Prices and Wages
The prices and wages section compares the difference between the rate of inflation and the average household income, and how this affects the cost of living in the Northern Territory (NT). Analysis is provided on Darwin's consumer price index (CPI), the NT’s wage price index (WPI) and average weekly earnings (AWE). CPI reports on the changes in price of categories such as housing, food and non-alcoholic beverages, recreation and culture, alcohol and tobacco, transportation, furnishings, household equipment and services, financial and insurance services, health, communication, clothing and footwear, and education. WPI measures changes in the price that employers pay for labour, arising from market factors by both the private and public sectors of employment. AWE measures the level of average earnings in the NT.
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Consumer price index | Wage price index | Average weekly earnings | Explanatory notes
Prices and wages statistics are based on data reported by the Australian Bureau of Statistics (ABS). For the latest available data and analysis, see the Department of Treasury and Finance’s Consumer price index, Wage price index and Average weekly full-time earnings economic brief. For further analysis on house prices and fuel prices , please go to the relevant webpages.
Consumer price index
In 2018-19, the Darwin consumer price index (CPI) increased by 0.9% (Chart 1). The categories that recorded the largest yearly increase were alcohol and tobacco (mainly tobacco) followed by education (mainly secondary education).
Darwin recorded the lowest yearly CPI increase of all capital cities. The change in other capital cities ranged from an increase of 1.3% in Perth to 2.5% in Hobart. Table 2 shows the quarterly and year-on-year changes in the Darwin CPI groups.
Each group in CPI is given a weighting depending on its relative importance to household expenditure, which is outlined in Table 1.
Table 2 shows the quarterly and year-on-year changes in the different components in the basket of goods. The Territory recorded the highest quarterly increase of the capital cities at 0.8%. The main contributors to the quarterly increase was recreation and culture (mainly domestic holiday travel and accommodation), whilst the main detractor was financial and insurance services (mainly financial services).
The category of alcohol and tobacco (mainly tobacco) recorded the largest increase in year-on-year terms, up 7.9%, followed by education (mainly secondary education) up 3.6%. The categories that recorded the largest price declines in 2018-19 were communication (mainly telecommunications), which has been declining since 2014, followed by furnishings, household equipment and services (mainly non-durable goods), down 4.5% and 1.6%, respectively.
Wage price index
In the June quarter 2019, the Northern Territory (NT) wage price index (WPI) increased by 0.2%, with public sector wages increasing by 0.1% and private sector wages increasing by 0.2%. Alongside Tasmania and South Australia, this was the lowest quarterly increase in WPI of the jurisdictions, with the highest being 0.7% in Victoria.
In 2018-19, NT WPI grew by 2.1% (Chart 2). Public sector wage growth was stronger (up 2.9%) than the private sector (up 1.6%). Nationally, WPI grew by 2.3% over the same period, with public sector wage growth (up 2.5%) stronger than the private sector wage growth (up 2.3%).
Based on the 2016 Census data, the median total weekly personal income of women who are working full time in the NT is less than the median for males in the same industry, across most industries. Even in industries where there are a higher proportion of employed women, such as in education and training, and health care and social assistance, males are still earning a higher median weekly income, as they are more likely to hold senior positions than females. The income gap of full-time working women in the NT is wider than the national figures. However, the NT has a more equal workforce gender distribution across most industries compared to Australia (Chart 3).
Average weekly earnings
According to ABS, in the year to May 2019, the NT average weekly full-time earnings (AWFTE) decreased by 3.4% to $1,771 and was the largest year-on-year decrease of all jurisdictions. However, the NT recorded the third highest level of AWFTE of the jurisdictions, behind the Australian Capital Territory ($1,835) and Western Australia ($1,852). In the year to May 2019, the AWFTE for males in the NT decreased by 7.8% while the AWFTE for females increased by 5.0% (Chart 4). Nationally, the AWFTE increased by 2.5% over the same period, with female AWFTE increasing by 3.5% and male AWFTE increasing by 2.1%.
Explanatory notes
Inflation is a key economic indicator that measures the change in the general level of consumer prices over a given period of time. ABS measures inflation in the economy through changes in CPI. CPI measures the price of a representative basket of goods and services in each Australian capital city. Each group in CPI is given a weighting depending on its relative importance to household expenditure, which is outlined in Table 1.
The ABS introduced the 17th series of weighting pattern of the CPI series due to incorporating the results from the Household Expenditure Survey 2015-16. The introduction of the new CPI series has resulted in a break in the time series regarding components percentage point contributions to the CPI growth rates.
The ABS WPI measures the influence of market factors on the price employers pay for a standard unit of labour. To establish a standard unit of labour for the index, the ABS holds the quantity and quality of labour services constant by excluding changes in the composition of the labour force, hours worked and changes in characteristics of employees (such as productivity) from the index.
The ABS average weekly earnings (AWE) survey is designed to measure the level of average earnings in Australia at a point in time. Movements in average weekly earnings can be affected not only by changes in the level of earnings of employees but also changes in the overall composition of the labour force. This relates to variations in the occupational distribution within and across industries, distribution of employment between industries and proportion of male and female employees.
AWE are not comparable with those for the WPI. They have different purposes and concepts and use different sample selection and estimation methodology. The WPI is a price index to measure changes over time in the price of wages and salaries and it is unaffected by changes in the quality and quantity of labour services. AWE measures the level of average earnings and, in addition to changes in the price of labour, is affected by changes in hours worked and by compositional changes. For further detail on the methodology, concepts and sources please go to the ABS website.