The latest annual increase, influenced by the rise in GST on 1 October 2010, is the highest since a 5.1 percent increase in the year to the September 2008 quarter (when petrol prices peaked).
Eight of the 11 groups in the CPI made upward contributions in the year to the December 2010 quarter.
The most significant upward contributions came from: transport (up 6.6 percent), housing and household utilities (up 3.8 percent), food (up 4.6 percent), alcoholic beverages and tobacco (up 9.0 percent).
Downward contributions came from the clothing and footwear (down 1.3 percent), household contents and services (down 0.4 percent), and communication (down 0.6 percent) groups.
In the December 2010 quarter compared with the September 2010 quarter: The consumers price index (CPI) rose 2.3 percent, influenced by a rise in goods and services tax (GST) from 12.5 percent to 15 percent on 1 October 2010.
This is the largest quarterly increase since a 3.5 percent rise in the September 1989 quarter, when GST rose from 10 percent to 12.5 percent on 1 July 1989.
Transport prices rose 4.3 percent, reflecting higher prices for petrol and international air transport.
Food prices rose 2.1 percent, with higher grocery food prices the key contributor.
Housing and household utility prices rose 1.6 percent, with higher prices for the purchase of new housing and property maintenance services.
Recreation and culture prices rose 2.9 percent, influenced by higher prices for package holidays.