LIVING COSTS IN AUSTRALIA

Press, Volume LXXXV, Issue 25709, 22 January 1949, Page 2

LIVING COSTS IN AUSTRALIA

INCREASES GAINING IN VELOCITY ESTIMATE OF DOUBLED PRE-WAR FIGURES (By C. R. MENTIPLAY, Special Correspondent, N.Z.P.A.) (Rec. 8 p.m.) SYDNEY. Jan. 21. i The abandonment of subsidies, the easing of controls, the introduction of the 40-hour week and quarterly increases in the basic wage are considered to be mainly responsible for the cost of living rises which, according to all economists, are gaining in velocity. Federal Government experts now predict that before there is any general stabilisation, the cost of living in Australia will be more than double the pre-war figures. • This state of affairs has already come about in the costs of some commodities which are more than twice those of 1939. The average increase in a comprehensive list of commodities, generally regarded as necessities, however, is stated to be 45.7 per cent, on prices in the September quarter of 1939.

The latest increase of 2s weekly in the basic wage, coupled with compulsory reductions in profit margins by an average of 7| per cent., have forced many retailers into considering staff retrenchments and the abolition of all noh-profit services provided by the larger stores.

Economists take this as an indication that many traders believe that within a few months their position will be desperate. Rise in Food Costs Since September. 1947—just before the Government relaxed the wagepegging regulations—the cost of food in Sydney has risen by 23.3 per cent, and that of clothing by 29.9 per cent. Basic wages which differ in cities and country towns are computed on quarterly fluctuations in retail prices of the list of essential commodities Although comparatively few workers are actually on the basic wage, the effect of these increases is almost general. They are taken as salary loadings rather than as merely affecting workers on the minimum.

As a result. New South Wales transport utilities, already headed for a deficit estimated at £1,456.500, will be saddled with an extra £500,000 in running costs as the result of wage increases beginning with the first pay period in .February. The Australian Council of Trade Unions is approaching the Arbitration Court for a general increase of 35s weekly in the basic wage under the impression that if this move is successful wages will at last be placed ahead of costs. Experts believe that the* war-time currency inflation which is working itself out is being replaced by rises in overseas prices which the Commonwealth authorities have failed to counter by a revision of the Australian exchange rate. Observers say that the tendency of unions to make the most of their bargaining power without making any return for the benefits achieved is costing the country and the workers themselves very dearl#. There is an increasing demand for the use of incentive wage systems to stimulate production—but it is felt that the powerful and autocratic unions would never consent to this undermining of their authority. The basic wage would probably rise to £7 a week by August, said the director of the Associated Chambers of Manufacturers (Mr L. With.'ll). He forecast that prices would then reach a peak. The effect of the 40-hour week would not be felt for another 18 months.

The Commonwealth could hold the basic wage at £7 a week only if it lifted the payroll tax and removed the sales tax from general utility consumer goods.