Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

asked the Minister for Finance and Deregulation, upon notice, on 16 November 2010:

The Matthew's Review report (Review of pension indexation arrangements in Australian Government civilian and military superannuation schemes, by Mr Trevor Matthews, dated December 2008) placed considerable emphasis, particularly within the Executive Summary, that consumer price index indexation alone was, and continues to be, adequate in maintaining the 'purchasing power' of Commonwealth provided retirement incomes. However, the Australian Bureau of Statistics (ABS) clearly states in its document 4102.0 (dated 7 August 2007) that 'Purchasing Power' and 'material living standards' are directly proportional to 'real national disposable income per capita' and 'real national net worth per capita', in other words, purchasing power is directly proportional to income and net worth after inflation. Given this does the Minister agree with the ABS analysis and definition of 'Purchasing Power'; if not, is there a preferred alternative.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The answer to the honourable senator's question is as follows:

The Australian Bureau of Statistics (ABS) has advised that "purchasing power" is the ability of households to acquire goods and services. There are two main determinants of the purchasing power of a household:

The CPI measures price change facing households. Indexing the income of the household by the CPI allows the household to maintain its acquisition of goods and services at the same level over time.

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

asked the Minister for Finance and Deregulation, upon notice, on 16 November 2010: