PROTECTION OF N.Z. INDUSTRY

Press, Volume LXXXIX, Issue 27132, 31 August 1953, Page 11

PROTECTION OF N.Z. INDUSTRY

EFFECT ON STANDARD OF LIVING DEMANDS FOR CAPITAL « TOO HIGH ” “Socially wasteful” investment in manufacturing industries in New Zealand was condemned by the Professor of Economics at Auckland University College (Professor C. G. F. Simkin) in a paper read at the conference on capital development on Saturday. “Investment which is associated with a less effective use of resources does not mean progress, and so far from demanding sacrifice ought, if we are sensible, to be discouraged,’’ said Professor Simkin. “But, has not a good deal of our commercial investment over the last 15 years been of this socially disadvantageous nature? “Have we not handicapped our export industries during a secular boom in primary products so as to build up manufacturing industries which can survive only behind the impregnable barrier of. import or exchange* controls?l Have we not, that is, indulged in much investment which has done harm both to our standard of living and to the balance of payments? “I should say that we have been doing just that, and, thanks to import and exchange controls demands are still too high for socially wasteful investment in manufacturing. Much as I regret the necessity, and much as I dislike controls, I am reluctantly obliged to concede that there is a case for the Capital Issues Committee. “The main beneficiary of its activities seems to be government investment, and it is at least a moot point whether this deserves the priority it receives,*’ said Professor Simkin.