Muldoon warning on 1976 inflation

Press, Volume CXV, Issue 33963, 2 October 1975, Page 3

Muldoon warning on 1976 inflation

i.Ve» Zealand Press Association)

WELLINGTON, October 1.

The 10 per cent rise in oil prices announced by the Organisation of Petroleum Exporting Countries during the week-end might mean double-figure inflation for the whole of next year, the Leader of the Opposition (Mr Muldoon' said todav.

He told the Wellington Chamber of Commerce that a National Government next year would hope to reduce inflation from the present; rate of 15 per cent to an annual rate of 10 per cent for the second half of next year at least.

“This may not now be possible. It should still be possible, however, given firm; policies and reasonable co-i operation, to diminish the ■ rate of inflation quite ■ sharply next year. “As has been said many! times. New Zealand cannot live with a continuing; dou b I e-figure rate of inflation, and rates of 15 per! cent plus will destroy the economy as we know it! within a few years.” If double-figure inflation! continued he had no doubt! that inflation accounting; would be necessary for taxi purposes, and proposed to) set up an immediate inquiry! into inflation accounting. Short of price increases,! the only effective means of I, restoring financial stability! to industry was a reduction ' in company tax — some-1! thing which he had sug-i gested to the Government! early this year out which! did not appear in this year’s Budget.

Oil policy Mr Muldoon said it was not yet clear what line of policy the Government would adopt on oil prices. “There is a remarkable division of opinion between the Minister of Finance (Mr Tizard), who wants rationing <v~ oil fuels, and the Minister

of Energy Resources (Mr Freer), the No. 3 man in the Cabinet, who does not. “It certainly would be impossible to contemplate that 'New Zealand would have to

ration oil fuels for some indefinite period going into the future. But at the moment the ball must be in the court of the Government,” he said.