The Press MONDAY, NOVEMBER 13, 1961. Inquiry Into Cotton Mill Still Needed

Press, Volume C, Issue 29669, 13 November 1961, Page 12

The Press MONDAY, NOVEMBER 13, 1961. Inquiry Into Cotton Mill Still Needed

The Parliamentary debate on the Nelson cotton mill and the Government’s invitation to the directors of the Commonwealth Fabric Corporation to visit New Zealand have not answered legitimate criticism of the project If the Government wishes to still this criticism and believes it can do so, the best course now would be to appoint a Royal Commission. Then it would be possible to establish whether the Government had acted both properly and prudently. A public inquiry would also protect the interests of both the previous Government (which originally made the agreement) and the company. The directors could give their opinions and their understanding of the agreement to an impartial authority and not privately to the Government If the terms are to be revised, as the Minister of Industries and Commerce (Mr Marshall) seems to imply, let it be done openly. A public inquiry would give an opportunity to opponents of the mill to answer the unjustified Labour accusation that they represent “ vested interests", who would make “less profit” on selling cottons made in New Zealand. The accusation is manifestly absurd when made against such organisations as Federated Farmers. Nor has “The “ Press ”, one of the earliest and strongest opponents of the mill, any ulterior motive. We have no experience of any attempt by sectional interests “ to whip “ up public opinion ”, as Mr A. H. Giles alleges. Such information as we could gather about the project was not easily obtained. Opposition speakers in Parliament were at pains to defend their agreement as nothing out of the ordinary. If so, a further inquiry into other agreements made by the Labour Party in office may be desirable. Some of the provisions in the cotton mill agreement are remarkable. The mill, for instance, is to have the

protection of both tariff and import control (in spite of New Zealand’s obligations under the General Agreement on Tariffs and Trade); the agreement is to continue indefinitely; and the mill is to have “the first opportunity” of undertaking any development in the cotton industry beyond the products listed. The last item makes nonsense of Mr Nordmeyer’s statement that the agreement limits the mill’s share of the New Zealand market But perhaps the most remarkable feature of all is the clause on prices. If Mr Marshall is to be believed, this means something quite different from the plain meaning of the words. He is reported to have said that prices “ must “not exceed the fair aver- “ age prevailing prices of “ imported articles ”, and that if the mill charged more it would not be entitled to protection. “If “that means what it says “it provides reasonable “ protection for the con- “ sumer ”, Mr Marshall added. But that is not what the agreement does say. Under the agreement the company undertakes no more than to “ endeavour “to sell at prices not “ higher than the prices of *' like imported articles ”. The whole point of the controversy is there. If Lancashire cannot meet the competition of friendly Asian countries (which buy New Zealand goods) how can a New Zealand mill do so when it labours under higher costs? If New Zealand needs to foster artificially more secondary industries (and ‘that has not been established), why choose one that appears uneconomic and will make heavy demands on overseas exchange for raw materials? And, above all, why choose cotton? It is a pessimistic doctrine that we cannot develop economic industries in New Zealand. If true, it condemns us to a steadily falling standard of living. Fortunately other ventures are proving it false.