WAGE ORDER

Press, Volume LXXXVI, Issue 26122, 26 May 1950, Page 8

WAGE ORDER

Arbitration Court Hearing EVIDENCE ONCOST OF SUBSIDIES (New Zealand Press Association) WELLINGTON, May 25. The Government Statistician (Mr G. E. F. .Wood) told the Court of Arbitration to-day that taking the sum of the subsidies removed by the Government as £ 10,370,GJ0, the cpst transferred to the consumer would be at the rate of £5 Ss a year for each head of population. Mr Wood said that 66 per cent, of New Zealand's 1,900,000 people were wage and salary earners or their dependants. Mr W’ood was subject to crossexamination for the full afternoon by Mr F. P. Walsh, workers’ representative. Mr Walsh produced figures for verification by Mr Wood suggesting that the effect of the removal or reduction of subsidies would be to add £4 19s lOd for each person each year to the consumers’ bill for the items contained in the index and quoted yesterday by Mr W’ood. The employers’ representatives, Messrs W. E. Anderson and H. F. Rutland, had no questions to ask Mr Wood. The Court will hear to-morrow morning a cross-examination of Mr L. C. W’ebb, Director of Stabilisation and Marketing, the second principal witness called by the Court yesterday.

Answering questions asked by Mr Justice Tyndall, who is presiding, Mr Wood said the number of salary and wage earners at October, 1849. the b test date for which a good estimate was available, was 585.000. These salary and wage earners had 240.000 dependent .women and 420.000 dependent children, making a total of 660,000 dependants. The total of wage earners and dependants was 1.245,000. The total population of New Zealand was estimated at 1.900.000. Salary and wage earners and their dependants would be 66 per cent, of this total, Mr Wood said that if the amount involved in the withdrawal or reduction of subsidies was put at £10,370.000. it would equal an average of £5 9s a year for each head of population. On the figures already quoted it could be estimated that salary and wage earners would have io bear £6,7£0.000 of the total sum. Mr Walsh began his cross-examina-tion of Mr Wood by asking questions about average personal income and income according to groups in the community. Mr Wood said that some of these questions posed man-sized problems. It would take time to get what answers could be given. Hs Honour: We would have to postpone the hearing to get it all? Mr Wood said that some of the information required could be prepared by his department and brought forward by Monday. Mr Walsh then read to the witness a list of increases in the annual cost for the individual of items directly affected by subsidy removals and listed yesterday by Mr Wood in his estimates of price changes. Mr Walsh said that the estimates were based on consumption figures contained in the consumers’ price index. Mr Wood agreed to have this list checked. It was as follows: butter. 176.7 d increase for each person a year; tea, 159.6 d; bread, 182.5 d; flour, 62.6 d; eggs. 46.2 d: milk. 144.8 d: coal. 97.4 d: coke, 18d; gas, 133 d; three-course meal. 77.2 d; cake. 40.9 d; biscuits, 48.6 d; rail fares, lO.ld; total. 1197.6di This figure worked out to £4 19s lOd a year for each person. Additional Expenditure Mr Walsh asked the witness if he agreed that £4 19s 10s was the actual additional expenditure involved in the average consumers’ purchase of commodities from which subsidies had been removed. Mr Wood: The figure I gave earlier to-day as an estimate was £5 9s a head.

Mr Walsh then quoted from newspaper reports of increases in prices, which he said, had occurred with the removal of price control from a large range of commodities and services and some with the authority of the Price Tribunal. He included these: cream up by 2d pint, soap by £d a < > ake, dried apricots by 4£d per lb. sardines by 3d a tin, Australian pineapple by Is 3d a tin. imported matches by 3d a dozen boxes, coffee by Is 6d to 2s 6d per lb, according to grade, preserved ginger, wholesale price up by 2d per £ lb. groper by 6d to 9d, flat fish by sd, “New Zealand Herald” advertising rates by 25 per cent., rice in Dunedin by 6Jd to 7d per lb. concession rates for school children on the Auckland Transport Board’s services by 33 1-3 per cent., sugar by id per lb, treacle 20 per cent., cotton wool by 10 per cent., and State Coal depot prices by 15 to 16 per cent. Mr Walsh said that tea packers, wholesalers, and retailers were reported to be going to seek further increases in tea prices. Auckland bakers had increased small goods prices by 20 per cent., Auckland carriers and bus operators were claiming increased rates, petrol had been increased by 2d a gallon, and Christchurch milk bars had increased by 50 per cent, the price of a oot of tea. When Mr Walsh had finished his list of these items culled from newspaper reports, his Honour said he thought a number of them did not come within the regime of the consumers’ price index. The Court was required by the regulations to take into account any rise or fall in the index compiled by the Government statistician, but he would remind Mr Walsh that he could not expect Mr Wood to take into account in his evidence any item not embraced by his index. “Stabilisation Not Dead” When Mr Walsh made reference to economic stabilisation and the lifting of price controls, his Honour said that stabilisation was not yet dead as far as the Court was concerned. The Court still had to approve industrial agreements and for the Court, stabilisation was still very much alive. Mr Walsh claimed that the effect of “taking off lid and letting everything go wide open” had been to start a very steep incline by way of increased prices. If Mr Wood could collect data showing the increased prices which had followed the lifting of numerous price controls, it would be very helpful. His Honour said to Mr Wood: You will be asked to verify these reports Mr Walsh has quoted, and the critical point is to know just to what extent those items have been taken into account in the figures you have already given. To Mr F. C. Aller by. workers’ representative on the Court, Mr Wood said statistics of rents were collected every half-year in February and August. The first effects of the increase in rentals for new State house tenancies and transferred tenancies would be reflected when the figures were collected in August. Mr Allerby said he noticed that for the base period of the index at the first quarter of 1949, the price of a three-course meal was put at 2s 3£d. He had travelled round New Zealand at that time and had failed to get a meal at that price. When the workers came up against figures like that, they were inclined to query the index. Function of Index Mr Wood said the function of the index was to measure price movements. Whether the base figure was high or low, it was subsequent movements that were reflected. If the compilers of the index erred on the low side in the base price, they would not be penalising the worker. Mr Allerby: No. but it does create suspicion. His Honour said that whereas the prices taken as the base for the index •were those of the first quarter of 1949, the quantities of consumption assumed by the compilers were the 1946 consumption figures. To further questions from Mr Allerby. Mr Wood said the figures he gave the Court yesterday did not take into account the items from which price control was removed in the last week or so. His Honour: I suppose it would be impossible to give, an estimate of the

effect up to June 30 of these “imponderables” mentioned by Mr Walsh —the lifting of controls on various items? Mr Wood: Yes, it would be impossible. Until the effects are translated into actual retail prices, it is very hard to prophesy. His Honour: You would have to prnnhesv the extent of human greed. Mr Wood: That is what it amounts, to. To his Honour. Mr Wood said the index did not take account of direct taxation nor did the wage index take account of the family benefit. The consumers’ price index was not a cost, of h'v’na index- it was a measure of movements. The Court at this stage adjourned until 10 a.m. to-morrow.