Senator warns of hidden penalties for Northern Australia
Friday January 24th 2014
North Queensland is experiencing unique cost pressures which are not recognised by the national inflation figures, Townsville based Senator Ian Macdonald warned today.
“Unfortunately there are no official CPI figures for any city in North Queensland, not even Townsville, which is the largest city in Northern Australia. This lack of information allows the rest of Australia to ignore significant impediments like costs of insurance, freight and energy costs which are higher in the North than elsewhere,” Senator Macdonald said.
“We recognise that transport costs and the carbon tax significantly impact on the cost of living in the North but the problem is that these extra costs are not recognised in the national figures which are only assessed in the major cities.”
Australia’s inflation in the capital cities rose 2.7% in the year to the December quarter 2013. The trimmed mean CPI was 2.6% for the year, within the RBA comfort zone.
Regional Economist Colin Dwyer said, in a report released this week, that Northern households felt the significant price rises for home insurance and energy costs. But, he said, the major summary of national inflation data doesn't comment on energy prices as an increasing cost to consumers. Nationally insurance costs have only increased marginally quite unlike what has happened in North Queensland where skyrocketing insurance costs are causing great hardship.
Senator Macdonald said that the CPI figures showed a drop in the price of fuel for city dwellers.
“Like the cost of insurance, the figures used in calculating the CPI completely ignore the inflated cost of fuel for North Queensland,” he said.
Senator Macdonald warned the Reserve Bank to take this anomaly into account when assessing the impact of the official CPI figures and formulating its reaction to them.
“I call on the Australian Bureau of Statistics to extend its reach when calculating the CPI so that the economic decisions can be made on results which more accurately reflect the reality faced each day be those who live in the North.”