Effect Of Economic Ills On N.Z. Manufacturers

Press, Volume XCII, Issue 27764, 15 September 1955, Page 9

Effect Of Economic Ills On N.Z. Manufacturers

(New Zealand Press Association)

WELLINGTON, September 14. The problems affecting manufacturers, and stemming from the creation of credit at too fast a rate, were enumerated by the Minister of Industies and Commerce (Mr D. J. Eyre) when he opened the annual conference of the New Zealand Manufacturers’ Federation today. ‘“Hie first problem is that purchasing power presses on resources of land, material, and manpower, and so drives up their prices,” said Mr Eyre. “The second is that gradually rising prices affect people's disposition to save—if prices are rising, people tend to spend more, and save less.

“The third factor is the using up of foreign exchange to pay for increased imports,” said the Minister. Expenditure of more money abroad than the country earned, as had occurred in 1954 and 1955, simply could not go on, he said. Credit restraint was a major element of the national economy, and was aimed at greater stability and conserving foreign exchange. “Manufacturers.” Mr Eyre said, “must realise New Zealand is a whole economy, not just a tightly-closed cell for one section to absorb money, materials, and labour to its own advantage. Recent statements attributed to some representatives of manufacturers did not indicate a breadth of thought and vision, with all our problems in true perspective.” More Careful Buying

Mr Eyre said the Government’s policy had been directed to putting health into the economic machine, and letting each man—manufacturer, importer. or distributor —become keener to contribute according to his function. Wholesalers and warehousemen must now study the type and size of the stocks they must carry. This would entail more careful buying and better selling and service.

“I do not want to suggest that there is any recession in business, but that the only reason why business has been carried on at such a high level during the last 18 months or so has been the existence of overseas funds which, once spent, cannot be spent a second time,” said the Minister. In capital development, he said, re-

sources must be shared out so that essential things came first—a situation that had not applied in the last few years. Every manufacturer, distributor, and consumer was paying for the slowing up of basic essential operations.

The Government had had to hold up essential works, said Mr Eyre. Rapid decisions now had to be taken on what the essential things were. The Government had already done that, and had pruned very heavily its activities. What was now needed was similar activity in private business. “I regard the present credit restraint as almost an essential prerequisite to the leap forward that industry must take in the next 10 years,” said Mr Eyre. “It is a habit common to all of us to think somewhat optimistically that we will get perhaps a larger share than the next man of the future market. We should take a second look at this, and the present credit restriction may assist us to take this look.” Understanding Among Industries

The Minister said farmers and manufacturers should find more in common. Much had been done toward that end, but there was still room for more sincere understsanding by both sections. In finance, New Zealanders had been well served by the banking system, but he felt the time had come where improvements could be made, particularly for developing industry, said the Minister. Mechanisation was as much available to New Zealand as to any other country. Given the same opportunities, the Dominion could produce the same quality of management as Britain. The same applied to industrial skill.

Mr Eyre said he did not agree that, because New Zealand was a small country it- could not expect achievement too quickly. But it could not for ever draw on the rest of the world for ideas, and copy what had been done abroad. What was to stop New Zealand from becoming a leader in design? “Manufacturers should develop a great deal of their thinking to the national position—in education, in the rewards for scientists, technicians, and professional men, and in the public attitude toward trained men,” he said. “It is in this field that our weaknesses may lie.’’