PRICE CONTROL

Otago Daily Times, Issue 24827, 29 January 1942, Page 6

PRICE CONTROL

HOW IT WORKS WAR-TIME OPERATION "The objective of war-time price control in New Zealand, as in most other countries, is the protection of the consumers."—Mr H. L. Wise, a member of the New Zealand Price Tribunal, on "Price Control in New Zealand," in the Economic Record. Mr Wise goes thoroughly into the system of price control in New Zealand, distinguishing between control and fixation. He remarks that probably the most usual purpose of control in recent years has been "to aid the producer to receive a profitable price for his product," and he cites the New Zealand examples of fixing prices for wheat and raw tobacco. Closely related to control is orderly marketing; " still a further objective," he says, " is to protect consumers against rising prices, and particularly against extortionate or unreasonably high prices." and particularly so during war time. But " prices may be fixed at relatively high levels in order to encourage expansion in the production of certain products"; and he mentions wheat as an example Hunt for Profiteers Profiteering Mr Wise defines as " charging a price that is unreasonably high "; but "what is a reasonable price and a reasonable profit? " " The experience of the last war," Mr Wise continues, "showed that very much more was necessary than a mere hunt for profiteers and a much more fundamental and rational obnective was to limit, as far as possible, rises in prices in New Zealand to the extent of the increases in costs due to the war."

This. then, is the objective of the New Zealand Government's war-time policy of price control as Mr Wise sees it; a much broader objective than that of hunting for profiteers. He furnishes examples of control in New Zealand over the prices of wheat, flour, bread, and petrol, also describing the Acts and regulations under which control is exercised. Dealing with control over the price of sugar—a commodity which rose sharply in price overseas when war broke out—Mr Wise estimates that stabilisation saved New Zealand up to the end of June, 1940, about £300,000, "which the consumer would have had to pay if replacement cost were allowed."

The procedure of applying to the New Zealand Price Tribunal for permission to increase prices has been " simplified as much as possible with a view to reducing to a minimum the time factor and causing as little inconvenience as possible to traders." Expert investigating officers are employed to investigate applications to the Price Tribunal for advances in prices. The policy and procedure adopted, though misunderstood by some sections of the public, have been "the means of saving them a considerable amount of money; because if an attempt were to be made to make prices generally unfform, then maximum prices would have to be fixed, the maximum would tend to become the minimum, and there would probably be a rise in the general level of prices detrimental to the consumer. "Every effort is nevertheless continuously directed by the tribunal towards stabilisation of, and uniformity in, the price level." Price differentials may be regarded by traders as undesirable, "but they have always existed in many fields,' says Mr Wise, "and have merely been continued. Any attempt to raise prices to the level of the highest price ruling has not been permitted by the tribunal."

Where uniformity in prices is desirable or necessary then " the tribunal is always prepared to treat with trade or industrial groups, always providing, of course, that such uniformity and stability in prices is not achieved at the expense of the consumer."