COST OF LIVING.

New Zealand Herald, Volume LIX, Issue 18135, 6 July 1922, Page 8

COST OF LIVING.

THE COURT'S CALCULATION. EXTENT OF THE DECREASE , METHOD OF COMPUTATION. fBE TELEQBAPH.—SPECIAL REPORTER.] WELLINGTON. Wednesday, The following is the statement from tho Judge of the Arbitration Court which was read in tho House of Representatives this afternoon by tho Prime Minister ;— , f "In accordance with the request contained in your letter 1 have ascertained the ratio between the standard cost of living as at May 31, 1922, and as at March 31, 1920. The official figures of the Government Statistician in respect of food, rent, and light have been adopted for these groups. In regard to rent tho references are qbtained only at six monthly intervals—in February and August—but, as there has been little or no movement in rents between February and May, 1922, I have taken the returns for February, 1920, and February, 1922, as sufficiently accurate for the purpose of estimating tho between rents as at March, 1920, and May, 1922, respectively. Tram aud train fares and newspapers and periodicals have beo'n similarly dealt With. • "In regard to clothing, hoots, household ironmongery and brusuwaro, crockery *nd furnishings, however, the returns for which are obtained in January and July, there has been a noticeable movement in prices since January, 1922. 1 have therefore dealt with the index numbers for these sub-groups as follows :~ln order to arrive at the correct, index numbers for March, 1920, I have added to the index numbers for January, 1920, one-third of the increase between January and July, 1920. The index numbers for May, 19<2i, have been arrived at by obtaining supplementary returns from Wellington traders as at May 31, 1922, and adjusting the Dominion returns for January, 19<!2, in accordance with the movement disclosed by the Wellington supplementary returns. " The index numbers fcr the several groups and sub-groups have been combined and weighted according to the average expenditure on each, so as to obtain as nearly as possible an accurate determination of tho cost of living covering all groups at each of the two periods in question. I have to point out in this connection, however, that the general increase in prices since 1914 has almost certainly brought about changes in the distribution of the domestic expenditure of an average family, and that, as the Government Statistician is compelled to work on domestic budgets collected over 10 years ago, there may be a margin of error in the weighting of the figures for the different groups and sub-groups. This cannot be ascertained accurately until the collection of a new set of domestic budgets is authorised. " The necessary computations to enable rhe to give a certificate as required by the Public Expenditure Adjustment Act, 19211922, have been made by the Government Statistician, whom I instructed to adopt the basis of calculation set out above. If the standard cost of living is to be re carded as based on all groups combined the ratio as at May 31, 1922, and as at March 31, 1920, is as 1621 is to 1733 Th«» percentage decrease between March, 1920, and May, 1922, is 6.46. If, however, the food groups alone are to be rerarded as the standard, the ratio as at May 31. 1922, and as at March 31, 1920, , is as 1451 is to 1617. The percentage decrease on this basis of calculation is 10.27. The base in each case is Julv, 1914, 1000. I now certify in terms of the above:—F. V. Frarer."

EFFECT OF REPORT. THE MAXIMUM REDUCTION. [BY IKLEQBAPH. —SPECIAL BKPO&TBBJ WELLmGTON. Wednesday. The Prime Minister also read the folloT»ing memorandum, signed by the Secretary to the Treasury, the Assistant Public Service Commissioner, and the Government Statistician: —

*' In response to your inquiry as to the effect of computing the cost-of-living bonus on the food groups index numbers only, we beg to state that in March. 192 C, the official retail price index numbers for the three food groups stood at 62 per cent, above July, 1914, and the aggregate bonus granted to the lower grade officers of tho service was £95. In May, 1922, Jbe food group index number was 45 per cent, above July, 1914, and the amount now payable to these officers, if computed on this basis, will be 45-62nds of £95. or £68 19s. The total reduction is, therefore, £25 Is. A reduction of £15 has already been allowing for this, the maximum reduction which can now be made on the above basis is £11 Is." SOUTHERN SANATORIUM. * _____ BLOCK OF LAND BOUGHT. AN EXPERT FROM BRITAIN. tBT TBUEOBAPH."—SPECIAL BEPOttTEB.3 WELLINGTON. Wednesday • < Beplying to a question put by Mr. J. Craigie (Timaru), the Minister for Health, Hon. C. J. Parr, related the steps that had been taken in regard to the establishment of a consumption sanatorium in the South Island, which, ho said, was undoubtedly needed. This sanatorium would be in Central Otago, and tho funds were to be found half by the hospital boards and half by the department. Tho committee representing the boards and the department had now arranged to purchase a block of land at Waipiata. The area was about 1300 acres, and the price was between £3500 and £4000. Tho committee and the Government would now

confer with regard to the erection of a building. The Government proposed to advertise in Great Britain for a tuberculosis expert—a doctor who would have special experience in sanatorium treatment. THE SOLDIERS' PENSIONS. FACTOR IN LIVING COSTS. [by teleoraph.—special REPORTER.] WELLINGTON, Wednesday. In moving the Address-in-Reply in the Legislative Council to-day, the Hon. W. E. Collins said that in spite of the bad times there was a lot of loose cash in evidence. This money, which was largely responsible for tho cost of living keeping up to a great extent, consisted of the money being paid to soldiers as pensions. It amounted annually to £1,750,000. The soldiers had earned this money, yet they were not getting the full value of it owing to the high cost of living. It was a pity the Government could not emulate the American plan of supplying soldiers with food and clothing at jre-war prices.