Consumer Price index records changes in the price of consumer goods, brought by New Zealand households, giving a measure of inflation An independent advisory committee has endorsed the practices used to compile the consumers price index (CPI) and has recommended ways the CPI can be further enhanced.
On July 10 Statistics NZ published the Report of the Consumers Price Index Advisory Committee 2013 which includes the committee’s 16 recommendations:-
Key recommendations made by the committee include:
· endorsing the CPI’s main use (to inform monetary policy setting), and its purpose (to measure inflation experienced by the household sector)
· reducing the number of regional pricing centres from 15 to between 10 and 12, in order to fund other CPI initiatives, such as providing indexes that measure price change faced by particular subgroups of the population
· providing the CPI on a monthly basis, with additional costs funded by new spending.
The 2013 committee is the latest in a longstanding series of committees appointed to independently review the methods and practices used to compile the CPI.
“The committee is a great example of how Statistics NZ is engaging to help ensure that the statistics we produce continue to meet the needs of the user community,” Acting Government Statistician Dallas Welch said. “Statistics New Zealand’s vision is for New Zealand to become an increasingly informed society through the effective use official statistics. People need to have trust and confidence in these statistics, and this committee’s work is a key way of ensuring this happens. I would like to thank the committee members for their recommendations, and the expertise and different perspectives they have brought to the committee process.”
The nine-member committee met for three days in May 2013 and was chaired by former Retirement Commissioner, Diana Crossan.
“The CPI is important to us all because it affects interest rates, it informs wage negotiations, and it is used to adjust New Zealand Superannuation rates and welfare benefits to ensure they maintain their purchasing power,” said Ms Crossan. “The committee’s recommendations will help ensure that the CPI remains relevant for these uses.”
The practice of regularly convening CPI advisory committees is in line with international best practice, as recommended by the International Labour Organization.
“I will consider the committee’s recommendations relative to other potential initiatives in the Official Statistics System,” Mrs Welch said. “However, many of the committee’s recommendations will be implemented as part of the next three-yearly CPI review, which will be completed in October 2014.”
Committee’s report & recommendations
The committee made 16 recommendations, on the following topics:
· Principal purpose
· Scope and coverage
· Consumer price change for population subgroups
· Sampling framework
· Frequency of weight updates
· Retail transaction data
· Publication frequency