Polye urges businesses to be fair

Source: Post Courier, Wednesday November 02, 2011

WHILE the appreciation of the Kina against both the US dollar and the Australian dollar is expected to bring down the price of imported goods, this does not seem to be the case.

Minister for Finance and Treasury, Don Polye (pictured) said in a statement last night that the kina has appreciated against the US dollar by around 19 per cent since the start of the year and has also appreciated by 17 per cent against the Australian dollar.

He said the Government was committed to bringing down the rate of inflation to acceptable levels, such as five per cent. Mr Polye said the Consumer Price Index (CPI) published by National Statistical Office showed a 12 month increase of 8.4 per cent at the end of September, which was a slight improvement from the 9.6 per cent recorded in the June quarter 2011. “This appreciation means that the cost of goods from overseas would generally be cheaper. However, it is not clear that these lower Kina prices have been passed onto consumers,” Mr Polye said.

“I urge all other business houses to pass on lower prices from the kina appreciation to consumers too, instead of solely maximising profits,” he said.

Mr Polye commended Trukai Industries who slashed the prices of its products by almost 18 per cent, which sees a 10kg Trukai rice selling at K37.50 in Port Moresby down from a price of around K46 previously.

“This shows the power of appreciation. Other businesses who import key items should also ensure that the benefits of the appreciation are shared with consumers and other business,” Mr Polye said.

“Of course some international prices have risen even faster than the appreciation, such as the oil price in recent months, and this may fully offset the Kina appreciation,” he said in the statement, adding that such cases, price reductions are not expected.

“Generally, international price rises including food have been moderating, and many imported products should be falling in price because of the appreciation,” he said.