Incomes, prices policy needed

Press, 27 September 1982, Page 16

Incomes, prices policy needed

PA Blenheim An economist. Professor Bryan Philpott, has said it is imperative that New Zealand adopt a permanent incomes and prices policy, which should be ready for introduction when the present wageprice freeze is lifted. In a paper given on his behalf to the Manufacturing Engineer's Federation conference at Picton, Professor Philpott said that fine-tuning of expenditure, to ensure that demand steadily rose at full employment ndn-inflationary rates, was “incredibly difficult."

He said this was not made any easier by the three-year election cycle of excessive spending. Any incomes and prices policy should be flexible and must be embedded in some

formal,machinery such as a stabilisation commission. Professor Philpott said.

He advocated a return to the annual General Wage Order system, but said trade unions should be allowed to bargain for higher wage increases than the maximum set. provided these increases were not passed on in higherprices. . This would mean that additional increases would have to be absorbed in higher productitivy or export prices, he said.

Professor Philpott said he doubted whether - taxation, levels could 'be lowered. However,. he believed there ' should be’a switch to indirect taxation, heavily concern’trated in the area of im--ported goods and services.