Central Statistics Office should change the Consumer Price Index to reflect cost of living for renters & lower income households – Pearse Doherty TD
Sinn Féin Finance spokesperson Pearse Doherty TD has today written to the Director General of the Central Statistics Office to request that the CSO changes how it calculates and presents inflation to better reflect the prices rises felt by lower income households.
Speaking today, the Donegal TD said that the Consumer Price Index conceals rates of inflation experienced by renters and lower income households, who spent a higher proportion of their income on items like food, energy and rent.
Teachta Doherty said:
“The cost of living crisis affects all living standards, but it impacts lower income households and renters the most.
“When prices rise it reduces more of their disposable income than the income of rich households.
“The Consumer Price Index published by the Central Statistics Office each month measures and records the average increase in prices, known as inflation.
“This number informs how employers set wages and how the Government sets social welfare rates.
“But this number conceals the real price rises experienced by lower income households and renters.
“The CSO arrive at this number by sampling the price changes across goods and services.“Then they arrive at a basket of goods and services for the average household – how much does the average household spend on energy, food, transport and other items.
“But different households spend their money differently.
“Lower income households spend more of their money on energy and food than higher income households.
“In reality, inflation for lower income households is often higher than the average.
“This reality is not reflected in the headline inflation rate that is calculated and published by the CSO.
“In Britain the Institute for Fiscal Studies projects that inflation for the lowest-income tenth of households will be 1.5 percentage points higher than the highest-income households.
“This is because they spend so much more of their income on heating and electricity.
“I want that to change. It can and it should.
“The CSO should publish not just the average inflation rate, but the inflation rate by income category and housing category.
“This will show the price increases being felt by lower income households and renters.
“The CSO should also increase the number of price points for items it collects, to better reflect price changes in goods bought by lower income households, like food, which can often see higher prices.
“Today I have written to the Director General of the CSO asking that they make these changes.
“This will better reflect the reality facing workers and families, and better inform public policy and wage setting.”