The Economy

Press, Volume CV, Issue 31060, 16 May 1966, Page 12

The Economy

Sir, —In reply to the subleader ‘The value of money," one can agree with the statement that the banks are not solely responsible for the inflation, but one cannot escape from the fact that interest on Government loans is the cause of the tax-cost-price-wage spiral which is an unnecessary evil in any country. The question is:—How should inflation be resisted? “Urgent immediate and effective steps to stabilise the purchasing power of wages, savings and pensions” can be effected by using money created by the Reserve Bank debt-free and interest-free to replace taxes and subsidise prices, thus re-

ducing costs and putting value into money.—Yours, etc., PLAIN TOM. Auckland, May 14, 1966.

Sir, —New Zealand has slipped all right. There is no doubt that she is not the only one either, Great Britain has, too. Mr Kirk says this is because we have not kept pace with modern scientific and technological knowledge. The main cause for our decline is our stunid policy of a continual rise in our economy, which has priced us out of the world’s markets. It is hopeless to start industry with the knowledge that we can’t sell. Every time we have a rise in wages the country is worse off. The sooner our Government starts a downward movement in our economy the better it will be for everybody. Then we could produce goods and sell without any trouble. Foreign countries like our products but they don't like our prices. Instead of applying for a rise in wages the F.O.L. should apply for a reduction in costs. —Yours, etc, THE SKY’S THE LIMIT, May 11, 1966.