Rates Double Inflation

The usual media reporting about council rate increases has been active for last month and a bit.

In our own case criticized for a rate increase double that of CPI or inflation. This is the measure by which we judge the fairness or otherwise of course of price increase.

I have blogged in previous years about the Consumer Price Index being the wrong measure to judge how much the rates should increase.

The CPI is a measure to establish how much the general range of goodies that we all have to buy each week increased or decreased (as happens rarely). Council does not purchase food and the other components of this consumer shopping basket, except for fuel of course. We purchase bitumen and concrete. We pay wages and these have increased more than the CPI.

But the media cry will be, and fair enough, this should be about the rate payer’s ability to pay the increase. Lets face it, if bitumen has gone up more than you and I as rate payers can afford then we will have to stop upgrading our roads, let them go to rack and ruin.

This has prompted me to check wage movements in South Australia because surely our capacity to pay should not be measured against the CPI but in wage movements. Remember CPI is how much more we are spending on a group of commodities we all consume.

So what did I find. Surely by co-incidence I found by going to the Bureau of Statistics webpage that our rates match recent wage movements.

Yes the increase in full time Adult average weekly ordinary time increased 4.5% between Novemebt of 2011 to November 2012. I got that from the table on this page

http://www.abs.gov.au/ausstats/[email protected]/Lookup/6302.0main+features7Nov%202012

What I have not been able to do is find out what increases have applied to the various pensions. Google did not help me. I will endeavour to find out and quite frankly if adult ordinary wages have increased 4.5% then the Government is surely duty bound to ensure pensions have kept pace with this and not simply adjust by the CPI.

So I finish by asking a question. What is a fair increase in light of this?

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