WAR ON BUSINESS

Bay of Plenty Beacon, Volume 4, Issue 302, 7 May 1941, Page 2

WAR ON BUSINESS

NEW ZEALAND POLICY AN AUSTRALIAN" ANALYSIS The crux of the. whole problem of war economics in New Zealand lies in. the conflict now developing within the Government's own. plans for economic insulation, and social security, as. aggravated, by wartime' difficulties. —"Jobson's Investment Digest" Sydney Reviewing the Dominion's business position prior tci the bringing down of the second wartime Buc'iget the "Digest" differentiates between conditions, in. Australia and New Zealand: at the outbreak of war. In. New Zealand, it is pointed out, the Government already had* assumed "a control over industry much greater than any supervision ever attempted in Australia, save in time of war." What the New Zealand Government had to do Ava.s not to ercet new controls but to plan Avays and means of adjusting existing controls to wartime conditions and of "extending it:; control over parts of industry hitherto- left to their own devices." Therefore only a few modifications were necessary in the New Zealand economy. Price-fixing, State marketing, import selection, involved a type of control very similar to that which conditions of total war demandied. All that' was necessary when war broke out Avas to strengthen the existing regulations, none of whiali involved vital changes: of policy. Fcav changes in business Avere seen during the first year of the Avar; but noAv. as the "Digest" sees them, "far-renching changes are being increasingly demanded. The stage AA*hen a mere tightening up of Government control was all that A\ r as necessary is past). Signs of strain are: apparent." Import restrictions and the augmentation of ne/t overseas funds are' reviewed/ and the conclusion' is reachedi that "expansion of heavv industrial plant has been limited," although light, industries have expanded. Predominant commercial opinion is quoted to show thait taxation in New Zealand is excessive, for on the authority of the retiring president of the Auckland, Chamber of Commerce, Mr N. B. Spencer, it had increased from £12 8s per head in 192/5-26 to £36 13s 4d per head at present,, and, of that £36 13s 4d only approximately £9 6s Bdl Avas for AA r ar purposes', the remainder being for public AA r orks and social services. The "Digest" remarks that the chief obstacle: tc a change in policy lies in. the commitments of the Labour Party to its own supporters; and the reluctance to sacrifice its social ideals in the service of Mars. Where possible the Government will provide both "guns: and butter." "But can New Zealand, afford both ?" The; conflict is described as partly inherent in a defect of policy—"a faulty adjustment between import restrictions designed to encourage loeali industries and high taxation intended: to. pay the price of social amelioration." Refeire-nce is ma die to a check in the giroAVth of local industries imposed by the. development of buildling up London funds and at the same time expandr ing local industries. Manufacturers haA r e been complaining, even from since before the war of difficulties' in obtaining necessary materials and equipment from pverseas;, Th? Avar has increased those difficulties. "The choice Avhich lies before the New Zealand Government is gradually becoming clearer," remarks the journal. "It will be to decide; Avhether or not the Dominion resources of labour and materials are sufficient to continue ambitious social policies, which have outgrown their true proportion to> the Government's industrial plans, and at the same time put the country on a footing for total Avar."