MR MARSHALL: People ready for tougher measures

Press, Volume CXII, Issue 32848, 23 February 1972, Page 2

MR MARSHALL: People ready for tougher measures

(New Zealand Press Association)

ROTORUA, February 22.

The people of New Zealand are ready for tougher measures to control inflation, the Prime Minister (Mr Marshall) believes.

The Stabilisation of Remuneration Act and the Re* muneration Authority had made some impression on inflation, he told the opening session of the annual conference in Rotorua of the Associated Trustee Savings Banks. “But we need to go further.”

“I believe the people generally are now ready for tougher measures if it can be shown, as I believe it will be, that they will contribute to greater stability and that they will operate fairly between worker and employer, and between buyer and seller of goods and services,” Mr Marshall said.

“The Government has till March 31, under the cover of the freeze which has now been imposed on prices and

the pause for wages and salaries, and by that time plans to bring in a simple, practical and realistic policy for restraint on prices and wages. “We are working now with our experts to evolve this scheme, which will impose a sufficient restraint on increases in wages and prices. It must not be a rigid restraint.” Mr Marshall said that in a growing economy affected by overseas conditions, and with innumerable changes in individual circumstances constantly taking place, there must be room for flexibility —for some price increases and for some wage increases.

“Over a period of a year there will be some price rises,” said Mr Marshall. “We must see that they are kept to a minimum.

“There will be some wage increases, but they, too, must be kept to a minimum in the interests of the wage-earner himself.

“We must evolve a system of wage and price restraint which is simple and automatic where that is practicable, and where that is not practicable then we must have a system with as little direct price and wage control as is necessary.

“Direct price control of all goods and services would require an army of inspectors and controllers, which we do not have, and do not wish to have.”

Mr Marshall said any system of wage restraint would have to be fairly related to price restraint. “There is some room for manoeuvre here. Wages on average have increased more than prices. “In the last two years, from October, 1969, to October, 1971, the average weekly ordinary time wages increased by nearly 33 per cent, and nominal weekly wages have increased by more than 38 per cent on the Government Statistician’s index in the last two years. The Consumer Price Index increased by 19.1 per cent between December, 1969, and December, 1971.

"Even allowing for taxation and for increases in productivity, the increases in wages are still a good deal more than increases in prices.

“Must be fair”

“Whatever we do must be fair, and be seen to be fair, over the wage structure as a whole. In a complicated economy such as ours it may not be possible to be completely fair to everyone concerned, but the endeavour must, and will be. made to cause as little injustice as possible.”

Mr Marshall told the delegates that trustee savings banks had good cause to support the Government policies for greater stability.

It was in the interests of all savings banks and of their hundreds of thousands of depositors that there should be restraints to any drop in the value of money.