Inflation

Northern Advocate, 25 August 1948, Page 2

Inflation

The Government's policy had been one of steady inflation, said Mr Holland. and the workers had realised that, as the Opposition had pointed out for years, they were no better off’. If increased wages had been swallowed up in increased costs there would have been pressure for further wage increases had parity not been restored, but this move should at least put a stop to the cycle of increased wages and increased costs. The Opposition had always fought inflation .and believed that where the choice lay between higher wages and lower costs the latter was the preferable course to follow. He believed the return to parity would assist to that end.

Reiterating his party's preference for the lowest cost structure rather than a high price structure, Mr Holland said he sympathised with the wage-earners and housewives in their struggle to make ends meet. ■

Fortunately the farmers, who were most adversely affected, would through their own savings and the recent increases in overseas prices, have something to work on to ease the burden; but many exporters without reserves would have a difficult adjustment period. Traders who had valued their stocks to allow for reserves would also be protected, but the smaller traders would be in a difficult position.

“Let there be no doubt as to the attitude of the Opposition on the question of exchange rates.” said Mr Holland. “We have always wanted our currency to be on a sound basis and the relationship between the New Zealand and British currencies to be real. New Zealand currency has been on an artificial basis for many years."

! There could be no quarrel with getl ting back to a sound basis, but the I Opposition believed the process should ; have been a gradual one taken in proi gressive steps at irregular intervals, ; although, of course, no regular pro- ; gramme could have been announced, i A better time to take the step would I have been a year ago, before a heavy 1 year’s importing began.