Interesting call this morning from the Head of the New Zealand Maori Council - who wants a price freeze on essential grocery items.
His name’s Matthew Tukaki - and by essential items he’s talking about the likes of milk, flour, personal health products, sanitary items…those sorts of things.
This is on the back of the latest inflation figure that came out last week. 5.9 percent - the highest it’s been since 1990. So the highest in 30-odd years.
The idea of a price freeze is nothing new here in New Zealand. We’ve had wage and price freezes haven’t we? Both at the same time.   
That was Sir Robert Muldoon’s answer to rising inflation - and it lasted from 1982 until 1984…by that time voters had had enough and voted National out and Labour in. Which was the start of a whole new chapter, wasn’t it?
But back to today’s matter of this proposed price freeze. Which, by the way, I don’t think is the answer…but, I tell you what, something has to happen because the cost of living here in New Zealand is just getting ridiculous.  
Listening to Matthew Tukaki on the radio this morning, I thought his argument for a price freeze went a bit haywire when he started talking about the supermarkets here in New Zealand needing more competition to bring prices down.
I say “haywire”, because that’s not something that’s going to happen in the next five minutes is it? And so it’s not going to be anywhere near a quick-fix for the current problem of life in this country just getting more and more expensive. 
So a price freeze could seem like the quickest and easiest thing to do. But how do you decide what’s essential - and, therefore, would be part of the price freeze - and what isn’t essential?
And what would that mean for the producers of these products? Who, remember, are facing rising costs too. That’s why their prices have been going up. They’re not charities.
So the other option that’s been put up in the past, to try and keep price rises down, is to take the GST off “essential” items. But when you do the numbers - the GST part of grocery items is peanuts really and I don’t see that making too much of a difference. 
Granted, when you add everything up - it would make some difference at the check-out for you and me. But I think, overall, the impact would be negative because of the reduced GST-take for the Government.
We keep on wanting more ICU beds and more mental health services and all that, don’t we? So why would we want to reduce the Government’s income by getting rid of the GST? That’d be a dumb idea - as far as I’m concerned.
I know the current government gave some thought to setting up its own supermarket chain - which it ditched pretty quickly. But I think they need to have another look at that.
After all, what’s the difference between a state-owned bank - Kiwibank - and a state-owned supermarket? They could call it Kiwimart.
But again - that’d take a while to set-up. 
So if we want something relatively quick, that wouldn’t reduce the Government’s revenue like a GST cut would, and which would deliver more longer-term benefits than a six month price freeze - what about the Government taking over responsibility for purchasing what it deems to be essential items from the producers of these products, and supplying them to the supermarkets itself?
This is how I’d see it working. The Government wouldn’t do all the transporting and logistics, but it would identify the essential items and take over responsibility for negotiating prices with suppliers of these products. It would then tell the supermarkets what the retail price is. Not a recommended retail price. A mandated retail price. And the supermarkets would have no option but to do it.
Because, let’s face it, we don’t have a hope in hell of reducing prices if we leave it to the supermarkets themselves do we? And I know the Commerce Commission and the Government have been making all sorts of noises about...

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