CPA Australia has urged Australia to adopt monthly CPI reporting to provide the Reserve Bank as well as governments and businesses with access to more timely inflation data.
Currently, the Australian Bureau of Statistics (ABS) reports CPI on a quarterly basis with the latest figures covering the March quarter being released in late April.
The accounting body argued that the RBA’s fight against inflation has been hampered by having to rely on quarterly data, including for its latest decision to lift the cash rate.
“These are the same figures it relied on to raise interest rates by a quarter of a per cent in May and will be the same figures it relies on at its July meeting,” said CPA Australia senior manager business policy Gavan Ord.
“Because Australia only reports CPI data quarterly, we have a limited understanding of the impact May’s interest rate rise had on inflation.”
Australia is one of the few advanced economies to report CPI data on a quarterly basis.
In comparison, Mr Ord said that the US Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England all had access to inflation data within weeks of making their rate calls.
“With inflation at a twenty-year high, the RBA couldn’t afford to wait until June quarter CPI figures are released in late July, before acting,” he said.
“However, if the RBA had access to monthly CPI figures, like most advanced economies, it would be in a much better position to form a view and respond effectively. This would also give governments, businesses, and other organisations more timely and accurate information to influence financial decisions.”
CPA Australia has called on the Labor government to implement the proposal for monthly CPI reporting as part of the first budget handed down by Treasurer Jim Chalmers in October.
It said that, while the change may require additional funding be provided to the ABS, the benefits would significantly outweigh the costs.
“We’re in a high inflation environment; we need to be agile. This necessitates a degree of urgency to this proposal,” said Mr Ord.
“Relying on quarterly CPI data when the rest of the world gets it monthly, is like waiting at your letterbox for updates when your neighbour gets them on their phone.”
