STABILISATION

Evening Post, Volume CXXXIV, Issue 109, 4 November 1942, Page 4

STABILISATION

PEGGING OF COSTS

AND CHOICE OF GOODS

(P.A.) CHRISTCHURCH, Nov. 3. A more complete stabilisation policy in New Zealand was foreshadowed by the Minister of Supply (Mr. Sullivan) in opemnr the conference of the New Zealand Manufacturers' Federation today; The Government had done much to bring about economic stability since the conference in 1940, he said. The elements of the inflation story were familiar enough today. ; The total national income, including wages, farm , and other income, was higher than. !ever before. There was a gap between the purchasing power and the quantity of consumer goods, available of about £100,000,000. Further increases of purchasing power would only aggravate the problem, and as industries turned more to producing goods for the war and the flow of-con-sumer goods was decreased, the \ gap became more difficult to bridge. Price control was the cardinal point of the stabilisation scheme, and it was corollary of fixing prices that incomes and costs had to be fixed as. weIJL THE PREFERABLE COURSE/ With the stabilisation of * incomes many people would agree, provided they got a little more first, said. Mr. Sullivan, and it was this attitude which tended to be one of the biggest obstacles in effecting the stabilisation policy. "We are now at the point when, in, bringing in an all-round policy, of stabilisation; which, I repeat, is absolutely vital today, the stabilisation of income cannot be balked by demands for concessions from any classes of the community. To peg everybody's income where it is might crystallise certain inequalities for the time being, but I would point out that if inflationwere left to develop and run riot the inequalities which would be created would be far more serious and far more unjust in their incidence upon the community. Thus, if stabilisation brings about the fixing of wages or farm prices at their present levels, some sections of the community may feel that they are being made to contribute more towards stabilisation than others. ■ It may be" only rough justice, but it will be far preferable than the complete injustice which inflation run amuck would bring about." USE OF PRICE TRIBUNAL. To the. present the. Government had relied oh the machinery of the Price Tribunal. In spite of all the criticism which had been levelled at the tribunal from people affected by its operations, the admininstration in New Zealand had controlled prices more effectively than any price administration in anj* other country. Now, however, there were far more ambitious schemes for price control in the United States and Canada, and in New Zealand the possibilities of more complete price stability could; be seen. • "

"A considerable amount of work is being done at present to perfect the mechanism to bring this about," Mr. Sullivan added. "The Economic Stabilisation Committee has been devoting a good deal of time lately to the consideration -of all the aspects of stabilisation and in formulating proposals for general stabilisation, ' and. these are receiving the favourable consideration of the Government." .

To manufacturers he would say that it was of little-use to hold the prices of everyday commodities if these were not the ones consumers were able to buy. It thus .became essential -to ensure that an adequate supply of es-, sential commodities be available be-, fore any less essential lines were put' on the market. The Government had received co-operation from the manufacturers in the negotiations . towards bringing about these results', .and in any. future measures needed/for the adjustment of production "to" arnelior rate the exceptional economic dislocation with which we are faced," the Government would continue to seek the advice and assistance of members of the trade affected. -:■■" -- ■- .; -;