‘Wicked’ inflation

Press, 20 November 1981, Page 21

‘Wicked’ inflation

Inflation at the current rate of 15 per cent means that prices will double in five years, reports the Press Association. In 40 years at the rate, $256 will buy the same as $1 at present. Even at 12 per cent inflation, a man who is now 23 will find that at 65: • Wages now $lOO will become $12,800. • Rent at $2O will become $2560. • Steak at $1 will become $l2B. • Bread at 20c will become $25.60. • A shirt worth $lO will become $l2BO. These figures were given by Mr A. G. Williams, the president of the Chambers of Commerce, in Dunedin. He said the chambers began warning of the dangers of inflation in 1975, when the 12 per cent figures were worked out. “I did not believe them

myself until they had been checked,” he said, “but they were calculated six years ago and already some of the evidence is in. A loaf of bread already costs 60c, a piece of steak $3, and rent well above $20.” “But the position is much worse than that. A salary which today is $lO,OOO would become $1,280,000. If you managed to save $lOO,OOO in those 42 years it would be worth the equivalent of $7Bl in today’s money. “That is crazy, dishonest, wicked.” Mr Williams said the practical solutions were to increase real productivity and greatly reduce Government expenditure. The effect of inflation was to erode the trading capability of business, yet unless there was vigorous business development the quality of life which people sought would not be available.