Labour marks end of freeze

Press, 1 March 1984, Page 8

Labour marks end of freeze

Parliamentary reporter

A 58 per cent rise in a Christchurch nursing home’s fees was cited yesterday by the Labour Party’s spokesman on consumer affairs, Mrs Ann Hercus, as an example that inflationary expectations have not been “knocked out" by the price freeze. To mark the end of the freeze at midnight last night, the Labour Party held a press conference at Parliament Buildings yesterday in which Mrs Hercus also displayed a basket of groceries she had bought in the electorate of the Minister of Trade and Industry, Mr Templeton, yesterday. Mrs Hercus refused to reveal the identity of the Christchurch nursing home, but she said she had laid a

complaint with the Trade and Industry Department. She said she was visited by the “very concerned” family of an elderly person, who was in the nursing home at a daily rate of $55. The family had been told . the rate would rise an extra $32 a day. “That family said, ‘We thought we supported the freeze. Now we don’t’,” Mrs Hercus said. She said the freeze had been shown to be not a permanent solution but a temporary palliative. Referring to the basket of groceries, Mrs Hercus said they had been bought at two shops, Woolworths and Wardells, in the Karori Mall, yesterday, at a cost of $60.29. While not claiming they were a typical range for every household, she believed the groceries were a fair representation. She proposed to repeat the exercise, with the same products, on the last day of every month until the General Election, to show Mr Templeton what was happening to prices in his own electorate.

Some of the groceries had been bought “on special” at the shops, and “specials” would be bought again if they were in the same basket of groceries. Mrs Hercus said she believed prices would slide upwards to double-digit inflation by the beginning of 1985. The goods displayed had already risen, on average, 10 per cent during the

freeze, and 20 per cent since the last wage round, she said. The “signals were already apparent” that prices would rise: electricity charges would rise, road user charges were due to go up, as were natural gas prices and commercial rents, and there was an application for a petrol price rise. All these went through manufacturing costs “like a dose of salts,” Mrs Hercus said. “That is before any wage movement,” she said. Mrs Hercus also complained that the Trade and Industry Department had been “extraordinarily lax” in prosecuting breaches of the Price Freeze Regulations. More than 1000 “known” breaches had occurred, but only 11 were prosecuted and only six prosecutions succeeded. “(That) indicates that a good many manufacturers out there knew that if they breached the' freeze, their chances; of being hauled before the courts were about zero,” she said. The Leader of the Opposition, Mr Lange, and the party’s spokesman on finance, Mr R. O. Douglas, also spoke at the press conference. Mr Lange accused the Government of targeting the sacrifices of the 20month freeze at lower-in-come earners, while higherincome earners had benefited from the freeze. He said the freeze had

achieved one of the biggest redistribution of income in New Zealand’s history, and that the redistribution looked like continuing, as the price freeze was lifted but wages remained frozen. Mr Lange promised that a Labour government would attempt to restore lowerincome earners to their previous position before the freeze, but it would not be an overnight exercise. The freeze, he said, had not improved long-term growth prospects or job opportunities. Falls of up to 6 per cent in incomes were recorded by people earning up to $315 a week. The position was somewhat better for those with families because of the family tax rebate, but those without children were much worse off, he said. “For those who can afford them, the so-called sacrifices of the last 20 months have been all right. The consumer, upper-income end of the market has done well. The boat harbour at West Haven has expanded, the spa pools in the suburbs have proliferated, the stock market has gone crazy, the company ego trips are booming, and new corporations are being floated.

“There is no end, it seems, to the expansion which those of means can now embark upon, on the backs of those whose real incomes fell as much as 20 per cent since the imposition of the freeze,” Mr

Lange said. He said the Government’s strategy for the last 20 months had been to ask “some particular sector” to carry all the sacrifices of the freeze. Asked what a Labour government would do for these people, he said, “we have to give them assurance, not great riches or anything, but just stop them being the target of wage-cutting, price-rising, and Government service-slashing, while the rest of New Zealand has been on the high escalator rise to riches.” Mr Douglas said a Labour government would adopt policies to restore growth, which would include a negotiated price and incomes policy, fiscal policy steps; reduction in the internal deficit “over time”; a firm monetary stance; and the encouragement of resources into productive, job-bearing areas, rather than speculative areas.