Vol. 505 No. 3
67 Mr. Dennehy asked the Taoiseach if he will request the Central Statistics Office to research alternative methods of measuring the cost of living, given the widespread concern that the current consumer price index does not adequately reflect the cost of accommodation, home owner ship and transport; and if he will make a statement on the matter. [13674/99]
The consumer price index, as an indicator of inflation, is designed to measure the change in the level of prices paid for consumer goods and services by the average private household in the country. In this regard the construction of the Irish CPI conforms to the highest international standards.
The CPI does include changes in mortgage interest costs. These costs reflect not only changes in interest rates but also the increasing size of the average mortgage. Measurement of the latter takes into account the trend in house prices and thus these price trends are indirectly taken into account in the construction of the CPI. It should be noted that many households own their houses outright, or have long established mortgages, and thus only a very small minority of households are involved in house purchase at any given time. Therefore, the impact of recent price increases on the CPI – which relates to the average household – is limited. A wide range of other housing costs, including rents, service charges, insurance, decorating and repairs, are also covered by the index.
The index covers all aspects of transport including the purchase of new and second hand cars and motor cycles, motor tax and insurance, motor fuels and spare parts. Also included are car maintenance and repair and other vehicle costs such as parking fines and parking fees. In addition public transport costs for all modes of transport are monitored by the CPI.
The CSO methodology as outlined above is extremely comprehensive and compares favourably with that of other countries. Accordingly, I do not consider it necessary to ask the CSO to investigate alternative methods at this point in time.
