Reactions to measures vary

Press, Volume CX, Issue 32439, 28 October 1970, Page 18

Reactions to measures vary

The president of the Federation of Labour (Mr T. E. Skinner) said last night that although the measures announced might have deflationary tendencies, they would have inflationary effects, reports the Press Association.

“In the main costs will be borne by the working people —those least able to afford it—by way of increased prices, which means that the working people will want increased wages to compensate.” he said. “The only effective way to control the situation and keep costs down is to have stricter control over prices.

“The companies have got off scot-free. The petrol tax will be inflationary, probably more than the others,” he said. "The Minister has done nothing to arrest the expansion in the economy, which is running ahead of the labour force available. In fact, he has used a sponge to try to plug up holes in a very leaky ' ship. “The increased income tax and P.A.Y.E. will again hit those least able to afford it Cigarettes and tobacco increases willliit the pensioner,

who is now in dire straits, living on $l3 a week. “It is strange that the Minister should announce all increases before a general wage order. lam not hopeful that the decision- of the Arbitration Court will compensate for the increases announced by the Government tonight,” Mr Skiner said. “TIMELY MOVES” Mr E. B. Williams, chairman of the Bankers’ Association, said the Government’s anti-inflationary measures were timely.

“They are obviously aimed at tightening the availability of money and should have a marked disinflationary effect,” he said. “WRONG REMEDY” By wrongly diagnosing the ailments that affected the economy, the Government had applied the wrong remedy, the leader of the Social Credit Political League (Mr J. B. O’Brien) said. “The root cause of the industrial unrest and wage escalation has been the falling purchasing power of incomes,” he said. “The 10 per cent tax surcharge will further reduce income values, while tighter curbs on credit will push interest rates, and subsequently costs and prices, to new and higher levels. *

“These measures virtually invite further industrial mili- i

fancy to the point where responsible workers could be persuaded to adopt such unsavory tactics.”

PETROL RISE The increase in the retail margin of petrol was not only welcome but essential because of this week’s rise of 36 per cent in minimum wage rates for service station staff, Mr S. W. B. Duncan, of Dunedin, Dominion President of the Retail Motor Trade Association, said. For many years his association had sought a nationally uniform price for petrol, and it was pleased the Government was now taking this step.

FARMER’S VIEW It was obvious the Government had joined the cost-plus industries, the Dominion president of Federated Farmers (Mr A. C. Begg) said

in Wellington. “Two-thirds of the supplementary Budget is merely passing on increased salary and wage costs incurred in the employment of Government service,” he said. “The farming industry, facing massive increases in its costs, is being asked to carry the burden of increased Government spending.

"Because farmers are unable to pass on increased

costs, they will face further deterioration in their economic position as a result of rail, Post Office, petrol, and

tax increases. “These measures will not allay farmer discontent, nor are they likely to further the Government’s stated aim of fostering primary exports,” Mr Begg said. BUILDER PERTURBED

The president of the Master Builders’ Federation (Mr i J. S. Robson) said the an-; nouncement that building, programming would be intro-, duced on a national basis, was satisfactory. But he was perturbed that the Government had not consulted the Building Industry Advisory Council before making a decision on the matter. “NOT A CURE” Mr Muldoon’s mini-Budget would not cure the problems in the New Zealand economy, said the leader of the Liberal Reform Party (Mr C. S. Emeny). Mr Emeny said the Budget was another case of Government planning going wrong, and as long as the Government continued spending and planning as at present, mini-budgets would be needed.