The Press TUESDAY, MAY 4, 1937. The Cost of Living

Press, Volume LXXIII, Issue 22083, 4 May 1937, Page 8

The Press TUESDAY, MAY 4, 1937. The Cost of Living

The frequency with which the Government issues statements on the upward trend of the cost of living, and the argumentative tone of those statements, indicate that the problem is causing it anxiety. That is as it should be, for it is clear that prices of food, clothing, and housing are increasing at a rate which must soon cause hardship to wage and salary earners, and particularly to the large class of salary earners which did not benefit from the recent restoration of "cuts." But the Government's periodic surveys of the situation would be more helpful if they were iess disputatious. Tne effect of recent social legislation on the cost of living is an interesting topic for discussion and investigation; but since most of what has been done cannot be undone, at any rate for many years, it is not of immediate and practical importance. The most important question is what measures the Government proposes to take to mitigate the social evils which necessarily result from a rapid rise in prices. Because of currency depreciation, increased gold production, and a general tendency to accumulate heavy stocks of basic commodities —to mention only a few of the factors—there is every prospect of a sustained rise in prices such as occurred in the nineties of last century. Though nothing that the Government can do will insulate New Zealand from the effects of this trend, its trade, monetary, fiscal, and public works policies will either mitigate or intensify these effects. Present indications are that they will intensify them. Rigid bilateralism in trade, such as Mr Nash advocates, has everywhere raised the prices of articles exchanged; and expansion of credits accompanied by heavy spending on public works and housing is inevitably creating a mild internal boom. Against this the Hon. D. G. Sullivan, in a statement .printed in "The Press" yesterday, sets the Government's rent fixing legislation, the Prevention of Profiteering Act, and the scheme for distributing free milk in schools. The net effect of price fixing measures has been, is now, and will always be, completely negligible in an economic system based on free enterprise. Mr Sullivan claims that the Prevention of Profiteering Act has been " generally effective in pre- " venting any undue rise in prices:" It is not very important to know whether rises in prices are due or undue. What is important is that prices are rising—and at an accelerating rate. What the public 'wants to know is whether the Government proposes to accommodate its policy to this fact, or whether it will be content to pretend that the situation can be controlled by the long-discredited expedient of price fixing.