Welcome to Netrider ... Connecting Riders!

Interested in talking motorbikes with a terrific community of riders?
Signup (it's quick and free) to join the discussions and access the full suite of tools and information that Netrider has to offer.

Yes, The ABS CPI no way represents the inflation rate

Discussion in 'The Pub' started by AdamSmith, Nov 22, 2007.

  1. To many ordinary Australians the actual inflation rate they perceive
    when the go shopping seems to be significantly higher than the numbers
    regularly published by the ABS and some background research suggests
    that maybe the average person might be right.

    The ABS has followed the US 'Boskin' Report. As a consequence the Australian CPI in no way represents the real inflation rate. Why did the ABS make the changes? Simply to copy the US. And because it suits the politicians aims. Most of the changes were made in 1999 and the ABS is planning more.

    If inflation is lower it looks good in a lot of ways. Also, Australian government employees superannuation is paid indexed to the CPI and so are many benefits. This means the government has to pay a lot less in super and benefits, which is the same reason it was changed in the US.

    But don't believe me. Believe a Princeton Economics Professor Angus Deaton. See what he has to say in 1997 about the Boskin report.
    Do a Google search for "Angus Deaton" or Boskin CPI
  2. I thought ABS was an independent body? similiar to RBA.
  3. There is plenty on it on the net

    Information on Deaton is at:

    Also worth reading are:






    Here is a quote from someone not so happy about the 'adjustments'.

    "inflation is roughly at least 3% higher than what is being reported",
    which is due to the government implementing the foul and dishonest
    tricks of the Boskin Commission Report.

    These slimy adjustments nowadays being made to inflation calculations
    have come to be called "hedonic adjustments" stemming from the word

    which is found at: http://www.dailyreckoning.com.au/inflation-6/2007/05/01/
  4. No it is a government department

    They are a government department they answer directly to a Minister.

    Even the RBA isn't all that independent. The Auditor General is as he is appointed by the parliament and answers to the parliament. But otherwise they are all on performance contracts and don't get paid as much if the Ministers are not happy with them.
  5. I think they should get back to permanent heads

    The pollies used to get 'free and fearless advice'. They don't anymore. They are no longer permanent heads in charge of departments which means that once the Minister (the pollie) isn't happy with them then end of their contract they are out or sooner if the pollie is really unhappy with them. See how many heads of defence have been rolled in recent years.

    Because they are not permanent they have to say what the Ministers or government of the day is happy with. Look how head of the Federal Police was forced to retract things he's said. Also, remember children overboard.
  6. Re: No it is a government department

    RBA isn't all that independent? gee if they weren't, i would have thought they may have left raising interest rates so many times until after the election, leave labour holding the shitbag and been able to get howard in again 4 years down the track.

    Government department yes, but answering to a minister im not happy about. Im not very knowledgable in the bureacracies going on here, but i would have thought the ABS would have been much more credible as a body if they were totally independent? Are you saying the minister they answer to could influence certain statistics?
  7. They are all 'operators' now

    The government appoints many to the RBA board and others are departmental heads like the Secretary to the Treasury, Ken Henry. I think they could see that Howard is history so it probably didn't stop them from putting rates up. Also, there is the other side that the markets expected them to put rates up and if they hadn't their reputations would have been shredded and the pollies post-election would probably have critisized them for not being brave enough. They were in a difficult position. If they didn't it would have looked as if they were in the pollies pocket.

    But it is all very political in the Australian Public Service now, very much no longer what you know.
  8. So you didn't think the existing thread on exactly the same subject, posted 4 DAYS before this, was covering the subject adequately :roll:????
  9. Anyone got some good links to the Australian CPI calculations and what is in the basket they calculate on, etc? Historical figures perhaps?

    I'm just about to talk to the boss about CPI pay increase, etc and want to know what to use as bargaining, etc.
  10. from the other CPI thread
    and any particular reason you chose the name adam smith? no specific economic biases i assume :shock: :?
  11. mmm father of capitalism if i remember rightly from yr 9 history.