'Price index will show further rise’

Press, 14 July 1982, Page 20

'Price index will show further rise’

PA Wellington Inflation figures for September -will • show another increase even if the wage price freeze is effective, according to a former Government Statistician. Mr J. V. T Baker The September consumer price index will contain the full effect of a number of recent price rises, which have been effective for only part of the June index. Mr Baker says in his publication “What the Figures Mean."

“Thus a sizeable further upward movement is inevit-

able, even with a fully effective price freeze." Mr Baker, who runs an independent management and economic statistics consultancy. has doubts about the effectiveness of the freeze. The number of exceptions to it was “threatening." Nor would the freeze itself control inflation, he said. "Price and wage increases are a symptom rather than a cause of inflation. "If- the Government does not seize the opportunity to deal firmly with the money and credit background to inflation, then the freeze is a bit like trying to seal the lid on a pot of boiling water.” Although the wage price freeze was essential to change the attitudes of important sections of the public so inflation can be controlled. the extent that exemptions were made would weaken this attitude. Examples were Government charges, increased indirect taxes, and increased import prices. “Already the number of exemptions is threatening." he said.