Inflation

Press, 22 January 1982, Page 12

Inflation

Sir,—Professor J. D. Gould's essay, "Devaluation will not solve N.Z.'s problems” (“The Press," January 19), had some good points for the solving of our economic problems. Two in particular, the control of the money supply and the removal of import controls, I firmly agree with. It is about time that we had some sensible action from the Government, and these two things, if started immediately, would have an exceptionally positive effect on our economy. Such countries as West Germany and Switzerland. the Governments of which keep a tight rein on their money supplies, are in an enviable position. As Professor Gould says, many of our local industries are protected from competition by strong import controls. As consumers, we suffer because of the unnaturally high prices caused by import controls. The things we are good at are neglected as a source of investment and employment.—Yours. etc.,

BARRY MILLER January 19, 1982.

Sir,—There is no doubt that the National Party's election victory was due, at least in part, to the constant claim that the high rate of the nation’s inflation was due to the large increase in oil prices. Despite the fact that the Organisation for Economic Co-operation and Development published preelection figures, no opposition candidate, to my knowledge, pointed out to National candidates that most O.E.C.D. countries had a lower inflation rate than had New Zealand. The latest O.E.C.D. figures, published in “The Press” (January 19), show that, despite oil prices, most countries did better than New Zealand. Spain and Portugal, considered backward countries, were ahead of us while the oil-importing, industrialised nations. West Ger-

many and Japan, had half our inflation rate. How confusing that oil-producing Britain should have a higher inflation rate than us.—Yours, etc., JOHN J. FORSTER. January 19, 1982.