PRICE CONTROL BILL

Press, Volume LXXXIII, Issue 25299, 26 September 1947, Page 8

PRICE CONTROL BILL

Opposition Attacks Permanency DEBATE IN HOUSE OPENED (From Our Parliamentary Reporter.) WELLINGTON, September 25. Strong criticism of the Control of Prices Bill was expressed by Opposition speakers in the second reading debate in the House of Representatives this evening. The attack was led by the Leader of the Opposition (Mr S. G. Holland) and carried further by Mr J. T. Watts (Opposition, St. Albans). Mr A. H. Nordmeyer, Minister in charge of the bill, opened the debate, and other Government spokesmen were the Minister of Finance (Mr W. Nash) and Dr. A. M. Finlay (Government, North Shore).

Mr Holland claimed that the legislation was aimed at every small shopkeeper, and gave the impression that the Government regarded every such shopkeeper as dishonest. Mr Watts said the people had tolerated regulations during the war, but this new legislation was now foisted on the community as a permanent part of the commercial structure. The Government ■was not legislating for plenty of goods but for a scarcity. Mr Nash said Mr Holland had spoken for 50 minutes without once mentioning the people most affected—the consumers. Moving the second reading, Mr Nordmeyer said there was nothing new about price control in New Zealand, the first legislation in that field having been introduced in 1915. The value of the present tribunal and the regulations was shown by the fact that after the Second World War prices did not rise to any extent comparable ■with increases after the First World War. Guiding Principle Mr Nordmeyer said that when the Price Tribunal was set up his predecessor (Mr D. G. Sullivan) had laid down as guiding principles that replacement costs should not be accepted as a basis for fixing prices, that prices should be increased only on a unit basis, according to costs, and not on a percentage basis and that the accounts of applicants for increases in prices should be produced to the tribunal in support of any applications. The cost of living in New Zealand increased to a lesser extent during the •war than in any other country of the Empire. Price control also had been helped by the Government’s stabilisation policy and no one had benefited more in the long run than the primary producers. At this point the Minister was interrupted by Opposition cries of protest Mr Nordmeyer said the provision in the bill against profiteering was almost identical with the one contained in the Board of Trade Act, 1921. It was now provided that it would be no defence against a charge of profiteering that the replacement cost of certain goods would be much higher than their actual cost to the person offering them for sale. The clause aimed at black marketing offences was also based on the Board of Trade Act. It was an offence to offer certain goods for sale on condition that other goods were bought with them. This would not prevent retailers from ensuring that goods in short supply were fairly distributed among their customers. The Minister said the bill provided for a reasonable profit to manufacturer, wholesaler, and retailer while ensuring that prices charged to the public would be fair. “Softening-up Process” • Mr Holland said the bill was another example of the Government making a temporary war-time provision into a permanent part of New Zealand’s economy. It was one more step towards the socialisation of the means of production, distribution, and exchange. It was an example of the war being used to introduce a measure as a kind of softening-up process. As the Government was perhaps the largest trader in the country to-day, why should not the State be bound by the provisions of the bill? asked Mr Holland. The Minister could not deny he was one of the chief architects of the Government’s socialisation policy and one of the main enemies of private enterprise. When the Minister held another portfolio he socialised doctors, chemists, private and maternity hospitals, and dentists to a limited but growing extent. The Minister was transferred when that part of his task was complete. The Government realised that the people of the country were not quite ready for State ownership, and it was going as far as it could to secure State control first. The bill was part of a long-range plan designed to place trade in an economic straitjacket. Mr Holland said some control was necessary because of the financial policy of the Government, which was deliberate and planned inflation. The bill had one great deliberate deficiency: ho provision was made for the examination or treatment of causes which made control a necessary evil. The real need to-day was for free competitive enterprise, which would give an abundance of goods at reasonable prices. There was no justification for a permanent price control structure.

.The bill was aimed less at limiting prices than at limiting profits. The Government seemed determined to keep dividends down and so force small investors out of the investment field, compelling them to become dependent, through social security bene-, fits, upon the State. Basis of Price Fixing

The bill provided no stable basis for price fixation. Were prices to be fixed on the costs of the least efficient manufacturers or of the most efficient? The bill, while providing that no one should obtain more than a fair profit, did not guarantee that no manufacturer would enjoy less than a fair profit. Mr Holland claimed that the tribunal was subject to Ministerial dictatorship. Appointments to the tribunal should be entirely outside political control. Mr Nash said no honest trader had anything to fear from any power in the bill. All the advocacy of the Leader of the Opposition had been to protect the profitmaker and exploiter. It was inevitable that on a sellers’ market there had to be control of prices to

protect the consumer. If freedom of supply and demand was the test, then nothing was more inevitable than that before 1951 New Zealand would be in the same position as it was in 1931, and if prices were allowed to go to uncontrolled levels, then nemesis would follow in the fall of prices and wages.

Mr Watts said that the bill showed that the Government would not trust the people of the country. The Opposition agreed that with inflation some control of prices was necessary. The Opposition would support any measure that prevented black marketing and profiteering. The main objections to the bill were that it sought to make price control a permanent part of New Zealand’s economy as long as a Labour Government was in power. “Help to Capitalism”

Dr. Finlay denied that the bill introduced Socialism by the back door. It was not designed to seduce the present society but rather to help—in fact to enable—capitalism to operate in present world conditions. Otherwise capitalism would crash. Mr Holland had tried to scare shopkeepers by declaring the bill made them all potential rogues, but criminal law made every person a potential murderer. Dr. Finlay said that some luxury industries paid wages which were so high that essential industries could not compete for labour. This might be remedied by a differential profits tax, either making concessions to the desirable industries or increasing the rate of taxation on luxury industries. This would avoid the necessity for the direction of manpower. In present conditions Labour should be prepared to accept the conception of differential wage rates between essential and luxury industries, but if there were a ceiling on workers’ wages there was every reason to impose an equally stringent ceiling on profits.