PRICE INDEX CHANGES

Press, Volume XCVIII, Issue 29004, 19 September 1959, Page 12

PRICE INDEX CHANGES

Effect Of 1958 Budget The changed regimen of the consumers’ price index and the effects of indirect taxation on three items—alcoholic liquor, tobacco, and private motoringcaused the Court of Arbitration some concern, says the majority decision. There were indications that the heavy taxation imposed on the items by the 1958 Budget, or at least part of it, might prove to be transient, the Court says. “If the Court, in determining the magnitude of a general order, takes fully into account the 3.8 per cent, increase in the price index for which the 1958 Budget was responsible, then in the event of a reduction in that taxation in the near future the Court might be obliged to consider a general order reducing wage rates, unless the impact of other price increases more than balances any reducing effect of future legislation on the price index. “Otherwise workers would continue to be compensated for a burden of which they would have been relieved. “On the other hand, if the Court discounts to some extent the increase of 3.8 per cent., and the present rates of taxation on the three items prove to be permanent, the Court would be justified in taking that fact into account later.”