Rises in council rates and utility bills contribute to inflation

By Julian Bajkowski

Price rises in bills to consumers from council rates and state energy suppliers have helped nudge-up Australia's official inflation rate, the quarterly figures released by the Australian Bureau of Statistics this week have revealed.

The stronger than anticipated rise in the ABS’ Consumer Price Index of 1.2 per cent in the September quarter 2013, compared with a rise of 0.4 per cent in the June quarter 2013, has been partly attributed to hikes in property rates and charges, electricity and water and sewerage.

According to the ABS numbers prices for water and sewerage led the charge, jumping by 9.9 per cent.

Property rates and charges followed close behind with an increase of 7.9 per cent, while electricity prices rose 4.4 per cent.

“Electricity and water and sewerage prices increased in the September quarter 2013 because of a range of factors which varied from state to state,” the ABS said in its official commentary.

“Property rates and charges increased 7.9 per cent as a result of the annual review of rates charged by local councils.”

The hike in rates prices follows repeated warning from local government groups across Australia that the sector cannot continue to absorb cost shifting from higher jurisdictions without financial impacts.

In New South Wales, financial pressure on local governments has been exacerbated by a system of so-called ‘rates pegging’ where the state government regulates the size of increases for charges.

Some utilities, many of which remain in state ownership, have also been feeling the pinch as consumers seek to cut down on services consumption by using everything from solar panels to water saving devices.

There were also price rises outside of the government sector. According to the ABS automotive fuel prices rose by 7.6 per cent in the September quarter.

However in good news for consumers, the Bureau estimated that “the most significant offsetting price fall was for vegetables.” They fell 4.5 per cent.

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