Industry bodies welcome inflation reporting change

Monthly CPI figures will help businesses, CAFBA says

Industry bodies welcome inflation reporting change

CPA Australia has commended the introduction of monthly consumer price index reporting, saying it will give businesses access to more timely information.

Published by ABS on a quarterly basis, the CPI is an indication of the impact of price changes on Australian consumers and businesses. CPI is currently reported by the ABS on a quarterly basis, and from October, it will also publish a monthly CPI indicator.

CPA Australia, the peak body for certified practising accountants, previously called for inflation data in Australia  to be published monthly, saying quarterly reporting was out of step with other advanced economies such as the US, the UK, Europe and Japan. This meant businesses and others were reliant on out-of-date inflation data, CPA Australia said.

CPA Australia general manager media and content Dr Jane Rennie (pictured above left) welcomed the decision made by the ABS to provide a new monthly CPI indicator.

Read more: Inflation reporting needs to change, CPA says

More frequent reporting would deliver timely information to businesses and others who rely on economic data, she said. Access to a monthly CPI indicator would “close the information gap” and “help organisations make better financial decisions”.

“A monthly CPI indicator will enable a clearer understanding of the effects of monetary policy, geo-political tensions, supply chain disruptions and local interventions on prices across the Australian economy. Australia’s economy will benefit as a result,” Rennie said.

In a high inflation environment, Australia’s businesses need to be agile and innovative, she said.

“With this announcement, the ABS has demonstrated its willingness to be responsive to the needs of the community and embrace new lower cost data sources to deliver monthly updates.”

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CAFBA chair of advocacy David Gandolfo (pictured above right) said businesses currently faced a “complex set of headwinds”.

These include staff and skills shortages, supply chain issues affecting availability of raw materials and finished goods, inflationary pressures and even sharper increases in the cost of fuel and wages. 

Added to this was a background of geo-political uncertainty with no clear indication of how long it may last, he said.  

“In this unusually uncertain environment, businesses can’t make informed decisions without accurate, real-time data,” Gandolfo said.

Gandolfo, who is also diretor of Quantum Business Finance and of the Council of Small Business Organisations of Australia (COSBA) Ltd said the introduction of monthly CPI figures would assist businesses to make accurate assessments in real-time.

Regulators such as the Reserve Bank could make monetary policy decisions which more accurately reflect the time for which they’re intended.

“For example, if we’re in month three of the current quarterly period and making decisions based on data from the previous quarter, the actual data we’re using could be up to six months old. Reducing the reporting period to monthly brings us much closer to what’s happening now rather than what happened literally months ago,” Gandolo said.

The ABS said it would release an information paper on Tuesday, which includes monthly inflation data from 2018 to June 2022. From October 26, it would provide a monthly CPI indicator, in addition to its regular quarterly reporting.