PRICE INDEX REVISION

Press, Volume XCV, Issue 28267, 3 May 1957, Page 11

PRICE INDEX REVISION

Mr Walsh Repeats Charge

(New Zealand Press Association) WELLINGTON, May 2. The inclusion of luxury items in the revised consumers’ price index was masking the rise in the prices of the basic items, said the president of the Federation of Labour (Mr F. P. Walsh), speaking today at the federation’s annual conference in Wellington. “This is proved by the Government Statistician’s figures for- the first nine months of 1956, when the two indices overlapped, and the revised index rose by only 49 points, whereas the original index rose by 55 points during the same period,” he said.

“In my opinion this gap between the two series of index numbers is continuing to widen because of the reduced influence which the prices of basic items now have on the index. It is in these basic items. such as groceries, that the greatest price increases are now occuring.” He said that the Minister of Finance (Mr J. T. Watts) had quoted the increased number of motor-cars and other luxury goods now in use in New Zealand. but official figures would be found to show that half the households did not own refrigerators or washing machines, and that it was much the same with privately-owned cars. People most affected by the decisions of the Arbitration Court would be among those who could not afford those luxuries, and their standard of living had no relation whatever to the price of motor-cars or the other luxuries which were now included in the index to be used as evidence of changes in their standard of living.

“There is no doubt that the index in its revised form affords a good international comparison, but that is not its principal purpose,” said, Mr Walsh. “The quoting of accepted practices,in other countries which do not use their price indices in the same way as we do is not relevant.” He said he did not at any time question the accuracy of the work done by the Government Statistician, or of the revised index as such.