RDP 2001-02: Changes in the Determinants of Inflation in Australia Appendix A: Data

Jacqueline Dwyer and Kenneth Leong

May 2001

Nominal exchange rate
Definition: Australian dollar against a nominal GDP weighted-average of G7 currencies. Indexed to 1980 = 100.
Source: Reserve Bank of Australia, unpublished data.
Import prices at the docks
Definition: Implicit price deflator for merchandise imports, excluding fuels and lubricants, civil aircraft and Reserve Bank of Australia imports of gold. Indexed to 1989/90 = 100.
Sources: National Income, Expenditure and Product, ABS Cat No 5206.0.
  Reserve Bank of Australia imports of gold data not publicly available.
Tariff rate
Definition: Customs duty receipts divided by the value of merchandise imports (excluding fuels and lubricants, civil aircraft and Reserve Bank of Australia imports of gold). Seasonally adjusted.
Source: Australian Customs Service.
Retail import price
Definition: Final price of items wholly or predominantly imported in the consumer price index.
Source: Consumer Price Index; Effect of Change in Prices of Imported Items, ABS Cat No 6444.0.
Foreign export prices
Definition: Nominal GDP weighted-average of G7 export price indices. Indexed to 1990 = 100.
Source: Export price indices from Datastream.
Foreign consumer prices
Definition: Geometric import-weighted average of core consumer prices of G7 countries. Calculated as the ratio of nominal and real G7 import-weighted exchange rates. Indexed to 1989/90 = 100.
Source: Reserve Bank of Australia, unpublished data.
Oil price
Definition: Australian dollar price of West Texas Intermediate crude oil per barrel. Calculated using the US dollar price per barrel of West Texas Intermediate crude oil and the AUD/USD exchange rate. Indexed to 1989/90=100.
Source: Bloomberg, nearest contract price CL1 CMDTY.
Consumer price index (CPI)
Definition: Acquisitions consumer price index. Indexed to 1989/90 = 100.
Source: Consumer Price Index, ABS Cat No 6401.0.
Treasury underlying CPI
Definition: Consumer price index excluding selected items defined to be seasonal, volatile or non-market determined. Indexed to 1989/90 = 100.
Source: Commonwealth Treasury Department published in Consumer Price Index, ABS Cat No 6401.0.
Unit labour costs
Definition: Non-farm unit labour costs per hour per wage and salary earner. Indexed to 1989/90 = 100.
  Total non-farm labour costs (wage and salary earners) per hour divided by productivity per hour in the non-farm sector.
Source: National Income, Expenditure and Product, ABS Cat No 5206.0.
  Non-wage labour costs data obtained by special request from the ABS.
Industry wages
Definition: Average ordinary-time earnings of adults working full-time, by industry. These data are only available since 1983. For manufacturing wages used in Table 1, in the period prior to 1983, average total earnings for all adult males are used.
Source: Average Weekly Earnings, ABS Cat No 6302.0.
Type of wage contract
Definition: Awards are determinations of federal or state industrial tribunals that apply to workers in their jurisdiction. Enterprise agreements are those wage contracts negotiated collectively at the enterprise or workplace level that are registered with the Australian Industrial Relations Commission. Awards and registered collective agreements are said to comprise the ‘formal’ sector. All other wage contracts are defined as ‘informal’.
Sources: Award Coverage in Australia, ABS Cat No 6315.0.
  Australian Workplace and Industrial Relations Survey, AWIRS90 and AWIRS95.
  DEWRSB (2000).
Indexation of wages to prices
Method: In each period, the share the wage contracts eligible for indexation is identified and then multiplied by the degree of indexation. Initially, only wage contracts in the formal sector (about which there is more data) are considered eligible for indexation. Subsequently, assumptions are made about the possible extent of indexation in the informal sector.
  Formal sector
  From 1975 to 1985, only awards are considered eligible for indexation. Awards as share of wage contracts are multiplied by the rate of indexation awarded in the national wage case of that year to give a measure of the extent to which all wage contracts are indexed.
  From 1990, with the cessation of wage indexation in national wage cases, only those enterprise agreements with indexation clauses are considered eligible for indexation. For simplicity, full indexation is assumed.
  Informal sector
  From 1975 to 1985, non-award contracts comprise the informal sector. In each period, these contracts are assumed to receive the same rate of indexation prevailing in the formal sector.
  From 1990, the informal sector comprises wage contracts other than awards and registered collective enterprise agreements. In each period, it is assumed that the share of informal wage subject to indexation is the same as that for enterprise agreements with indexation clauses. For simplicity, full indexation is assumed.
Sources: Award Coverage in Australia, ABS Cat No 6315.0.
  Australian Workplace and Industrial Relations Survey, AWIRS90 and AWIRS95.
  DEWRSB (2000).
  National wage cases summarised in Plowman (1986) and ACTU (1996).
Output gap (economy wide and retail)
Definition: Actual output less potential output. Potential output is obtained by smoothing actual output with a Hodrick-Prescott filter. To avoid ‘starting-point problems’, the filter is commenced five years before the beginning of the estimation period for the output gap.
Source: National Income, Expenditure and Product, ABS Cat No 5206.0.