Bureaucrats blamed for likely inflation

Press, 2 March 1984, Page 1

Bureaucrats blamed for likely inflation

PA Wellington Five main private-enter-prise groups questioned the public sector’s commitment to holding prices in the wake of the price freeze. They warned that New Zealand was in grave danger of “bureaucrat-led inflation.” The five — Federated Farmers, the Chambers of Commerce, the Employers’ Federation, the Manufacturers’ Federation, and the Retailers’ Federation — were highly critical of the public sector’s attitude to price rises now that the freeze is over. Representatives of the five groups met yesterday and in a press statement the Chambers of Commerce vice-president, Mr Frank

Crothall, said the business community would exercise price restraint. “It is unfortunate that the same attitude is not shared by the public sector,” he said. “With our sincere desire to keep inflation down, coupled with the competitive marketplace, consumers will be pleased at the prices maintained by the private sector. “However, the same cannot be said for the public sector. In the last few weeks we have heard that gas charges will be increased up to 30 per cent, power charges up to 6 per cent, and road transport charges increased 20 per cent, as at April 1. “In the case of electricity.

some distribution authorities have announced increases of 10 per cent to industrial users. All this and some local authorities are increasing their rates. “We are in grave danger of entering an era of bureaucrat-led inflation. “When we hear that it is the Government’s job to lead, we do not expect it to be in the field of increased prices.” But the Minister of Energy, Mr Birch, said yesterday that Mr Crothall had fallen into a trap by believing that an application for a natural-gas price increase meant the increase would eventuate. It was not expected that gas prices would increase “anything like” 30 per cent,

Mr Birch said. “I would expect the rise in retail gas prices will bq well under 10 per cent, on average,” he said. “Gas prices in particular, are subject to price control and, as I have mentioned many times in recent weeks, will be the subject of the closest scrutiny by the pricing authority, the Secretary of Energy.” Mr Birch said most electrical supply authorities had kept their average rise to under 6 per cent. “A considerable number will be having a nil increase in their tariffs, with some of those being in the North Island where supply authorities are facing a 6 per cent rise in the bulk tariff.”