FIXING COSTS AND WAGES

Dominion, Volume 36, Issue 34, 4 November 1942, Page 4

FIXING COSTS AND WAGES

Government’s Intention FULLER POLICY OF STABILIZATION (By Telegraph.—Press Association.) CHRISTCHURCH, November 3. A more complete stabilization policy in New Zealand was foreshadowed by the Minister of Supply, Mr. Sullivan, in opening the conference of the New Zealand Manufacturers’ Federation today. The Government had done much to bring about economic stability, since the conference in 1940, said Mr. Sullivan. The elements of the inflation story were familiar enough today, he said. 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 consumer goods was decreased, the became more difficult to bridge. Price control was the cardinal point of the stabilization scheme, and it was a corollary of fixing prices that incomes and costs had to be fixed as well.

With the stabilization of incomes jutmy people would agree, provided they got a little more first, said. Mt. Sullivan, and it was this attitude which tended to be one of the biggest obstacles in effecting the stabilization policy. . , , , “We are now at the point when, in bringing in an all-round policy of stabilization, which, I repeat, is absolutely vital today, the stabilization of income cannot be balked by demands for concessions from any classes of the community,” said Mr. Sullivan. “To peg everybody’s income where it ,is might crystallize certain inequalities for the time being, -but I would point out that if inflation were 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 stabilization brings about the fixing of wages or farm prices at their present levels, sojne sections of the community may feel that they are being made to contribute more toward stabilization 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, Mr. Sullivan said, the Government had relied on 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 administration in New Zealand had controlled prices more effectively than any other price administration in any 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 beitoen. “A considerable amount of work is being done at present to perfect ths mechanism to bring this about,” Mr, Sullivan added’. “The Economic Stabilization Committee has been devoting a good deal of time lately to consider all the aspects of stabilization and in formulating proposals for general stabilization, 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 essential commodities bo available before any less essential lines were put on the market. The Government had received co-opera-tion from the manufacturers in the negotiations toward bringing about these results, and in any future measures needed for the adjustment of production “to ameliorate 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.