Page 3673 - Week 09 - Tuesday, 23 August 2011

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education, health and transportation. Clearly it is not possible for the majority of families or individuals to have all that they might want, but the majority of families find themselves in the position of always having to balance the needs against the wants. There is always that instant where our children learn the harsh facts of life that the money simply does not gush out of the hole in the wall whenever somebody needs it; that somebody has to earn it and somebody has to put it there.

All individuals and families have limits on their capacity to satisfy their needs let alone their capacity to spend on those things which an individual or a family might want as a luxury, for instance, things like Foxtel. Now there is a luxury. We know that the Chief Minister believes that, if you are finding it a bit hard, the thing you should give up is Foxtel. Not that her government will give anything up; not that her government will do anything to make it easier; not that her government will listen to ordinary Canberrans, but Canberrans should give up their Foxtel. It is a simplistic approach from a simplistic government.

Limits on spending arise from differences in income, differences in the quality of things that might be desired, differences in availability of goods and services. All these factors come into play as we consider the cost of living pressures which are being faced by Canberra families; pressures which are even more prevalent under this Labor government because they fail to understand that things are tough out there. The flippant and trivial offhand comment of the Chief Minister that people should turn off their Foxtel for a couple of months shows how out of touch the government have become after a decade in government.

We need to ask why families are under even more pressure now to pay for goods and services. There are various reasons for this increasingly awkward situation for some families. Firstly, there is the increase in prices as represented by the consumer price index. Now the CPI is recognised as the basic indicator of changes in price in Australia. In recent years, particularly following the global economic and financial crisis of 2008-09, the CPI has increased quite strongly. After the reduction of the CPI in the December quarter 2008, the CPI is now growing by well over three per cent on an annual basis.

There are two important comments to make about the increase in CPI. First, the CPI can be subject to dramatic changes in some components, even with the adjustments for seasonal effects and increases in food prices, such as bananas for instance and the changes in the price of fuel, which are two significant factors influencing the CPI. Secondly, the CPI does not include all those goods and services which people buy. This applies particularly to some financial services, which in recent times have become quite costly for families. Notwithstanding these comments, the CPI has shown that overall prices across the usual basket of goods and services have been growing quite strongly over the past two years or so. One only needs to refer to the Reserve Bank chart on the consumer price index to see the steep gradient of the chart from December 2008 until today.

The second factor that is placing more pressure on families as they seek to cope with the rising cost of living is the costs of goods and services which might not be included in the CPI. It is worth mentioning one increasingly significant group of people in the

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