General Election CONTROL OF PRICES

Dominion, Volume 36, Issue 304, 18 September 1943, Page 9

General Election CONTROL OF PRICES

Economic Stabilization Policy MINISTER’S REPLY TO MRHOLLAND •Now we have the interesting spectacle ,f Mr. Holland criticizing the Government for beeping prices down, said the Min - sier in Charge of Stabilization. Mr. Sullivan. in a statement last evening in which he referred to Mr. Holland s ciia cism of the Price Tribunal s handling of an application from a firm tor an increased price for denims. “Mr. Holland hud made a number of inaccurate statements, blaming the Government tor Jie increase in price of some commodities, said the Minister, “but now he wishes to have it both ways and blame the Government for its- success in keeping some prices down.” . , ~ Mr. Sullivan said that one ot the items which was considered essential iu the family budget and which was placed by the Government upon the. reeommenda-

tion of the Economic Stabilization volmission on the list of goods to be stabilized was denims. How denims, and anj other item in the extensive list of cost of living items which were stabilized, were to be held in price was a matter on which the Government sought the advice of the Economic Stabilization Commission. . The only purpose served by the 1 rice Tribunal’s letter quoted by Mr. Holland was one of exploration, said Ur. Sullivan. The Price Tribunal was one of the organs by which the Economic Stabilization Commission gathered information as to the circumstances in any industry. One matter ou which tlie Stabilization Commission always desired information was whether a firm handled lines of a luxury type through which it could be recouped for any losses incurred in holding the price of essential commodities. In some cases such a procedure could be operated with nothing but benefit to the consuming public. The Stabilization Commission considered the particular circumstances in every case. In some cases there might be no other way than that •,_o£ a subsidy. Cost of Living Factor.

“Both here and iu other countries paramount importance attaches to keeping down the prices of stabilized liucs, i.e., a range of commodities which have been specially selected because of their predominating importance with respect to the cost of living of the average family,” said Mr. Sullivan. “In some countries attention has been confined more or less solely to such classes of commodities, luxury and semi-luxury lines being allowed to go more or less free, with the result that profiteering has been indulged in iu such luxury and semi-luxury lines. "The policy of the Government in New Zealand has, however, been to control all lines whether they are of a luxury or semi-luxury class or whether they are essential in character, but since the policy of stabilization has been implemented by the Government special emphasis has been placed on the stabilized or cost of living lines. In certain circumstances it has been sound and logical to allow certain luxury or semi-luxury lines to be increased in price in order to offset a particular trader for- certain increases in costs which he has been asked to carry in respect of certain stabilized lines, and iu the case where this method has been employed it has worked very satisfactorily. It has not allowed the luxury or semi-luxury lines to run free as has been the case in certain other countries, but it has kept them under control and has at the same time been fair to the trader inasmuch as that it has compensated him for certain increases in costs which he has incurred, “Ou the other hand, the method adopted in such cases has been in the interests of the public inasmuch as it has kept the cost of the essential stabilized commodities at the stabilized level while at the same time still keeping within reason, able limits the particular goods falling within the luxury or semi-luxury category. This method has as mentioned been employed only in cases where it is appropriate and -where it has been fair both to the trader and to the public. “There is absolutely no justification, for Mr. Holland’s assertion that the Price Tribunal’s action in seeking information on which the commisison could base a recommendation to the Government is a fraud and a deception. There is not the slightest suggestion of deception or fraud in it, either from the point of view of the trader or the public. Mr. Holland apparently has little or no knowledge of the working of price control cither in New Zealand or in any other country, and apparently is entirely lacking in any appreciation of the difficulties involved in price control. The best construction I can place bn his statement is that it arose out of a misconception as to the functions of the Price Tribunal. But from Mr. Holland’s frequently expressed intention to abolish regulations,, ter let producers fix their own ceiling prices, and his unrelenting attack on subsidies, it seems clear that he has no idea at all of the need for economic stabilization.”