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USE OF PRICE INDEXES IN CONTRACTS

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis.

Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

This paper sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.