CONSUMER PRICE INDEX REVIEWTreasurer
Treasurer Winston Peters has welcomed the recommended changes to the Consumer Price Index. He says the changes will have minimal effect on average inflation figures in the future.
"The changes to the CPI will have no significant implications for indexation of welfare benefits, Government Superannuation benefits, National Provident Fund pensions, alcohol and tobacco excises or superannuation.
"Further, I consider the proposed changes to the CPI will not prove to be "materially" detrimental" to the interests of Government inflation-indexed bondholders. (The CPI is used when calculating the indexed component of indexed bonds.)
"The proposal to remove interest payments from the Consumer Price Index is consistent with international practice and was recently recommended in Australia," said Mr Peters.
He noted that the CPI will continue to include home ownership costs apart from mortgage and other interest payments.
Mr Peters also welcomed the recommendation that Statistics New Zealand should review the definition and pricing of central and local government charges in the Consumer Price Index.
His comments follow the Government Statistician's release of the Consumer Price Index Revision Advisory Committee's report on the Consumer Price Index Review. The Government Statistician supports the Committee's recommendations.
The purpose of the CPI review, undertaken at six-yearly intervals, is to ensure the CPI is appropriate to its main uses. It involved extensive consultation, including consideration of submissions from the public.
The review of the CPI is a technical matter on which a decision is made by the Government Statistician independent of the Government.