The Press FRIDAY, MARCH 10, 1950. Loosening Controls

Press, Volume LXXXVI, Issue 26058, 10 March 1950, Page 6

The Press FRIDAY, MARCH 10, 1950. Loosening Controls

The important Government announcements printed this morning show that Mr Holland and his colleagues are wasting no time in carrying out their pledge to free the country frpm unnecessary controls. Many of the remaining controls have outlived their usefulness as war-time measures or as expedients to protect the public from the effects of post-war economic distortions. The public will read with interest, and perhaps with a little anxiety, the long list of goods and services from which price controls have been removed. Clearly the Government has weighed very carefully th'e probable and possible results of this action. The exceptions from general categories are evidence of this careful consideration. In no case can it be said that the supply of the article or service lags far behind the demand. The Government believes that the normal processes of competition will effectively regulate the prices; and it is a reasonable assumption. There may be some immediate price increases; some may be only temporary. But it is highly probable that after a period of adjustment the balance will favour the consumer. For one thing, commerce and industry will be relieved of part of the heavy burden of clerical and accounting work which the price control sys-' tern has added to their ordinary costs. There will also be an eventual saving in Government administration.

The Government has indicated that it hopes to remove price controls progressively. Few will doubt its wisdom in hastening slowly in this important matter. It will, no doubt, study carefully the effect of this first decisive action before carrying the process much further. It will want to be assured that the interest of the consuming public does not suffer; for nothing would more certainly spell defeat for the Government at the next election than heavy increases in the cost of essential or. important goods and services through the lifting of controls. With their new freedom, therefore, industry and commerce have a new responsibility. For while it is true that in the long run competition is the best regulator of prices, it is also true that in the short rim there is an opportunity to take “windfall” profits from a situation of this kind. It scarcely needs to be said that nothing would do more harm to the cause which the Government has at, heart —to free the country’s commerce from ham-

pering controls, not so that commerce can make bigger profits but so that it can serve the people better. The removal of the sales tax from a number of household laboursaving appliances and from various technical appliances used in industry, and the relaxation of the exchange control regulations are also welcome. The close control exercised by the Reserve Bank oyer the overseas funds, and securities of invesr tors, big and little, was justified only by the exigencies of war-time Government finance. With the justification gone, it has become an annoying and distasteful incursion into the liberties of the individual.