Decision made on CPI recommendations

Decision made on CPI recommendations

25 August 2014

Two new initiatives for the consumers price index (CPI) will occur as part of decisions published by Statistics New Zealand. These initiatives will help to ensure we continue to meet customer needs.

Decision on 2013 CPI Advisory Committee recommendations provides details.

We will produce a suite of eight household living-costs price indexes (HLPIs) for four household groups by early 2016:
• beneficiaries
• income groups (quintiles)
• Māori
• superannuitants.

The HLPIs will provide greater insight into the inflation these groups of households experience.

We will also produce seasonally adjusted analytical CPI series by the June 2015 quarter, to give better understanding of underlying inflation trends without the influence of seasonal price change.

The decisions are in response to recommendations made by an independent CPI Advisory Committee, chaired by Diana Crossan.

As recommended by the committee, these initiatives will be funded by reducing the number of regional centres that CPI prices are collected from – down from 15 to 12. We stopped collecting prices in Rotorua, Wanganui, and Timaru, on 1 July 2014. Price change for these regions will be directly represented by Tauranga, Palmerston North, and Christchurch, respectively.

“The CPI Advisory Committee recognised that a trade-off could be made that would allow these CPI-related initiatives, without compromising the quality of the national CPI or the range of regional CPIs,” Government Statistician Liz MacPherson said.
Some of the cost savings will also go towards making greater use of ‘big data’ (eg retail transaction or ‘scanner’ data) to measure price change in the CPI.

“We talked to our customers about the committee’s recommendations and formed a set of initiatives that best meet our customers’ needs. These new analytical series will allow our customers to obtain more value from information we largely already collect,” Ms MacPherson said.

The 2013 CPI Advisory Committee was an independent committee that met in May 2013. It made 16 recommendations that endorse the methods and practices used to compile the CPI and recommended ways the CPI can be further enhanced.

“The committee played an important role in shaping the future direction of the CPI,” Ms MacPherson said. “It is essential that Statistics NZ engages with customers and stakeholders to ensure the statistics we produce continue to meet their needs. I would like to thank the committee members for their recommendations, and the expertise and different perspectives they brought to the process.”

Of the committee’s 16 recommendations, nine confirm current practice and we are implementing a further five.

For more information about these statistics:

• Visit Decision on 2013 CPI Advisory Committee recommendations
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