XN000022-1981-07-30 — Page 3

THURSDAY, JULY 30, 1981

+THIS SEEMS TO ME NOT A TOTALLY UNSATISFACTORY POSITION IN WHICH TO FIND OURSELVES IN VIEW OF THE VERY UNFAVOURABLE ECONOMIC CONDITIONS PREVAILING IN OUR MAJOR EXPORT MARKETS WORST SINCE THE WORLD RECESSION OF 1931.+

HE SAID THE FACT THAT THE RATE OF INCREASE OF CONSUMER PRICES WAS SIGNIFICANTLY FASTER THAN THAT OF THE GDP DEFLATOR WAS AN INDICATION THAT THE INFLATIONARY PRESSURES WE WERE EXPERIENCING WERE LARGELY IMPORTED.

THE

IN THE PAST TWO AND A HALF YEARS, OVER HALF OF THE INCREASE IN CONSUMER PRICES WAS ATTRIBUTABLE TO INCREASES IN THE PRICE OF FOOD, ANOTHER 12 PER CENT AND 8 PER CENT RESPECTIVELY IS ATTRIBUTABLE TO INCREASES IN THE PRICE OF +FUEL AND LIGHT+ AND +TRANSPORT AND VEHICLES+.

+SO ABOUT 70 PER CENT OF THE INCREASE IN CONSUMER PRICES DURING THE PAST TWO AND A HALF YEARS IS ATTRIBUTABLE TO

INCREASES IN THE PRICES OF THOSE CONSUMER ITEMS WHICH ARE HEAVILY INFLUENCED BY IMPORT PRICES,+ MR BREMRIDGE SAID.

+ IMPORT PRICES OF FOOD IN THE FIRST HALF OF 1981 WERE 16 PER CENT HIGHER THAN IN THE FIRST HALF OF 1980. IMPORT PRICES OF FUEL WERE 39 PER CENT HIGHER.+

THE FINANCIAL SECRETARY ALSO POINTED OUT THAT IN OUR FREE ECONOMY BASED ON MARKET PLACE DISCIPLINE AND WITHOUT EXCHANGE CONTROLS THERE WAS LITTLE THAT THE GOVERNMENT COULD DO TO CURB SUCH INFLATIONARY PRESSURES WITHOUT RESORTING TO THE BLUNT INSTRUMENT OF INTEREST RATE INCREASES.

+WE MUST BE VERY CAREFUL TO ENSURE THAT THE CURE IS NOT WORSE THAN THE DISEASE.

+I WILL NOT PUT FORWARD MEASURES TO AMELIORATE IMPORTED INFLATION WHICH WILL ALSO HAVE THE EFFECT OF SIGNIFICANTLY INCREASING UNEMPLOYMENT. AND ONE MUST REALISE THE BURDEN THAT HIGH INTEREST RATES PRESENT TO MANY SECTORS OF OUR COMMUNITY, +

MR BREMRIDGE STRESSED THAT IN NO CIRCUMSTANCES DID THE GOVERNMENT INTEND TO INTERVENE INTEMPERATELY AND IN A WAY THAT WOULD RADICALLY CHANGE THOSE POLICIES OF PRUDENT FREEDOM THAT HAD SERVED US SO WELL.

+BUT WE SHALL DO WHAT WE CAN TO HELP THE COMMUNITY AS A WHOLE, HE ADDED.

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