Interesting and good piece. such an approach can also be applied about how we define official unemployment rates.

...So the CPI figures tell a lie. Surprise I don’t think! I struggled with the complex argument in this article until reaching the four point conclusion. But the light did go on where comparisons were made to USA in particular, and where the methodology of “owner occupied imputed rent” and “raw-rent” is used, with an outcome of 30%, while in Australia, 16.5% outcomes from housing cost less land value, and no private rent inclusion.

...And I leave this article wondering if the influence of raw housing rent applies to CPI at all in Australia outside of the recommendation to include it separately for social impact, with the mention of a “Survey” covering a ten year period between 1994 and 2005, (end date six years past) indicating a disparity between actual rents rising (according to survey) 41%, but CPI component for same rent rise was attributable at 23%.

...If the figures alerting us to a problem offer so much diversity between reality and truth, and methodology so flawed, outcomes of the housing statistics and their use in CPI figures show the inclination for advantage towards Government spin: So the question; is it a case of more academic dishonesty or simply another case of lack of ability and care for accuracy and relevance from Government issued statistical figures?

An interesting piece

I think the key issue is the difference between a cost of living index and an inflation measure. The Consumer Price Index is intended primarily to measure inflation, but this makes it inadequate to measure changes in the broader cost of living. Ideally, we should have both an inflation and a living cost measure.

Yes, a good piece Cameron.
Does anybody know why fish was removed from the CPI?

A fascinating piece that goes a long way to explain why the current parlous situation with respect to the houseing construction industry and the supply of housing was encouraged and masked by poorly-chosen statistical treatments.

I wonder how many of our politicians will read it, let alone grasp the message for the future?

The average price of homes in Australia today is $435,000 (seven times the annual workers wage of $65,000) and yet in 1977 the average price was $31,000 (twice the average annual workers wage of $15,000). They were relatively cheaper in the 1950-1970 era.
The top tax now is 45%, in 1977 it was approximately 60% and in 1950-1970 it was 66.6%. A low top tax is actually detrimental to the economy, when the tax is low, CEO’s and others increase their salaries, causing higher prices and with the Governments increasing the salaries of their heads of the various departments, the cost of services increase along with the costs of food, clothing, housing and transport. The consecutive Governments have encouraged the export of our resources, destroying our own manufacturing industries.

Both the Labor and Liberal/National Governments in power, doing that very thing. Many of our wage earners can get permanent work for only two or three days a week, and this is counted as permanent employment. Our industries are being destroyed by the governments exporting coal between 10% and 31% of true value, while BHP was exporting at $98/tonne, it was being traded in South Korea for $308.7/tonne, and in the Commonwealth Hansard 1957, The Mines Minister claimed it was worth 40 pounds ($80)/ton which converts to $1024/tonne in 2008. The reciprocal imports are reduced about the same, clothes fro China, tools etc from China and Japan and other goods from around the world. All the export of our natural resources is doing, is depleteing them and destroying our own manufacturing industries. Unfortunately our political partie do not have the intelligence that is expected of them, When people sign to join a party and sign that they have to promise to agree with the decisions of the majority of the party, they are showing that if they have the intelligence, they have not the integrity. If the party wanted people with integrity, they would demand that all members sign that they will honour and obey the party's constitution. Not one of the parties demand that, the party cannot be trusted