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Do You Plan Another Price Freeze, Jenny

"Jenny Shipley is right that food prices have risen in the last eighteen months. She is less forthcoming on why, and on what can be done about it," Finance Minister Michael Cullen said today.

"She is also using a wonky measure. Eating habits and food product lines have changed significantly in the 17-odd years since Ann Hercus produced her famous Shopping Basket.

"Yet Mrs Shipley continues to use the same 42 items. She does this although every time she does, it has been pointed out to her that her figures are wildly unrepresentative.

"The same applies this time. She finds food prices have increased by 25.3 percent since the Government took office.

"The official index over the same period - November 1999 to last month - produces a figure of 6.3 percent.

"And a lot of that increase was down to fruit and vegetables. Would Mrs Shipley outlaw bad weather, or would she want the Reserve Bank to ratchet up interest rates to control against the price effects of a poor growing season?

"The main drivers behind the increase in grocery prices have been the lower dollar and higher petrol prices. Both of these factors were driven in their turn by external influences beyond the Government's control," Dr Cullen said.

"Would Mrs Shipley retreat to the "solution" advanced by Sir Robert Muldoon and impose a wage-price freeze? And, if she did, what would happen to foreign investor confidence?

"Mrs Shipley's poll ratings would be higher if, when she had nothing constructive or credible to say, she said nothing."

Ends

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