More Attention To Industrial Costs In N.Z. Held Necessary

Press, Volume XCII, Issue 27735, 12 August 1955, Page 14

More Attention To Industrial Costs In N.Z. Held Necessary

-In spite of the wealth of goods Rvaildtae through industrial expansion, and the easing of import restrictions over the last few years, supply had not in many -instances caught up with demand, and inflation was still a problem, said the president of the New Zealand Institute of Cost Accountants (Mr T. I. Maxwell) in an address to the annual meeting in Christchurch. -“ln,those industries where demand has been well-nigh satisfied, manufacturers are having a greater cost consciousness,” Mr, Maxwell said. “When goods were in short supply, production could be sold with little or no worry as to cost and even the inefficient units prospered. Now, however, with the wealth of selection, bank restrictions, and a" high cost of living, production in- some industries is more difficult to dispose of and thus manufacturers and suppliers have to look to costs and their own efficiency.

“The recent Budget, in its attempt to retard-the inflationary trends, has recommended the imposition of restrictions on. hire purchase transactions. Affecting in the main luxury gOods, sales here will be only slightly affected, and it is expected that the present restrictions will do little to halt-the rise in prices. ‘New-Zealand over the last year had a £35,000,000 defleit in balance of payments. Although this may have been caused bynew marketing methods for our primary production, with resulting delay in receipts,-one cannot lose sight of the fact that loans raised on the London market brought in quite a few million by way of receipts, which has the effect of showing a better position in our balance of payments than has actually occurred. “The net result is that this country has been living beyond its means,” said Mr Maxwell. fTWth overseas reserves falling, some methods have to be adopted to restore our trade to a safe basis. “The-possibility of the ReServe Bank increasirig the ratio of trading bank deposits, to. demand liabilities to 25

per cent, must not be overlooked—it has recently been increased to 21J per cent. This can only result in a limiting of financial accommodation to trade and industry and in spite of the hard things which may be said by the business community, it is a very necessary means of arresting inflation, halting the increasing cost of living and helping us to live within our income. “The result of the tightening up of credit facilities and the direction of capital into truly essential works, for example the Auckland harbour bridge, will bring the cost accountant more into the limelight than he has been before, as industry will have to carry on within narrower limits of finance imposed by bank action and no relief in company taxation as disclosed in the recent Budget. “The marketing of our primary production is now removed from Government control and our producers have to compete on overseas markets against foreign competitors without the protection and assistance which is offered by Government regulations,” Mr Maxwell said. “As a result, although our sales are satisfactory, in the case of dairy marketing particularly, it is believed that our high internal costs place our products at a distinct disadvantage with those from overseas suppliers. That is why, I believe, the services of our members will be required to a greater extent by organisations in the primary industries.” Discussing membership of the institute, Mr Maxwell said he could not believe that 276 qualified cost accountants were sufficient for the Dominion’s needs. Only a very small percentage of those were available to fill new cost accounting positions. The council would like to see a greater number of candidates sitting the institute’s examination. Mr Maxwell said that, with eight new members since the end of the financial year, the distribution among branches was as follows: Auckland 137, ‘Wellington 84, Christchurch 27, DunQuin 17, and overseas 9.