11 October 2004

Second Index Proposal Wins Union Support

The Council of Trade Unions supported a recommendation that another index should be developed alongside the Consumer Price Index to better measure changes in the cost of living, CTU economist Peter Conway said today.

Peter Conway was a member of the CPI Revision Advisory Committee which released its findings today.

“The recommendation notes the relevance of a new measure to wage and salary earners, low-income households and benefit recipients,” he said.

While the CPI remained a useful measure of changes in consumer prices and was instrumental in relation to monetary policy, it was also used as a point of reference in wage negotiations and to adjust benefit payments.

“It would be better to develop some alternative indices that can provide more information on regional variations in the cost of living, the impact of owner-occupied housing, and the changes in the cost of living for groups that use the CPI primarily as an index for compensation purposes,” Peter Conway said.

ENDS

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