Price index seen as ‘suicidal’

Press, 4 August 1977, Page 6

Price index seen as ‘suicidal’

Members of the Canterbury Chamber of Commerce were called on last evening to formulate an alternative to the “pernicious" Consumer Price Index.

The chamber's former | president and the newlyelected national president! (Mr R. Harris) told the cham-1 Ker’s monthly meeting it i disturbed him that so many I economic activities were I ruthlessly tied to the price I index. "What would happen if we were forced to do this in our own businesses?” he asked. "It would mean that we were | putting salaries and all sorts I of remuneration on a level, with overheads. “It’s so ludicrous that we accept a pernicious thinj like the Consumer Price Index as the basis of our I economy.”

; Mr Harris said that he , could not suggest an altemat ive. although perhaps it | could be tied in some way I to productivity. i “What can we find as the necessary standard for the I economy of this country?” I he asked. “It cannot, and I must not, be the Consumer Prince Index because that is surely the most suicidal I ' option that a free-market [economy could adopt at any I time.” Whatever the alternative was, he said, “it must be i related to that thing which is not a dirty word —profitI ability.” One of the things that dis-

i turbed him most when he . took office was the general : acceptance of inflation amongst the business community. “In our forward thinking, we plan for. and accept, the principle of inflation —in I many cases we must,” he [said. “It would be fallacious to suggest that any of us disregard the problem.” But there might be opportunities for members to fight inflation actively, said Mr Harris, and they should take every opportunity to do so. “Bear in mind to what extent you are generating it, [allowing it, bearing with it; but above all accepting it —

because it is not inevitable,” he said Mr H. A. L. Wily, chairman of the chamber’s energy-resources committee, said that the incentives announced in the Budget for small hydro-electric schemes were good. But he was concerned at the requirement that output of a scheme be related to electricity usage within the supply authority’s area. Many valuable schemes would not be proceeding because they would produce too much power. Provisionally, he supported lower electricity icharges in the South Island but only on the basis that it [was to encourage regional (development, rather than ne the beginning of a regional

ipricing scheme. It could also help redress (the imbalance of energy costs (between the two main [islands, caused by the natural-gas supply in the north. Mr J. M. T. Greene, chairman of the economic affairs committee, said that while private contractors had little work and expensive contracting equipment lay idle, the Government was importing more.

“If, as the Government claims it wants to save money, it could hand over a number of its labourintensive activities to the private sector,” he said.