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.

Key facts | Consumer price index | Wage price index | Median total weekly personal income | 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.

Key facts

Consumer price index

• Over the past five years to 2018-19, the Darwin CPI has grown modestly averaging 0.7%, below the national average growth of 1.7%. However in the 10 years prior (2004-05 to 2013-14) to the slow growth, Darwin CPI grew by an average of 3.1%, higher than the national average growth of 2.8% over the same period.

In the June quarter 2020:

• the Darwin CPI recorded the largest quarterly decline of the capital cities at 2.5%, the largest decline on record
• main contributors to the quarterly decrease were furnishings, household equipment and services (mainly child care due to the Commonwealth’s child care subsidy) and housing (mainly house repair and maintenance due to the Territory’s Home Improvement Scheme). These significant declines were slightly offset by continued increases to alcohol and tobacco (Table 1)
• Darwin CPI increased by 0.2% in 2019-20 (Chart 1), the lowest yearly CPI increase of all capital cities, which ranged from an increase of 1.0% in Sydney to 2.4% in Hobart
• the largest yearly increases were alcohol and tobacco (up 8.4%) followed by food and non-alcoholic beverages (up 2.8%) and education (up 2.3%). The largest price declines were insurance and financial services (down 4.3%) and communication (mainly telecommunications), which has been declining since 2014 (down 3.7%)
• each group in the CPI is given a weighting depending on its relative importance to household expenditure, which is outlined in Table 2.

Wage price index

In the June quarter 2020:

• NT WPI increased by 0.1%, with public sector wages unchanged and private sector wages increasing by 0.2%
• this was the third lowest quarterly change in WPI of the jurisdictions
• NT WPI grew by 2.3% in year-on-year terms, with public sector wage growth (up 2.6%) stronger than the private sector (up 2.1%) (Chart 2)
• nationally, WPI grew by 2.1% over the same period, with public sector wage growth (up 2.3%) stronger than the private sector (up 2.0%).

Median total weekly personal income

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
• the income gap of full-time working women in the NT is wider than the national figures
• NT has a more equal workforce gender distribution across most industries compared to Australia (Chart 3).

Average weekly earnings

In the year to May 2020:

• NT average weekly full-time earnings (AWFTE) increased by 1.6% to $1,786 and was the lowest year-on-year increase of all jurisdictions
• NT recorded the third highest level of AWFTE of the jurisdictions, behind the Australian Capital Territory ($1,870) and Western Australia ($1,885)
• the AWFTE for males in the NT increased by 0.5% and the AWFTE for females increased by 2.9% (Chart 4)
• nationally, the AWFTE increased by 3.8%, with female AWFTE increasing by 4.1% and male AWFTE increasing by 3.8%.

Explanatory notes

• Prices and wages statistics are based on data reported by the Australian Bureau of Statistics (ABS).
• 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 17^th 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.