Aged Care Price Index December 2018

Statistics New Zealand has released the latest Aged Care Price Index[1] (ACPI) for the December 2018 quarter. The ACPI rose 2.5% from September 2018 to December 2018.  The increase over the year to December 2018 is 10.1%.  This is more than five times the size of the 1.9% increase in the Consumer Price Index (CPI) over the year.

 

22 Feb 2019 ACPI 1

 

The ACPI for the 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 December 2018 result is the second 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 electricity and gas, meat and bakery products and other services such as insurance.

The chart below compares increases in the ACPI and the CPI since the ACPI began in the June quarter 2010.  The ACPI increased a cumulative 37.9% from the June quarter 2010 to the December quarter 2018 but over the same period the CPI increased by only 14.4%.  As we have observed before, 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 Analyst, john@nzaca.org.nz.

 

22 Feb 2019 ACPI 2



[1] Notes: NZACA has standardised on the ACPI on the Quarterly Employment Survey (QES) basis, as this uses wages data specific to the aged residential care 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 are on the QES basis.  However, the ACPI on the LCI basis can be provided on request.