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Produced and published by the School of Historical & Philosophical Studies, The University of Melbourne
Published July 2008
Published July 2008
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The Statistical registers of Victoria have published prices of a range of commodities since 1854. Initially prices were listed under the following headings: agricultural produce, grazing produce, dairy produce, farm yard produce, garden produce, wines and spirits, and miscellaneous articles, the last including grocery articles (tea, coffee, rice and candles, for instance) and fuel (firewood and coal). There was little official attempt to collect clothing and housing prices, although economic historians I.W. McLean and S.J. Woodland's estimates, using the official statistics of other colonies and States, point to massive price rises during the 1850s followed by a slow decline through the late 1850s and 1860s. Melbourne prices rose in the second half of the 1870s, collapsed during the drought years of the late 1870s and early 1880s and rose again in 1889-90, the last years of the land boom, before falling rapidly during the 1890s depression, from which they did not recover until after 1909.
The Commonwealth statistician published the first official price index for Melbourne and other capital cities in 1912. The so-called 'A-series' measured the price of food and groceries and the rent of all types of housing from 1901 to 1912. This index was quickly adopted by Justice H.B. Higgins in his arbitration cases, and was the basis for costof-living adjustments to the basic wage from 1921 to 1934. A B-series index, compiled from 1925 to 1953, covered food, groceries and the rent of four- and five-roomed houses, but was never used by industrial tribunals. The C-series, introduced in 1921, covered the principal items of household expenditure: food and groceries, rent of four- and five-roomed houses, clothing (man, wife and three children), household drapery, household utensils, fuels, lighting, fares, tobacco and some other miscellaneous items. Changes in consumer behaviour in the 1950s - the increasing use of hire purchase, rising levels of home and motor car-ownership, and the growing demand for consumer goods - led to the introduction of the interim retail price index in 1954. This in turn was replaced by the consumer price index in 1960. Designed to pay more attention to rapidly changing consumer behaviour, it allows the composition and weighting of goods to be changed at short intervals.
In the period covered by these Commonwealth indexes, Melbourne prices have experienced a number of dramatic shifts. The A-series recorded two years of double-figure rises. In 1912 the index rose 11.1% as Melbourne experienced a massive economic boom, and in 1920 it rose 20.7%, largely because of the pent-up demand of returning soldiers and the formation of new households. It also records the steady inflation of war years. From 1929 the index recorded declining prices, and recovery from the depression only became a strong trend after 1934. In the post-World War II years the Melbourne price index records two major periods of inflation: in the 1950s, with the Korean War wool boom, and in the 1970s, with the oil crisis of 1972-73 and the wage blow-out of 1973-74.