The Liberal leadership duumvirate of John Howard and Peter Costello have looked puzzled throughout this campaign at the apparent concern of many voters about rising prices. The nation’s economic managers point to the low inflation number in the official statistics and a growth in real wages to back up their contention that things really have never been better.

Labor’s Kevin Rudd and Wayne Swan, with their constant refrain of things being tough out there for working families, seem to have grasped far better that the official consumer price index does not tell the story that ordinary shoppers experience.

Since the election of 2004 the CPI has risen 8.3% but an actual decline in the cost of clothing and small rises in the cost of household goods and communications disguise the somewhat sharper rises in the price of food, alcohol and tobacco, rents, health and education.

Category Change (Dec 04 to Sep 07)
Food 13.9%
Alcohol & Tobacco 9.4%
Clothing -1.2%
Housing 10.9%
Household 1.0%
Health 15.3%
Transport 8.3%
Communications 0.0%
Recreation 3.2%
Education 15.9%
Finance 5.8%
All 8.3%

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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