Aged Care Price Index March 2019

Statistics New Zealand has released the latest Aged Care Price Index [1] (ACPI), for the March 2019 quarter. The ACPI rose 3.6% from December 2018 to March 2019.  The increase over the year to March 2019 is 11.0%.  This is some seven times the size of the 1.5% increase in the Consumer Price Index (CPI) over the year.


31 May 19 ACPI 1


The ACPI for December Quarter 2018 shows the ongoing effect on ARC providers’ costs of the Care and Support Workers (Pay Equity) Settlement Act (2017) which took effect on 1 July 2017. As we have noted previously, Statistics NZ’s methodology for calculating the ACPI smooths the boost in costs due to pay equity out over four quarters.  The March 2019 result is the third to include the effects of Year 2 (2018/19) pay rates which began on 1 July 2018.  Total wage costs account for around 71% of all costs to providers in the sector. 

In the December Quarter 2018 Increases in prices were also recorded for gas, some food products, insurance and legal services.

Table 1 below compares increases in the ACPI and the CPI since the ACPI began in June Quarter 2010.  The ACPI increased a cumulative 42.8% from June Quarter 2010 to March Quarter 2019 but over the over the same period the CPI increased by only 14.5%.  As we have observed previously, increases in the CPI understate the true cost increases faced by ARC facility operators.

If you have any questions please contact John McDougall, NZACA Data and Insight Specialist.


31 May 19 ACPI 2


[1] Notes: NZACA has standardised on the Aged Care Price Index on the Quarterly Employment Survey (QES) basis, as this uses wages data specific to the Aged Care Residential Services industry.  In contrast, the Labour Cost Index (LCI) uses wages data at the level of the broader “Community and Personal Services” sector.  All ACPI figures reported here on the QES basis.  However, the ACPI on the LCI basis can be provided on request.