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Rising costs for industry continue



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RISING COSTS FOR INDUSTRY CONTINUE

The Opposition Leader, Mr Andrew Peacock, said today it was imperative for the Government to immediately announce its support for discounting wages for tho impact of the dollar devaluation.

"Today's figures for prices of materials used in manufacturing industry show that the impact of the dollar devaluation was flowing through rapidly to goods used in industry," he said. „

"Prices of imported goods used in our manufacturing industries rose by 4.5 per cent in March compared with 2.3 per cent in February and only 0.2 per cent in March last year.

"The prices of imported goods used in industry are now running 12.1 per cent ahead of what they were a year ago and the trend is upwards," he said.

Mr Peacock was commenting on the latest figures for costs of „ raw materials used by manufacturing industry issued by the . Statistics Bureau this morning.

He said the cost of home produced materials was also rising with an increase of 1.6 per cent in March compared with 1.3 per cent in February and 0.4 per cent in March last year.

"The higher cost of raw materials is adding directly to the costs of industry and will ultimately flow through to both wholesale and retail prices," he said.

"Figures due out shortly for prices of goods produced by manufacturing industry are also sure to show this upward trend in overall costs."

Mr Peacock said although the increase in costs to manufacturers was important - particularly with increased wage costs as well - the real danger was further down the track.

"With prices within manufacturing industry increasing at the present rate, it will not be too long before they begin to have a marked impact on the overall consumer price index," he said.

"And, ultimately, that will mean a substantial increase in wages under the Government's misguided across-the-board wage indexation system.

"The Government has bowed to Trades Union officials too long on the issue of discounting wages for the price impact of the dollar devaluation.

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"To help avoid even greater concern about the likely inflationary impact of the dollar devaluation on prices and wages, the Government should immediately announce that it will discount future wage rises for the depreciation effect.”

Mr Peacock said that it was no good the Government saying that it will put off a decision on the issue until the Arbitration Commission was due to consider the next national wage rise.

"If there is one thing that can be worse than a decision­ making in this important economic area, it is prolonged uncertainty about what a decision might be," he said.

"The Government should state now - and state strongly - that it will support discounting of future wage rises for the effect of the dollar devaluation on the consumer price index."

11 JUNE 1985