"Serious Erosion Of Capital" Deplored

Press, Volume CI, Issue 29798, 14 April 1962, Page 13

"Serious Erosion Of Capital" Deplored

“ ‘Profit’ in our language seems to have become a dirty word. In fact we have built up in Mew Zealand a small army of people whose job it is to think of ways to take from business more and more of its profits. Tne result of their labours has been serious erosion of capital.” Mr S. L Moses, president of the Associated Chambers of Commerce, said this in his address to the association’s annual conference yesterday. ’One of the fundamental weaknesses of New Zealand’s economy has been a shortage of labour and capital.” Mr Moses said. "The Government has taken some action to remedy the latter defect by making New Zealand a member of the International Monetary Fund and World Bank. This action, however, does not remove the need to encourage private overseas interests to invest capital in New Zealand. The Government must provide incentives and see that the economic ciimate is such that overseas firms and individuals will find it profitable to invest their capital. Above all. we must not overlook the necessity to help ourselves. Savings must be encouraged to a greater extent, again by providing incentives. The weakness of the present position is that the Government takes for itself too large a share of company profits. If one concedes the equity of dividend tax that presupposes a reel action in income tax. Tn is matter should be dealt with promptly by the Government.’ said Mr Moses. "For some years we have lived with large overemployment. I doubt if it is recognised what a depressing effect this has on efforts to increase production. I wonder if it is generally known also that New Zealand’s rate of increase in production is one of the world’s lowest; and probably the lowest in the Western world.” said Mr Moses.

"It is an unpalatable fact that, except perhaps for Rugby. New Zealand has become a paradise of mediocrity. Our whole system is wasteful of real ability, both in private industry and public administration. "All these factors, including the shortage of capital.

add up to the reason for the poor rate of increase in productivity, for our high internal costs which threaten to price us out of world markets, and for our feeble efforts to sell a wider range of exports on a wider range of overseas markets.” Mr Moses said that labour must adopt an enlightened policy of encouraging workers to reach higher standards of skill and output, and management must better its own techniques.