PRICE CONTROL IN N.Z.

Press, Volume LXXXIV, Issue 25553, 22 July 1948, Page 3

PRICE CONTROL IN N.Z.

OPERATION DEBATED BY MANUFACTURERS « DEFINITE BIAS AGAINST INDUSTRY ” There was a definite bias against industry on the part of the Price Tribunal, probably because manufacturers comprised tight litUe groups which could be controlled, said Mr C. B. Myhre at last evening’s meeting of the council of the Canterbury Manufacturers’ Association. The council was discussing correspondence between the Minister of industries and Commerce (rar A. H. Nordmeyer) and the secretary of the New Zealand Manufacturers’ Federation (Mr D. I- Macdonald), on the operation of price control. The allowance in costs for price-fixing purposes of the special depreciation rates incorporated in the Land and Income Tax Amendment Act, 1945, was regarded as a tax concession only, the Minister wrote. The view was held by the Price Tribunal and the Price Control Division that allowance of the extra depreciation as an item of cost would have the effect of creating virtually a secret reserve out •of profits before taxation. That being so, the cost of such extra depreciation fell within the same category as provision for any other class of reserve, and must be regarded as an appropriation of profits rather than a charge against profits. Control on Profits "In addition,” continued Mr Nordmeyer, “it should be Dome in mind that the allowance or disallowance of such extra depreciation does not affect the life of any plant or machinery that may be purchased.” Mention had been made by the manufacturers’ representatives of the policy said to have been adopted by the Price Control Division of applying price control with reference to profits earned by fixing a ceiling of 5 per cent., continued Mr Nordmeyer. In arriving at a recommendation to the triburial, the division had regard to taxable and tax-paid profits earned on shareholders’ funds employed m the business in question. This criterion was never the only one employed, however, and no definite percentage scale had been adopted for various industries. There was no suggestion of breaking away from costing formulae which had been developed ever the years, but these might be subject to review and ame v.ment in the light of changing circumstances.

Manufacturers’ _ roblem Mr H. C. Urlwin said his company had asked the Price Tribunal to hear a case affecting it in puolic but tiie request had been refused. “They will only hold cases in puolic when it suits them,” he added. Manufacturers were in a (afferent category from distributive traues, said Mr Myhre. Many goods were in more than full supply. The tribunal had twisted right round from price control to profit control, said Mr T. H. Lawn. a nis was a political point of .ae Federation of Labour. It was purely a political matter, and the authorities were endeavouring to secure profit control over everything. Mr C. S. Peate asked if the Price Tribunal had power to demand to see companies’ balance-sheets. He quoted a case where a company which had made no application to the tribunal had been asked for its balancesheet

The president (Mr F. C. Penfold) said the tribunal had power to demand to inspect balance-sheets. The discussion then lapsed.