N.Z. Manufacturers’ President Back From U.K.

Press, Volume CII, Issue 30155, 12 June 1963, Page 17

N.Z. Manufacturers’ President Back From U.K.

New Zealand’s economy was relatively sound, and he .could see no reason why the country’s manufacturing industries should not continue to develop, said the president of the New Zealand Manufacturers’ Federation (Mr R. H. Stewart) when he returned to Christchurch last evening after a seven weeks’ business visit to the United Kingdom and Australia.

‘‘A ring of new power stations, most of them nuclear, has provided an impetus to British industry. The car, electrical, and heavy engineering industries are booming.

“As far as I could make out, the E.E.C. and negotiations are a dead duck to industrialists in Britain. They are too busy to think about it,” said Mr Stewart. There was some unemployment north of Newcastle and in parts of Scotland, but the Government and local authorities were providing incentives to industries to open works in these areas by way of reduced taxation, cheap power, and low interest rates on finance for acquiring sites and erecting buildings. In addition, workers were moving to areas where industries were expanding.

• The taxation scheme whereby the rapid depreciation of industrial plant was recognised had played a considerable part in the industrial boom, said Mr Stewart. “Because of advances and changes in technique, plant becomes obsolete much more quickly now. If an industrialist in Britain buys machine tools, for instance, for £lOOO, he is immediately entitled to put 20 per cent, of that amount in an investment replacement fund which is not taxed. This is an allowance for the increasing costs of replacing plant that manufacurers have not got here."

Mr Stewart travelled 2000 miles by road in Britain, and visited 18 factories.

An electrical equipment and plastics manufacturer. Mr Stewart said the plastics industry in Britain was doing very well. The industry was making capital equipment and machine tools for sale

throughout the world. The New Zealand plastics industry. which closely followed that of Britain, was also doing very well and producing goods of comparable quality. The Australian economy was recovering from the recession of two years ago a| a rate many businessmen there felt was far too slow, Mr Stewart commented. The plastics industry was certainly not producing at its full capacity because of a slowing in demand. "There is a tremendous competitive spirit in selling to the consumer. Some of the ‘give-away’ incentives under hire-purchase with no deposit are fantastic. For example, the purchaser of a 23in television set can get a trade-in price of £l5O on his old set plus a free refrigerator.

“These inducements to buy and difficulty in selling output have meant a substantial reduction in retail prices of most goods. New cars are lined up by the dozens for sale, from the United States and other overseas countries.” Future in New Zealand

Mr Stewart said that the New Zealand Government's policy in reducing demands on overseas funds by its “steady-does-it” policy had placed the national economy on a very sound basis. “I can see no reason for any recssion at all in New Zealand.” he said. “It has always been my opinion that for every £lm spent on making a power station another £lm must be spent on reticulating that power to where it is wanted. "The economy in New Zealand is based on cheap power, as it is in Britain, as

far as manufacturing Indus* tries are concerned. “With Benmoee on the way. other power stations on the Waitaki planned, and the Manapouri-Te Anau scheme in the offing, I can see nothing but a prosperous future tor the electrical, heavy engineering, machine tools, light engineering, electrical appliances, and all the other associated industries in New Zealand.

“I can also see an increasingly prosperous future for a great many manufacturing and processing industries in exports from this country based on the expanding population, which wall bring a larger domestic market, bigger turnover, and consequently prices, based on marginal costing, that compete with those of products from overseas countries,” Mr Stewart said.