Senator Faulkner asked the Minister representing the Minister for Finance and Administration, upon notice, on 23 June 1998:

(1) How does the Government propose to apply the Australian Bureau of Statistics (ABS) Wage Cost Index, ABS Information Paper of 26 March 1998.

(2) How will the index affect wage cost indexation arrangements for Commonwealth own purpose outlays and specific purpose payments.

(3) Given that the 1995 Budget papers stated that the present index based on safety net adjustments would be reviewed, is it the Government's intention to apply the new index in the next Budget.

Senator Kemp (Assistant Treasurer) —The Minister for Finance and Administration has provided the following answer to the honourable senator's question:

(1) It is not considered appropriate to apply the ABS Wage Cost Index to Government expenditure such as running costs, specific purpose payments (SPPs) and Commonwealth own purpose outlays (COPOs) of a running costs nature as the ABS index does not include non-wage components such as superannuation and pay roll tax and it does not include a productivity discount.

(2) The ABS Wage Cost Index does not apply to COPOs or SPPs.

(3) The Government does not intend to apply the ABS Wage Cost Index in the next Budget. Indexation arrangements are reviewed prior to each budget to determine whether more suitable arrangements are available.