Smaller price rises please P.M.

Press, 11 April 1977, Page 1

Smaller price rises please P.M.

PA Auckland Heartened by the latest figures from the Consumer Price Index — see Page 2 — the Prime Minister (Mr Muldoon) said yesterday that he was satisfied at the way present policies were fighting inflation. The index has risen 2.6 per cent for the first quarter of this year, compared with 4.4 per cent for the first three months of last year, and 2.8 per cent in the last three months. Mr Muldoon sees the latest figure as a sign that inflation might have reached the “new and lower” level the Government had sought for the last year.

It looked as though the rate of inflation was levelling off. he said. Taking the index figure with the fact that the deficit in the Government accounts was likely to be S3OOM less than at Budget time, Mr Muldoon said he was satisfied the Government policies to combat inflation were “on line and working.” He said that during his recent trip, he came across no new ways of tackling

inflation that "would suggest a change of policy in New Zealand.” Asked directly whether he had plans for budgetary moves before the main Budget, he brought out his stock answer — if anything was needed it would be done.

He said he foresaw no external pressures that would force the rate of inflation to climb. The New Zealand in flation rate was “significantly better” than Australia, better than Britain, and better than in the Middle East. It was not as good as some European countries, though. He offered two reasons for the drop in price rises — the cost of imports was

not rising as fast as before, and Government policies had settled down several internal costs, such as

housing. Mr Muldoon noted that food prices rose 4.6 per cent over the first three months of the year. It was a "quite sharp” increase, reflecting higher prices for meat and seasonal fruit and vegetables He predicted, however, that food pi ices would not increase as much over th* next three months. “1 think the rate of increase will be significantly less next quarter, and I will be astonished if items such as meat and seasonal fruit and vegetables increase by the same amount as they did last quarter.”