The Wanganui Chronicle. TUESDAY, FEBRUARY 14, 1939. A STUDY OF PRICES

Wanganui Chronicle, Volume 83, Issue 37, 14 February 1939, Page 6

The Wanganui Chronicle. TUESDAY, FEBRUARY 14, 1939. A STUDY OF PRICES

r y’HE Minister o£ industries and Commerce lias released a statement intended to counter the suggestion that prices are bound Io rise in the future in New Zealand. The Ministerial statement, however, instead of dealing with the probable trend of prices in the future, deals only with the trend of prices in the past, and even then the statement provides a misleading piet ure. in his statement Mr. tSullivyn says that "The December issue of the Abstract of Statistics showed a drop of 10 per cent, in the grocery group index number from November, 1937 io 1938.” This is true, but it is an inappropriate statement, of the position. The retail index for the. three food groups made a sudden jump forward in November, 1937. “This movement is almost entirely due to the influence of the groceries group, the index lor wliieh advanced iron) 929 Io 1013, mainly owing to higher prices for new season’s potatoes,” stated the Governnient Statistician. Mr. Sullivan is therefore making use of a seasonal influence in 1937 to draw comparison with the present situation. To show tile movement In the grocery index the following table is provided:— Group I.—Groceries. November, 1936 Index No. 904 November, 1937 Index No. 1013 November. 1938 index No. 911 When the movement of the index is put in proper perspective it would appear that it was the elimination of a seasonal or crop influence which Mr. Sullivan would indicate to be a gain. When the all-groups index is considered, however, it is found that retail prices have actually gone up during the period reviewed by the Minister. This can best. be. expressed by stating the percentage of increase over July, 1914: Combined Index of Retail Prices. November, 1935 36.1% above 1911 1936 40.6% 1937 50.8% „ 1938 ■ 51.4% ~ The advance in retail prices as a whole, therefore, has been no less than 15.3 per cent, since 1935. There arc good reasons, however, for expecting that prices will advance still further. First and foremost, the cost of railway transportation has gone up by 10 per cent, on the order of Mr. Sullivan himself. Second, the influence which has operated to keep prices down lias been the stability of imported goods, the index for which stood at 1420 in January last and at 1422 in November, causing locally-made goods to decline in price from .1682 in November, 1937, to 159.8 last November. With a reduction in the quantity of imported goods prices will rise to more remunerative levels than have existed for some months past, for Dominion manufactures, and their additional transportation costs will be able to be passed on to the public. The cost of living is certainly going upwards and onwards.