The indexation factor
43 The indexation factor
The indexation factor is worked out using the following formula and applying subsections (2) and (3):
Start formula start fraction Index number for the reference December quarter over Index number for the base December quarter end fraction end formula
where:
base December quarter means the December quarter that has the highest index number of the December quarters before the reference December quarter (but not earlier than the December quarter 2007).
index number, for a quarter, means the All Groups Consumer Price Index number that is the weighted average of the 8 capital cities and is published by the Australian Statistician in relation to that quarter.
reference December quarter means the last December quarter before the indexation day.
The indexation factor is to be worked out to 3 decimal places, but increased by 0.001 if the fourth decimal place is more than 4.
If an indexation factor worked out under subsections (1) and (2) would be less than 1, that indexation factor is to be increased to 1.
Changes to CPI reference base and publication of substituted index numbers
Amounts are to be worked out under this section:
using only the index numbers published in terms of the most recently published reference base for the Consumer Price Index; and
disregarding index numbers published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the reference base).
This Act’s bill:Explanatory memorandumSecond reading speech
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