
37
Table 22: Financial capacity of Tasmanian income level households and all-households
TAS
NSW
VIC
QLD
SA
WA
ACT/
NT
614.0
730.0
749.0
741.0
698.0
774.0
936.0
740.0
83.0
98.6
101.2
100.1
94.3
104.6
126.5
100.0
15.7
9.9
10.2
10.0
12.5
7.9
4.3
9.9
EMTR (%)
26.7
28.4
27.0
27.7
26.7
29.2
30.1
27.9
Poverty rate (%)
10.7
6.9
7.5
6.5
8.5
5.6
4.3
7.0
Labour participation rate (%)
61.3
61.8
64.2
66.2
61.7
66.4
73.4
64.0
All households
Median income ($'s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
Aus
Income decile of household-Second and third deciles
Median income ($'s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour force participation
Rate (%)
House owner/purchaser to
State total (%)
434.0
432.0
435.0
442.0
430.0
436.0
447.0
434.0
58.6
58.4
58.8
59.7
58.1
58.9
60.4
58.6
69.6
59.5
62.3
63.9
71.1
54.3
49.8
61.6
17.1
17.2
14.5
16.2
17.0
19.8
16.9
16.6
6.4
9.5
8.3
8.6
8.8
6.5
11.0
8.7
28.7
31.3
29.7
27.5
25.4
35.7
41.2
30.2
20.7
21.5
19.8
19.1
21.7
20.7
6.6
20.2
521.0
516.0
514.0
517.0
514.0
505.0
519.0
515.0
70.4
69.7
69.5
69.9
69.5
68.2
70.1
69.6
41.4
42.2
37.9
41.5
45.8
36.8
31.3
40.5
30.5
27.2
28.1
28.7
31.7
31.3
29.5
28.6
-
-
-
-
-
-
-
-
45.4
39.9
46.3
43.3
38.1
45.5
60.4
43.0
21.5
18.2
20.2
16.7
18.9
17.9
7.9
18.3
Second Quintile
Median income ($'s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
Income quintile of household-Fourth quintile
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
909.0
926.0
937.0
923.0
920.0
943.0
923.0
929.0
122.8
125.1
126.6
124.7
124.3
127.4
124.7
125.5
1.5
1.8
2.1
1.9
1.5
1.2
1.4
1.8
39.7
39.4
31.8
32.8
33.6
32.6
32.5
34.6
-
-
-
-
-
-
-
-
82.1
75.4
79.7
84.5
82.5
78.2
79.9
79.5
20.1
20.0
22.1
20.8
19.4
23.0
24.8
21.1
Tasmania leads all indicators except EMTR for the all households group, which
represents the average of each jurisdiction. Tasmania has the lowest median income
and highest proportion of gross income from income support. This figure differs
from that reported in the 2009-10 ABS Survey of Income and Housing (33.0%) as it
samples households receiving all gross income from income support. The
38
proportion of gross income from income support increases to 20% outside of
Hobart (see Appendix 3).
Although the Tasmanian median income for the Second and third decile households
is the same as the national average, it receives a greater proportion of income from
income support. This household is in the middle range across a number of
indicators, except poverty rate, where it is the lowest. ACT/NT has the lowest
house ownership levels, with a 12.5% difference between the ACT/NT and the
state with the highest level, Queensland.
Tasmania’s median income for the Second quintile household is higher than all other
jurisdictions. This reflects that Tasmania’s income is distributed across the lower to
middle income ranges26, which is substantiated by Tasmania having the lowest
income gini coefficient compared to other jurisdictions, therefore the least income
inequality (see Appendix 3, page 9).
For the second and fourth quintile households, Tasmania has the highest EMTR,
which when combined with a low income represents a barrier to increasing income.
Table 23: Financial capacity of Tasmanian income-source households
Government pensions and
allowances-Age/disability
TAS
NSW
VIC
QLD
SA
WA
pension
Median income ($’s)
418.0
411.0
419.0
423.0
414.0
423.0
Median income to Australian
average (%)
56.5
55.5
56.6
57.2
55.9
57.2
Proportion of gross income
from income support (%)
85.7
84.7
82.9
85.8
83.7
82.9
EMTR (%)
12.8
10.6
12.3
11.7
14.0
13.8
Poverty rate (%)
34.0
28.3
26.2
27.2
29.9
28.1
Labour participation rate (%)
11.6
9.4
10.5
7.5
9.7
8.1
House owner/purchaser to
State total (%)
22.3
19.2
20.1
19.8
23.1
17.3
Government pensions and allowances-Unemployment/ sickness/ education allowance
ACT/
NT
Aus
381.0
417.0
51.5
56.4
94.0
5.8
43.6
5.3
84.4
11.9
28.0
9.2
4.5
19.4
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
319.0
382.0
334.0
369.0
328.0
319.0
295.0
361.0
43.1
51.6
45.1
49.9
44.3
43.1
39.9
48.8
84.3
76.6
87.2
77.4
90.1
82.5
72.6
81.2
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
15.0
64.3
46.6
16.4
35.7
50.8
11.8
49.9
42.7
20.5
47.0
46.4
11.1
60.7
49.4
17.8
44.0
50.9
10.8
59.9
27.3
15.3
46.1
46.8
2.1
1.0
0.7
1.1
1.0
1.5
1.1
1.0
442.0
454.0
438.0
455.0
437.0
465.0
439.0
451.0
59.7
61.4
59.2
61.5
59.1
62.8
59.3
60.9
90.6
89.5
84.6
79.6
86.5
81.3
74.4
85.2
5.3
5.3
10.1
7.6
9.8
15.4
14.1
8.4
15.1
15.5
19.8
12.6
13.5
5.8
26.5
15.3
Government pensions and allowance - Other
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
26
Tasmania’s median income is close to equal to all jurisdictions at the third quintile, before dropping off for the fourth
and highest quintile, indicating a general spread of income in the lower centre income ranges (second and third quintiles).
39
Continued
TAS
NSW
VIC
QLD
SA
WA
ACT/
NT
Aus
Labour participation rate (%)
House owner/purchaser to
State total (%)
15.4
16.9
25.3
36.1
29.5
20.1
27.2
24.0
1.1
1.0
1.9
0.7
1.9
0.7
0.4
1.2
815.0
926.0
916.0
894.0
903.0
931.0
1021.0
916.0
110.1
125.1
123.8
120.8
122.0
125.8
138.0
123.8
1.53
0.97
1.86
0.96
0.33
0.87
0.44
1.13
32.6
35.6
32.4
33.6
33.3
33.9
34.4
33.9
1.5
1.0
1.9
1.0
0.3
0.9
0.4
1.1
79.8
77.4
78.6
82.2
79.7
80.4
83.8
79.3
53.5
57.3
57.9
57.5
52.8
59.1
70.3
57.5
Income source of household-Wage and salary
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
Income source of household-Own unincorporated business income
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
590.0
598.0
607.0
678.0
718.0
637.0
690.0
637.0
79.7
80.8
82.0
91.6
97.0
86.1
93.2
86.1
10.97
9.78
10.73
2.83
10.74
7.12
4.62
7.95
EMTR (%)
27.5
28.6
29.4
29.3
28.6
33.7
33.7
29.6
Poverty rate (%)
11.0
9.8
10.7
2.8
10.7
7.1
4.6
8.0
Labour participation rate (%)
House owner/purchaser to
State total (%)
88.5
76.4
84.9
80.4
79.6
79.1
82.7
80.2
10.5
8.0
6.9
8.8
8.6
10.4
4.7
8.2
For the Age/disability pension households, the ACT/NT is the most significant
jurisdiction across most indicators. Tasmania has similar income and income support
levels to the Australian average. It has the highest labour force participation rate and
the highest poverty rate – indicating higher comparative distribution of the
population in the household type. Tasmania has the second highest house
ownership level.
Tasmanian Unemployment/sickness/education allowance households have a lower
median income than Australia, equal second with South Australia. The income
source of the household is likely to be lowering the EMTR, indicating flexibility to
earn income with lower loss of benefits than other household types. The household
has the lowest income across all households and highest percentage under the
poverty rate across all jurisdictions. This in part reflects the lower payments of this
beneficiary type when compared to households receiving pensions.
Households receiving other government pensions and allowances includes payments
for parenting payment, maternity payment and Family Tax Benefit. Tasmania has the
highest proportion receiving income support and lowest labour participation rate,
correlating low levels of income and employment.
40
Table 24: Financial capacity of Tasmanian family composition households
TAS
NSW
VIC
QLD
SA
WA
ACT/
NT
454.0
478.0
492.0
558.0
484.0
518.0
812.0
506.0
61.4
64.6
66.5
75.4
65.4
70.0
109.7
68.4
28.1
22.9
20.9
17.2
25.5
17.5
7.6
20.5
EMTR (%)
26.1
20.1
20.9
22.3
20.3
21.7
24.2
21.2
Poverty rate (%)
29.3
30.1
25.3
25.3
29.4
25.7
18.1
27.1
Labour participation rate (%)
House owner/purchaser to
State total (%)
51.0
46.8
51.3
58.0
47.4
56.5
66.3
51.8
24.5
19.9
23.1
20.9
26.4
24.0
21.7
22.1
Lone person household
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
Aus
One parent, one family households with one dependent child only
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
464.0
498.0
496.0
523.0
574.0
533.0
512.0
514.0
62.7
67.3
67.0
70.7
77.6
72.0
69.2
69.5
41.3
35.2
39.2
33.4
28.9
54.1
19.0
36.7
21.9
17.7
18.1
18.8
20.6
14.8
25.6
18.2
7.2
11.8
23.1
11.0
12.5
4.5
30.3
13.3
53.9
46.5
43.1
55.9
60.8
28.8
66.1
47.3
0.8
1.2
1.5
1.3
1.9
1.2
1.9
1.4
One parent, one family households with two dependent child only
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
414.0
471.0
442.0
479.0
451.0
512.0
555.0
467.0
55.9
63.6
59.7
64.7
60.9
69.2
75.0
63.1
67.5
51.8
58.4
48.2
57.4
27.4
27.0
50.1
9.4
14.2
12.7
21.8
16.5
28.9
27.2
16.7
Poverty rate (%)
32.8
11.8
20.6
16.3
17.4
4.2
16.2
15.6
Labour participation rate (%)
House owner/purchaser to
State total (%)
33.1
35.4
37.3
44.8
44.5
41.8
48.5
38.9
0.8
1.2
1.5
1.3
1.9
1.2
1.9
1.4
EMTR (%)
Couple with three or more dependent children only
Median income ($’s)
Median income to Australian
average (%)
Proportion of gross income
from income support (%)
EMTR (%)
Poverty rate (%)
Labour participation rate (%)
House owner/purchaser to
State total (%)
598.0
776.0
689.0
745.0
798.0
757.0
738.0
740.0
80.8
104.9
93.1
100.7
107.8
102.3
99.7
100.0
12.5
5.5
7.3
6.7
6.6
6.5
4.7
6.4
41.7
41.8
43.5
43.1
42.8
44.7
44.2
42.9
4.7
4.2
0.1
3.7
3.2
0.7
1.7
3.8
60.8
58.6
63.2
64.3
61.3
64.2
70.9
61.8
9.2
11.7
11.4
8.4
9.7
10.4
13.0
10.6
Incomes for lone person households are low, and the proportion of income from
income support is high. The comparatively high house ownership level highlights that
41
this household is likely dominated by older people in retirement, who have paid off
their homes.
Although single parents with one dependent have low incomes the poverty rate is
low. This household is predominantly renting, as indicated by very low house
ownership levels across all jurisdictions.
One parent, one family households with two dependent child only households stand out
across all family composition households as the most at-risk to financial stress. The
household has low income and a high proportion of income from income support.
The parent of the household is likely to be juggling work opportunities with child
care responsibilities27, which is reflected in the low labour force participation rate.
Couple with three or more dependent children only households have higher incomes
than other family compositions, although Tasmania has the lowest median income
compared to other jurisdictions. Low incomes influence other indicators, such as the
poverty rate and proportion of income from income support.
Since the modelling, the ABS has released its latest 2009-10 Survey of Income and Housing
data. Table 25 shows that Tasmania has the second lowest level of household wealth28
compared to other states and territories and the wealth of the average Tasmanian
household is 81.5% of the Australian average29.
Table 25: Inter-jurisdictional comparison of household wealth
Mean
household
net worth
$
% of
Australian
average
Tas
NSW
Vic
Qld
SA
WA
NT
ACT
Australia
586,276
721,278
779,266
651,694
585,197
822,149
621,642
843,369
719,561
81.5
100.2
108.3
90.6
81.3
114.3
86.4
117.2
100.0
HOUSEHOLDS AT RISK
Table 26 allows a broad observation of the capacity of households to expend on essential
services30, and the level of available income on non-essential items.
All percentages greater than 100%, represent a higher expenditure than income.
Households have been sorted by the total expenditure on essential services, highest to
lowest, which is referred to in the column ‘essentials expenditure weights’. This column is
followed by expenditure in dollar terms (AWHE) at 2011, mean equivalised disposable
income, followed by the percent of income spent on essential services. Households that
have low expenditure and/or low income are highlighted as at-risk. Priority in determining
at-risk households was given primarily through expenditure levels, as although some
27
The proportion of working age parents in Tasmania with any dependent children is: age under 35 – 31.1% and age 3544 – 45.5%. Household Income and Income Distribution, Australia - Detailed tables, 2009-10. Cat 6523.0.
28
Net worth, often referred to as wealth, is the value of a household's assets less the value of its liabilities. Assets can take
many forms including, dwellings and their contents, vehicles, and machinery and equipment used in businesses owned by
households, computer software and artistic originals, business inventories of goods, land, bank deposits, shares,
superannuation account balances, and the outstanding value of loans made to other households or businesses.
29
Household Income and Income Distribution, Australia - Detailed tables, 2009-10, ABS (cat 6523.0 ).
30
It is also important to note that ABS data was used in the comparison and that it advises that comparing expenditure
and income data is problematic due to variations in the sampling and modelling of income across populations.
42
households, have lower incomes than expenditure, the expenditure is high, indicating high
financial capacity31.
Table 26: Expenditure on essential services as a percentage of income
Household Type
Income quintile of household-Second quintile
Contribution of GPAs to Income-1% to less than
20%
Contribution of GPAs to Income-90% and over
Income quintile of household-Lowest quintile
Couple with three or more dependent children
only
Contribution of GPAs to Income-50% to less than
90%
Income decile of household-Second and third
deciles
Contribution of GPAs to Income-20% to less than
50%
One parent, one family households with one
dependent child only
Lone person household
Government pensions and allowancesAge/disability pension
Government pensions and allowances-Other
Income quintile of household-Fourth quintile
One parent, one family households with two
dependent child only
Government pensions and allowancesUnemployment/ sickness/ education allowance
Tenure Type-Renter
Income source of household-Own unincorporated
business income
Tenure Type-Owner with a mortgage
Income source of household-Wage and salary
All households - Tasmania
Income source of household-Other income
Tenure Type-Total home owners
Couple with one dependent child only
Couple only
Income quintile of household-Third quintile
Tenure Type-Owner without a mortgage
All households - Australia
Income quintile of household-Highest quintile
Essentials
expenditure
weights
%
62.2
Essentials
AWHE March
2011
$
577.5
Mean
equivalised
disposable
income
2011
$
517
Expenditure
compared
to income
%
61.6
60.1
59.9
879.2
*
311.7
389.4
NA
NA
359
NA
NA
108.5
59.1
1,196.6
NA
NA
59.1
430.8
*
NA
NA
58.8
400.7
435
92.1
57.7
634.6
NA
NA
57.3
57.3
479.3
390.4
539
569
88.9
68.6
57.2
57.2
57.1
320.6
448.5
787.9
430
445
916
74.6
100.8
86.0
56.9
525.4
460
114.2
56.0
55.9
362.2
501.9
312
NA
116.1
NA
55.8
55.6
55.0
55.0
54.9
54.7
54.6
54.2
53.7
53.5
51.2
49.8
804.8
864.5
861.5
594.0
682.6
680.1
862.3
679.3
555.5
519.5
647.8
834.5
687
NA
851
698
766
NA
913
745
708
NA
825
1,322
117.1
NA
101.2
85.1
89.1
NA
94.5
91.2
78.5
NA
79
63.1
111.7
31
Results were excluded for those households with very high expenditure and comparatively low income. Highlighting
either a data inconsistency, or significant non-income financial resources. The only household of this type was Couple with
three or more dependent children only.
* These households receive most of their income from income support and are therefore likely to have low incomes.
They have been highlighted as at-risk, but are not analysed further due to insufficient data.
43
NA – Not applicable due to insufficient data.
Some households, such as Government pensions and allowances-Unemployment/sickness/
education allowance face higher expenditure than income, possibly causing household
financial stress. Households slightly above or below 100% are likely to be reducing
consumption of essential and non-essential services to manage budgets. It is important to
note that income is only one measure of financial capacity, as it does not include assets, and
that other support exists, such as concessions, emergency relief and other community
service support. These contribute to total resources available to households, although
dependency, particularly on emergency relief, could be a significant issue.
So far, micro-economic factors such as specific household expenditure patterns, price
changes across essential services and incomes have been analysed to build a picture of what
is occurring underneath macro-economic indicators such as the CPI.
It is clear that households spending more than the average face a greater cost pressure,
particularly when prices increase rapidly, and that this is a critical point of debate when
there are cost pressures for low income households across essential services.
It is worth returning to the CPI with the analysis, by comparing the CPI to household
expenditure across the complete basket of goods and services (all price groups), not just
essential services. This can be achieved by building separate price indexes for household
costs over time, which is the methodology used for the creation of the RPIs.
The annual change in the CPI is referred to as the rate of inflation, which shows the change
in price for purchasing a fixed basket of goods and services. The rate of inflation is a
reflection of the change in the value of money within Australia. For example, increases in
inflation reflect a decrease in the value of money, as more money is required to purchase
the same amount of goods and services. In general terms, the CPI shows changes in costs to
all households when purchasing the CPI basket of goods and services.
By comparison, the household based RPIs use the same basket of goods and services as the
CPI and the same price data for these goods and services. However, the RPI uses different
quantity levels for goods and services. Quantity data is taken for particular household types
and is not adjusted, as it is for the CPI, to keep the quantities of the basket constant over
the life of the index. This means the RPI incorporates current prices and reflects changes in
spending patterns (quantities) for different households as prices increase or decrease over
time. In general terms, the RPI shows costs and changes in costs for a specific household
when purchasing the CPI basket of goods and services (See Appendix 2 for more detail).
44
Figure 17 shows five income source/level households that have been identified through the
analysis so far as at-risk to cost pressures across the essential services.
Figure 17: Five income source/level households with the highest costs
All households are spending above the CPI levels for Tasmania and Australia, with some
households noticeably higher. For example, the following gives the difference in index points
between the households and the CPI for Australia:
Unemployment/sickness/education allowance: 2.2
Age/disability pension: 3.3
Second and third deciles: 6.9
Contribution of GPAs to Income-50% to less than 90%: 5.7
Contribution of GPAs to Income-90% and over: 6.2
The differences to the CPI are important as the Commonwealth adjusts most pensions and
allowances, and the carbon price compensation, to its rate of increase32. Therefore,
households earning within the second and third deciles and which are in receipt of a
pension or allowance may be receiving income below expenditure levels.
Table 18 shows households by family composition and tenure type. Most households have
been experiencing higher costs than those indicated by the CPI for Australia and Tasmania.
32
When pensions and allowances are checked against the CPI, if necessary, the single pension payment rate is increased
to make sure it does not fall below 27.7% of the Male Total Average Weekly Earnings figure. The partnered payment rate
is also increased as a proportion of the single rate.
45
Figure 18: Five family composition/tenure type households with the highest costs
The household One parent, one family households with one dependent child only is the only
household with total spending below both the Tasmanian and Australian CPI. The following
gives the difference in index points between the households and the CPI for Australia:
Lone person household: 3.0
One parent, one family households with one dependent child only: -1.5
One parent, one family households with two dependent child only: 1.9
Renter: 2.4
Both tables indicate the growing gap between households experiencing higher than average
costs when compared to the CPI, and when sharp increases and decreases have placed
squeezes and price shocks on household budgets. For example, the increase in six quarters
across all indexes from March 2007 to September 2008 was approximately 12 points. This
rate of increase was higher when compared to the increase for eight quarters, from
September 2008 to September 2010, which increased approximately eight points across all
indexes.
THE DISTRIBUTION OF AT-RISK HOUSEHOLDS
Understanding cost pressures on different households in Tasmania is important, so is
understanding the distribution of at-risk households within Tasmania. Understanding where
households are that face the greatest cost pressures is important for both its communities
and for policy makers. For example, some households that expend high on transport are
particularly exposed to fuel and passenger transport price movements, which in turn
contributes to ‘access costs’ for services such as education and health. Similarly, households
in areas of poor supply of fresh fruit and vegetables and that spend high on food, and low
46
on health services, may highlight where policy effort should focus, and which households are
in most need to support food security.
The distribution of households has been modelled through population projections33
conducted by NATSEM for the Cost of Living Strategy. Table 27 shows the Local
Government Areas (LGAs) that have the highest level of households that spend the most
on essential services. The LGAs were determined using the following method:
the proportion each household contributes to the LGA population was calculated;
the highest five households that constituted the greatest proportion of the LGA
population were counted (colour-shaded) for 2011 and 2016; and
the LGAs that had two or more of the five households for 2011 were included in
the table.
33
ABS population data was used to model Tasmania’s population by household type for 2006, 2011 and 2016. A number of benchmarks
were used for the population modelling, including the projections of the Tasmanian Demographic Change Advisory Council (DCAC).
47
Table 27: Local government areas with the highest proportion of at-risk households
Second and third
deciles
Break O'Day
Brighton
Burnie
Central Coast
Central
Highlands
Devonport
George Town
Glenorchy
Kentish
Launceston
Sorell
Tasman
Age/disability
pension
Unemployment/
sickness/ education
allowance
Other income
support
Lone person
household
One parent, one
family households
with one
dependent child
only
One parent, one
family households
with two
dependent child
only
No.
2011
2016
No.
2011
2016
No.
2011
2016
No.
2011
2016
No.
2011
2016
No.
2011
2016
No.
2011
2016
942
32.8
31.3
1006
35.0
38.7
273
9.5
8.5
99
3.4
2.3
892
31.0
34.6
78
2.7
0.8
106
3.7
5.6
1370
22.7
21.4
1241
20.6
21.6
480
8.0
6.3
321
5.3
6.5
1180
19.5
21.7
355
5.9
6.0
457
7.6
7.3
2160
26.4
25.6
2043
24.9
26.4
643
7.8
9.2
373
4.6
3.4
2238
27.3
29.2
276
3.4
3.0
430
5.2
5.0
2484
28.5
29.9
2498
28.7
32.0
620
7.1
7.7
246
2.8
1.3
2238
25.7
28.7
205
2.4
2.1
327
3.8
3.2
273
28.8
27.5
278
29.3
31.9
59
6.2
5.9
15
1.6
1.3
278
29.3
34.2
40
4.2
2.1
21
2.2
2.8
3032
29.0
28.4
2953
28.3
29.8
785
7.5
8.8
411
3.9
2.7
3018
28.9
31.6
292
2.8
2.3
507
4.9
4.6
762
28.2
28.1
708
26.2
29.9
270
10.0
11.3
132
4.9
3.2
699
25.9
28.9
88
3.3
2.8
127
4.7
5.2
4725
24.4
22.1
4826
24.9
26.3
919
4.7
4.2
555
2.9
3.2
6603
34.1
35.6
890
4.6
4.3
741
3.8
3.7
634
26.4
26.3
575
23.9
27.4
199
8.3
9.5
83
3.5
2.0
508
21.1
24.7
89
3.7
3.2
91
3.8
3.3
7249
25.7
24.7
6991
24.8
26.0
1939
6.9
8.1
977
3.5
2.7
8941
31.7
33.9
855
3.0
2.4
1429
5.1
4.9
1135
20.2
20.6
1028
18.3
20.7
342
6.1
5.5
212
3.8
4.2
1481
26.4
28.4
250
4.5
3.5
242
4.3
4.1
277
27.5
34.5
307
30.5
37.4
87
8.6
9.9
28
2.8
1.7
282
28.0
34.5
37
3.7
4.4
15
1.5
1.2
No. – Number of households
2011 / 2016 – Percent of households as a proportion of total households for the LGA at 2011and 2016.
48
The modelling shows the proportion of at-risk households within the local government
areas. Table 28 shows the count (the colour shaded households) of the LGA’s that have
high proportions of at-risk households for 2011 and 2016.
Table 28: LGAs count of at-risk households for 2011 and 2016
LGA
2011 2016 LGA
2011
Break O'Day
4
4 George Town
4
Brighton
4
3 Glenorchy
2
Burnie
2
3 Kentish
2
Central Coast
2
2 Launceston
2
Central Highlands
3
1 Sorell
2
Devonport
3
2 Tasman
2
2016
3
2
1
1
2
5
The modelling indicates some LGAs will undergo demographic change between 2011 and
2016. The greatest change will be in Tasman, which has two high expenditure households in
2011 (Government pensions and allowances-Age/disability pension and Government pensions
and allowances-Unemployment/sickness/education allowance), is estimated to have five in
2016 (Second and third deciles, One parent, one family households with one dependent child
only, Lone person households, Government pensions and allowances-Age/disability pension and
Government pensions and allowances-Unemployment/sickness/education allowance).
Policy makers could examine data on household differences when considering regulated
prices, service delivery and concessions, to represent the interests of households close to,
or in crisis. The data used in this analysis could be used as a baseline to develop further
analysis.
Conclusion
The aim of examining cost of living pressures in Tasmania was conducted by assessing the
application of existing measures, including the Relative price Index, Consumer Price Index
and the Analytical Living Cost Indexes. This included discussion of what constitutes
household costs and a summary of prices and expenditure by households across the
essential services of food, housing, health, transportation and education.
Some of the households with the highest cumulative cost pressures across essential services
are:
Contribution of GPAs to Income-90% and over
Contribution of GPAs to Income-50% to less than 90%
Income decile of household-Second and third deciles
One parent, one family households with one dependent child only
Lone person household
Government pensions and allowances-Age/disability pension
One parent, one family households with two dependent child only
49
Government pensions and allowances-Unemployment/ sickness/ education
allowance
This report explains why the use of the CPI as a cost of living indicator and for indexation
of pricing policy and pensions and allowances is deficient. It shows that household costs
often extend well above the CPI for essential services, and for some households, costs
across all price groups are also above the CPI.
The report provided detail on the financial resources available to at-risk households and
shows their distribution by local government area using income and population modelling
undertaken by NATSEM.
The information compiled for this report has application beyond cost of living analysis and
provides new data capability to assist policy makers across a range of policy settings. The
work enables understanding of how price movements in essential services are likely to
impact and vary by State and Territory, and by population group and place in Tasmania to
inform targeted government interventions.
50
Bibliography
@home Property Management Solutions: Rental Market Update 2011. See
http://www.athomepm.com.au/content/rental-market-update-2011
ABC News: “Aussie houses are world's most overpriced”, 04/03/11
ABC News: “Housing shortage to drive up rent in 2011”, 28/01/11
Adams, D. 2009, A Social Inclusion Strategy for Tasmania, Appendix 1: The Evidence for Social
Inclusion in Tasmania
Anglicare Australia 2010, In from the Edge: State of the Family Report, Oct 2010
Anglicare Tasmania and Tasmanian Council of Social Service (TasCOSS) 2010, Snapshot
#78 October 2010 - Stories of hardship in our state. See http://www.anglicaretas.org.au/index.php?option=com_content&task=view&id=750&Itemid=58, viewed
22/02/11
ANZ Housing Snapshot, 24 January 2011
Aurora Energy 2010, Aurora Annual Report 2009-10
Aurora Energy 2010, “Power Pricing Clarification”, media release, Aurora Energy, Hobart,
23 June 2010,
Aurora Energy 2009, “Rates reduced for Aurora PAYG concession customers”, media
release, Aurora Energy, Hobart, 26 July 2009
Australian Government. Clean Energy Future website accessed 6 September 2011
<http://www.cleanenergyfuture.gov.au/clean-energy-future/securing-a-clean-energyfuture/#content05>.
Australian Bureau of Statistics 2006, A Guide to the Consumer Price Index, 15th Series, 2005
(cat. no. 6440.0)
Australian Bureau of Statistics 2010, Age Matters, Dec 2010 (cat no 4914.0.55.001)
Australian Bureau of Statistics 2011, Analytical Living Cost Indexes for Selected Australian
Household Types, Mar 2011 (cat. no. 6463.0)
Australian Bureau of Statistics 2011, Australian Demographic Statistics, Dec 2010
(cat. no. 3101.0)
Australian Bureau of Statistics 2002, Australian Social Trends, 2002: Housing Arrangements:
Renter households (cat. no. 4102.0)
Australian Bureau of Statistics 2007, Australian Social Trends, 2007: Overweight and Obesity
(cat. no. 4102.0)
Australian Bureau of Statistics 2007, Australian Social Trends, 2007: Trends in Household
Consumption (cat. no. 4102.0)
Australian Bureau of Statistics 2009, Australian Social Trends, Dec 2009: Smoking, risky drinking
and obesity (cat. no. 4102.0)
Australian Bureau of Statistics 2010, Australian Social Trends, Mar 2010: 'Health and socioeconomic disadvantage' (cat. no. 4102.0)
Australian Bureau of Statistics 2010, Australian Social Trends, Jun 2010 (cat. no. 4102.0)
51
Australian Bureau of Statistics 2011, Australian Social Trends, Mar 2011: Life Expectancy
Trends- Australia (cat. no. 4102.0)
Australian Bureau of Statistics 2011, Australian Social Trends, Mar 2011: Year 12 Attainment
(cat. no. 4102.0)
Australian Bureau of Statistics 2006, Australian Standard Geographical Classification
(cat. no. 1216.0)
Australian Bureau of Statistics 2007, Average Retail Prices of Selected Items, Eight Capital
Cities, Sep 2007 (cat. no. 6403.0.55.001)
Australian Bureau of Statistics 2010, Average Weekly Earnings, Australia, (cat. no. 6302.0)
Australian Bureau of Statistics 2007, Census of Population and Housing, 2006
Australian Bureau of Statistics 2009, Children's Participation in Cultural and Leisure Activities,
Australia, Apr 2009 (cat. no. 4901.0)
Australian Bureau of Statistics 2011, Consumer Price Index, Australia, Mar 2011
(cat. no. 6401.0)
Australian Bureau of Statistics 2011, Disability, Ageing and Carers, Australia: Summary of
Findings, 2009: Second Staggered Release (cat. no. 4430.0)
Australian Bureau of Statistics 2007, General Social Survey, Australia, 2006 (cat. no. 4159.0)
Australian Bureau of Statistics 2010, Health Services: Patient Experiences in Australia, 2009
(cat. no. 4839.0.55.001)
Australian Bureau of Statistics 2011, House Price Indexes: Eight Capital Cities, Mar 2011
(cat. no. 6416.0)
Australian Bureau of Statistics 2008, Household Expenditure on Health: A Snapshot, 2004-05
(cat. no. 4836.0.55.001)
Australian Bureau of Statistics 2000, Household Expenditure Survey, Australia: Summary of
Results, 1998-99, 2003-04 cat no 6530.0
Australian Bureau of Statistics 2009, Household Income and Income Distribution, Australia
2007-08 (cat. no. 6523.0)
Australian Bureau of Statistics 2007, Household Wealth and Wealth Distribution, Australia,
2005-06; Summary of Findings (cat. no. 6554.0)
Australian Bureau of Statistics 1999, Housing Occupancy and Costs, Australia, 1997-98, 200708: (cat. no. 4130.0)
Australian Bureau of Statistics 2011, Labour Force, Australia, Apr 2011 (cat. no. 6202.0)
Australian Bureau of Statistics 2010, Labour Force, Australia, Detailed – Electronic Delivery, Feb
2010 (cat. no. 6291.0.55.001)
Australian Bureau of Statistics 2010, Measures of Australia’s Progress, Sep 2010
Australian Bureau of Statistics 2011, Motor Vehicle Census, Australia, 31 March 2010
(cat. no. 9309.0)
Australian Bureau of Statistics 2009, National Aboriginal and Torres Strait Islander Social Survey,
2008 (cat. no. 4714.0)
Australian Bureau of Statistics 2009, National Health Survey, 2007-08 (Reissue) (cat. no.
4364.0)
52
Australian Bureau of Statistics 2008, National Survey of Mental Health and Wellbeing:
Summary of Results, 2007 (cat. no. 4326.0)
Australian Bureau of Statistics 2011, Pensioner and Beneficiary Living Cost Index, Dec 2010
(cat. no. 6467.0)
Australian Bureau of Statistics 2010, Population by Age and Sex, Regions of Australia, 2009
(cat. no. 3235.0)
Australian Bureau of Statistics 2008, Population Projections, Australia, 2006 to 2101
(cat. no. 3222.0)
Australian Bureau of Statistics 2011, Recorded Crime - Offenders, 2009-10 (cat. no. 4519.0)
Australian Bureau of Statistics 2011, Regional Population Growth, Australia, 2009-10 (cat. no.
3218.0)
Australian Bureau of Statistics 2009, Retirement and Retirement Intentions, Australia, Jul 2008
to Jun 2009 (cat. no. 6238.0)
Australian Bureau of Statistics 2011, Schools, Australia, 2010 (cat. no. 4221.0)
Australian Bureau of Statistics 2010, Schools, Australia, Preliminary, 2009 (cat. no. 4220.0)
Australian Bureau of Statistics 2008, Tasmanian State and Regional Indicators, Jun 2008,
Feature Article: Adult Literacy in Tasmania, 2006, Dec 2009, Feature Article: Population Health
Progress Measures: Body Mass, (cat. no. 1307.6)
Australian Bureau of Statistics 2010, Tasmanian State and Regional Indicators, Sep 2010:
Transport, Dec 2010: Labour (cat. no. 1307.6)
Australian Bureau of Statistics 2010, Tasmanian Statistical News, Mar 2010; Feature Article:
How connected are we? (cat. no. 1301.6.55.001)
Australian Bureau of Statistics 2006, Tobacco Smoking in Australia: A Snapshot, 2004-05
(cat. no. 4831.0.55.001)
Australian Bureau of Statistics 2011, Underemployed Workers, Australia, Sep 2010 (cat. no.
6265.0)
Australian Council of Social Service (ACOSS) 2010: Emergency Relief Handbook, 4th
Edition
Australian Institute of Health and Welfare (AIHW) 2010, Children’s Headline Indicators,
Birthweight Headline Indicator: Live born infants with a birthweight of less than 2 500 grams
(per cent). See http://www.aihw.gov.au/chi/index.cfm
Australian Taxation Office, unpublished data
Babbington, S. and Donato-Hunt, C. 2007, When there isn’t enough to eat: the food insecurity
of Anglicare’s Sydney emergency relief clients in Wollongong. Full report of the pilot study,
Anglicare Diocese of Sydney, Parramatta, New South Wales
Baum, S. and Wulff, M. 2001, Housing aspirations of Australian households: Positioning paper,
Australian Housing and Urban Research Institute
Cancer Council of Australia. See
http://www.cancer.org.au/cancersmartlifestyle/nutritionphysicalactivity/cancercouncilsrecomm
endations.htm
Centrelink News: Concession Cards. See
http://www.yourlifechoices.com.au/index.php/articles/category/centrelink_news
53
Centrelink: Health Care Cards. See
http://www.centrelink.gov.au/internet/internet.nsf/payments/conc_cards_hcc.htm
Chamberlain, C. and MacKenzie, D. 2009, Counting the Homeless, 2006: Tasmania, Australian
Institute of Health and Welfare
Commonwealth Bank media release 26 May 2011: ‘Housing Affordability Enjoys Temporary
Respite’. See
http://economics.hia.com.au/media/HIA%20National%20Release%20March%20Qtr%202011
.pdf
Commonwealth Bank, Housing Affordability Index: Affordability Report, Sep quarter 2010.
See http://economics.hia.com.au/media/2010-09%20Affordability%20Report.pdf
Commonwealth Department of Families, Housing, Community Services and indigenous
Affairs (FaHCSIA) 2010, unpublished data
Corpus Christi Catholic School. See
http://www.corpuschristi.tas.edu.au/documents/2011FeesandLevies_000.pdf
Courier Mail article: ‘Struggling families becoming bargain-hunters as cost of living skyrockets
in Queensland’, 02/12/10
Cox, W. And Pavletich, H. 2011, 7th Annual Demographia International Housing Affordability
Survey: 2011 Ratings for Metropolitan Markets. See http://www.demographia.com/dhi.pdf
Currie, G. and Senbergs, Z., ‘Exploring Forced car ownership in metropolitan Melbourne’,
30th Australasian Transport Research Forum, 25-27 Sep 2007
Department of Education (DoE); ‘Costs and financial assistance’. See
http://www.education.tas.gov.au/school/parents/costs
Department of Education (DoE); ‘Helping with the cost of school levies’. See
http://www.education.tas.gov.au/school/publications/engage/issue5/levies
Department of Health and Human Services (DHHS), 2010, DHHS Annual Report 2009-10
Department of Health and Human Services (DHHS), Health and Wellbeing Directory,
Community Housing. See
http://www.dhhs.tas.gov.au/service_information/related_context_pages/community_housing
Department of Health and Human Services (DHHS): Housing Tasmania. See:
http://www.dhhs.tas.gov.au/housing
Department of Health and Human Services (DHHS) 2009, Kids Come First Report 2009:
Outcomes for children and young people in Tasmania
Department of Health and Human Services (DHHS) 2011, Ministerial Council Presentation:
“Electronic gaming, Health and Communities in Tasmania”
Department of Health and Human Services (DHHS) 2008, State of Public Health Report
2008
Department of Health and Human Services (DHHS) 2009, 2009 Tasmanian Population
Health Survey, Selected findings, Menzies Research Institute
Department of Health and Human Services (DHHS) 2009, Tasmanian Child Health and
Wellbeing Survey: Report of Survey Findings, The Social Research Centre, North Melbourne,
2009
54
Department of Health and Human Services (DHHS), Your Health and Human Services:
Progress Chart August 2010,
Department of Infrastructure, Energy and Resources (DIER). See www.dier.tas.gov.au
Department of Infrastructure, Energy and Resources (DIER), Annual Report 2009/10
Department of Infrastructure, Energy and Resources (DIER) 2007, Connected Communities:
Better Bus Services in Tasmania, Report of the Core Passenger Services Review, Volume 1 Main
report, November 2007
Department of Justice (DoJ), Consumer Affairs and Fair Trading: Rental Bond. See
http://www.consumer.tas.gov.au/renting/owner/rental_bond,
Department of Premier and Cabinet (DPAC), Social Inclusion Unit, Review of Housing
Tasmania’s Rent Setting, December 2008
Department of Treasury and Finance (DoTAF), Industry Data. See
http://www.tenders.tas.gov.au/domino/dtf/dtf.nsf/v-liq-andgaming/C1E6645F375BFAEBCA257346001122A1
Department of Treasury and Finance (DoTAF) 2010, State Tax Review Discussion Paper, Dec
2010
Department of Treasury and Finance (DoTAF), State Revenue Office; Fact Sheet: Changes
to concessions and rebates announced in the 2011-12 Budget. See
http://www.sro.tas.gov.au/
Draft Tasmanian Food Security Strategy
EMRS: Tasmania in Focus, Dec 2010. See http://www.emrs.com.au/
Engels B, Nissim R and Landvogt K, 2009, Under Pressure: Costs of living, financial hardship and
emergency relief in Victoria
Fair Work Australia website. See http://www.fwa.gov.au
Flanagan, J. 2007, Dropped from the Moon: The settlement experience of refugee communities
in Tasmania, Anglicare Tasmania Social Action Research Centre, Sep 2007
Flanagan, K. 2010, Hard Times: Tasmanians in Financial Crisis, Anglicare Tasmania
Fujitsu Mortgage Stress Report, March 2010
Genworth Financial, Streets Ahead: 2009-10 Confidence Flattens. See
http://www.genworth.com.au/streetsahead/astoryofchangingconditions/2009-10-confidenceflattens.htm
Genworth Financial, Streets Ahead: Genworth Homebuyer Confidence Index, March 2011,
Second Edition
Insurance Council of Australia, The non-insured: who, why and trends, Prepared by Dr
Richard Tooth and Dr George Barker, Centre of Law and Economics, Australian National
University, May 2007
Insurance Council of Australia, Submission to the Tasmanian State Taxation Review, Feb 2011
Legislative Council Select Committee Report on Housing Affordability in Tasmania,
Parliament of Tasmania, 15 April 2008
55
Melbourne Institute of Applied Economic and Social Research, University of Melbourne
2010, Families, Incomes and Jobs Volume 5, ‘A Statistical Report on Waves 1 to 7 of the
Household, Income and Labour Dynamics of Australia Survey (HILDA)’.
Metro Tasmania, 2009-10 Annual Report
NRMA Insurance (2001), Home and Motor Vehicle Insurance: A Survey of Australian
Households (October 2001), Research commissioned by NRMA Insurance in relation to
household non-insurance. See
http://www.iag.com.au/pub/iag/results/submissions/media/20010611a.pdf
NSW Population Health Survey 2005-2006 Report on child health
Office of the Tasmanian Economic Regulator (OTTER), October 2010, Annual Report 200910
Office of the Tasmanian Economic Regulator (OTTER), December 2010, 2011 Aurora Pay
As You Go Price Comparison Report
Office of the Tasmanian Economic Regulator (OTTER), January 2011: Comparison of 2011
Australian Standing Offer Energy Prices
Office of the Tasmanian Economic Regulator (OTTER), October 2011, Investigation of
maximum prices for declared retail electrical services on mainland Tasmania: Final Report
Office of the Tasmanian Economic Regulator (OTTER), January 2011, Tasmanian Energy
Supply Industry Performance Report 2009-10
Office of the Tasmanian Economic Regulator (OTTER), August 2010, Electricity Price
Investigation Draft Report. See www.economicregulator.tas.gov.au
Office of the Tasmanian Economic Regulator (OTTER), OTTER News, December 2010
Payne, A. 2009, Working poor in Australia: An analysis of poverty among households in
which a member is employed, March 2009, NATSEM, University of Canberra
Real Estate Institute of Tasmania (REIT), Frequently Asked Questions: renting. See
http://www.reit.com.au/faqrenting
Real Estate Institute of Tasmania (REIT), September Quarter Property Report, 1 November
2010
Residex, March 2011, My Property Hunter: Property Info – Tasmania Property. See
http://www.mypropertyhunter.com.au/news_property.html
Rpdata.com Rental Review, March quarter 2011. See
http://www.rpdata.net.au/news/pdfs/quarterly_rental_review_mar_11.pdf
Rental growth returning: RP Data. See http://www.financebroker.com.au/aussie-mortgage-mastersclarkson/article/rental-growth-returning-rp-data/
Ross, S. and Rintoul, D. 2006, ‘Pre-payment meter use in Tasmania: consumer view and issues’:
a research report carried out for the Tasmanian Council of Social Service by Urbis Keys Young,
TasCOSS, Hobart
56
Saunders, P, Hill, T, and Bradbury, B. 2008, Poverty in Australia: Sensitivity Analysis and Recent
Trends, report commissioned by Jobs Australia on behalf of the Australian Council of Social
Service (ACOSS), SPRC Report 4/08, Social Policy Research Centre, March 2008
Saunders, P, Naidoo, Y, and Griffiths, M, Towards New Indicators of Disadvantage: Deprivation
and Social Exclusion in Australia, Social Policy Research Centre, November 2007.
Scutella, R, Wilkins, R. and Kostenko, W, Melbourne Institute Working Paper Series Working
Paper No. 26/09; Estimates of Poverty and Social Exclusion in Australia: A Multidimensional
Approach, Dec 2009, Melbourne Institute of Applied Economic and Social Research, The
University of Melbourne and Brotherhood of St Laurence
SGS Economics and Planning, 2008 Social Impacts of Climate Change in the ACT - Final
Report, prepared for the ACT Chief Minister’s Department, May 2008
Southern Water, Open Letter to the people of Southern Tasmania (The Mercury,
15/01/11)
St Virgil’s College. See http://www.stvirgils.tas.edu.au/about/fees/
State Tax Review Discussion Paper, Dec 2010
Sunday Tasmanian 9 January 2011, Media article: ‘Flood hits prices for fruit, veg’
Tasmania Together, Progress Report 2010
Tasmanian Council of Social Service (TasCOSS) 2007, An unfair state? Poverty, disadvantage
and exclusion in Tasmania, TasCOSS, Hobart
Tasmanian Council of Social Services (TasCOSS) 2008, Enhancing Quality of Life: Addressing
Poverty and Disadvantage through the HACC Program, HACC Consumer Consultation Report
Tasmanian Council of Social Services (TasCOSS) 2009, Just scraping by? Conversations with
Tasmanians living on low incomes, Social Policy and Research Team
Tasmanian Council of Social Service (TasCOSS) 2010, The Intersection of Emergency Food
Relief & Food Security, November 2010
TasCOSS submission (May 2010) to Draft Report: Investigation of Maximum Prices for
Retail Tariffs on Mainland Tasmania 2009-2010 - Office of the Tasmanian Energy Regulator:
2010 Electricity Retail Price Investigation Draft Report
The Friends School. See http://www.isbi.com/viewschool.asp?school=4022Friends_School,_Hobart
The South Australian Centre for Economic Studies Final Report: June 2008; Social and
Economic Impact Study into Gambling in Tasmania: Volume 1
The South Australian Centre for Economic Studies Final Report: June 2008; Social and
Economic Impact Study into Gambling in Tasmania: Volume 2 – The Prevalence Study
The State of Australian Cities 2010 Report
Vidyattama, Y, Taylor, M, and Tanton, R., 2011, Cost of Living Indicators for Tasmania: Final
Report, 2011, The National Centre for Social and Economic Modelling (NATSEM),
University of Canberra
Yates, J and Milligan, V, 2007 Housing affordability: a 21st century problem, report for the
Australian Housing and Urban Research Institute (AHURI), September 2007
57
Attachment 1 – RPI Households
The table below shows the correlation between the households used in the Strategy and
those referred to in this report and defines each household.
Households referred to in the Strategy
Strategy
document
RPI household
Definition
Expenditure aggregated to represent all expenditure
across all households. All-households represents the
average expenditure for the specified region. This
household includes all income ranges. It is important to
note that this group represents the average expenditure
of all households, not the expenditure of the average
household. The former is defined by the average
Average
All households
expenditure pattern, the latter could be defined by
(Tasmanian
(Tasmania or
dominant household characteristics, such as the average
or Australian) Australia)
family composition or average income source/type.
Contribution of
Households receiving Commonwealth Government
GPAs to Income- income support payments through pensions and
1% to less than
allowances totalling between 1% of household income
Not included 20%
to less than 20% of household income.
Contribution of
Households receiving Commonwealth Government
GPAs to Income- income support payments through pensions and
20% to less than
allowances totalling between 20% of household income
Not included 50%
to less than 50% of household income.
Contribution of
Households receiving Commonwealth Government
Workers with GPAs to Income- income support payments through pensions and
income
50% to less than
allowances totalling between 50% of household income
support
90%
to less than 90% of household income.
Households receiving Commonwealth Government
Contribution of
income support payments through pensions and
GPAs to Income- allowances totalling between 90% of household income
Not included 90% and over
to 100% of household income.
The division of the total household expenditure into five
categories based on income ranges. The lowest or first
income quintile includes those with the lowest and
negative incomes. It does not necessarily represent all
Income quintile of low income households, as some high expenditure
household-Lowest patterns within this quintile indicate high financial
Not included quintile
resources.
The division of the total household expenditure into five
categories based on income ranges. If the middle quintile
is considered the median income quintile, ie it has an
Income quintile of even number of income categories above and below it,
household-Second then the second quintile represents expenditure from
Not included quintile
households below the median quintile.
58
Not included
Middle to
high incomes
High incomes
Low incomes
Pensioners
Unemployed
Not included
The division of the total household expenditure into five
categories based on income ranges. The third quintile
Income quintile of represents expenditure from households at the centre
household-Third
of the income distribution, or the median income
quintile
quintile.
The division of the total household expenditure into five
categories based on income ranges. The fourth quintile
Income quintile of represents expenditure from households one quintile
household-Fourth higher than the median income quintile – the third
quintile
quintile.
The division of the total household expenditure into five
Income quintile of categories based on income ranges. The fifth quintile
household-Highest represents expenditure from households at the top fifth
quintile
or the highest income range.
Households within the income ranges of the second and
third deciles for equivalised disposable income. The
second and third deciles are a combined income range
from ten income ranges (deciles) of the region. The ABS
recommends reference to the second and third deciles
for low income earners as the lowest household
incomes in the first decile often have business incomes
at negative or close to zero levels. Although incomes for
these households are very low, high expenditure levels
for some households indicate that the first decile does
Income decile of
not accurately reflect the actual financial resources
household-Second
available.
and third deciles
Government
pensions and
Households in receipt of the Commonwealth
allowancesGovernment Age Pension and Disability Support
Age/disability
Pension. Income is limited by the eligibility requirements
pension
of the specific pensions and allowances.
Government
pensions and
allowancesUnemployment/
Households in receipt of the Commonwealth
sickness/
Government unemployment, sickness and education
education
allowances. This income is limited by the eligibility
allowance
requirements of the specific pensions and allowances.
Households that receive family income support –
Government
parenting payment, maternity payment and Family Tax
pensions and
Benefit. This income is limited by the eligibility
allowances-Other requirements of the specific pensions and allowances.
59
Income source of
household-Own
Business
unincorporated
owners
business income
Income source of
household-Wage
Wage earners and salary
Income source of
household-Other
Not included income
Lone person
Lone person
household
One parent, one
family households
with one
Single parents dependent child
- small family only
One parent, one
family households
Single parents with two
- medium
dependent child
family
only
Not included
Couples small family
Couples large family
Not included
Not included
Renters
Couple only
Couple with one
dependent child
only
Couple with three
or more
dependent
children only
Tenure TypeOwner without a
mortgage
Tenure TypeOwner with a
mortgage
Tenure TypeRenter
Households earning income from the business activities
of own, unincorporated businesses. This household
includes all income ranges.
Households receiving income from wages and salaries.
This household includes all income ranges.
Households receiving income from superannuation or
other private income. This household includes all income
ranges.
Single family households where the principle person is
single. This household includes all income ranges.
Single family households where the principle person is
single and has one dependent child. This household
includes all income ranges.
Single family households where the principle person is
single and has two dependent children. This household
includes all income ranges.
Single family households where the principle person is
part of a couple relationship. This household includes all
income ranges.
Single family households where the principle person is
part of a couple relationship, with one dependent child.
This household includes all income ranges.
Single family households where the principle person is
part of a couple, with three or more dependent children.
This household includes all income ranges.
Households that own their residence as a tenure type.
This household includes all income ranges.
Households that are purchasing their residence as a
tenure type. This household includes all income ranges.
Households that are renting as a tenure type. This
household includes all income ranges.
60
Appendices
1. Analysis of ABS cost of living data, 2011
2. Dufty and MacMillan, 2011, The Relative Price Index, The CPI and
the implications of changing cost pressures on various household
groups
3. NATSEM, 2011 Cost of living indicators for Tasmania
4. NATSEM, 2011 Estimating the Spatial Distribution and
Characteristics of Households in Tasmania
61