Manufacturers Reply To Leading Article

Press, Volume CIII, Issue 30570, 13 October 1964, Page 18

Manufacturers Reply To Leading Article

A statement in a leading article in “The Press” last Saturday was not only completely irresponsible, but was untrue and absolutely without foundation in fact, said the president of the New Zealand Manufacturers’ Federation (Mr S. J. Paul) in a statement presented to last evening’s council meeting of the Canterbury Manufacturers’ Association.

“To state, as The Press’ has done, that New Zealand manufacturers stand for the right to exploit the local market whatever the cost to the export industries and to consumers, is not only a completely irresponsible statement, it is untrue and absolutely without foundation in fact," said Mr Paul. “I take this opportunity to refute it.” Mr Paul said that the jibe by ‘The Press” about the socalled spate of price increases since the last general wage order was significantly inappropriate from a member of the newspaper industry, some sections of which had recently increased their price by 33 1-3 per cent, while others had increased their advertising rates. The greatest number of price increases since the wage order had not been in manufactured goods. They had been related to items such as meat, rail fares and freight charges, postage and telephone rates, and other items which increased costs to industry as well as to individuals.

Mr Paul said that industry was extremely cost-conscious, and in many industries there was strong internal competition. Manufacturers were fully aware of the need to keep costs in the export industries as low as possible. “In actual fact, over a period, prices for industrial output in New Zealand have not risen so much as prices for agricultural output,” said Mr Paul. “High world prices of primary products such as meat and wool have been important items in pushing up the consumers’ price index and therefore in increasing wages and costs.” Mr Paul said there was nothing new in the policy on protection of manufacturing industries as stated at the New Zealand Manufacturers’ Federation annual conference in Christchurch last week. “The federation’s policy which has applied for many years is that the development of manufacturing industry is essential for the economic welfare of New Zealand,” he said.

“A properly designed tariff supplemented by a flexible system of quantitative import licensing is also a necessity to achieve this object in a country such as New Zealand, where there is a high wage structure and short working hours. “This is the policy which was reaffirmed at the conference last week.” Mr Paul said that many countries used quantitative restrictions to protect some sections of their domestic production and there was no inherent difference between the protection of manufacturing industries in New Zealand and the protection of agricultural production in countries such as the United States, Canada and most of Europe. Tariff alone, he said, was not sufficiently flexible to safeguard all industries. “To illustrate this, one group of manufacturers who have no duty on their products had their case heard by the Tariff and Development Board in September, 1963. but up to the present, more than a year later, no decision has been announced,” said Mr Paul.

To continue to keep prices at the lowest possible level, he said, industries required continuity of demand based on a substantial share of the New Zealand market. This was particularly important in a relatively small market like New Zealand. “While New Zealand manufacturers do not advocate import licensing to result in a complete shut-out of imported goods, one effect of import licensing is that it helps to stabilise prices by giving local producers an assurance of a reasonable share of the domestic market,” said Mr Paul

Mr Paul said that in any case, as long as New Zealand continued to be faced with a shortage of overseas funds he saw no practical alternative to quantitative restriction of imports as a means of ensuring that the limited exchange funds were used to best advantage. Mr R. G. Pearce, the Canterbury association president, said that the letter read to the association’s meeting last night was informative as coming from the federation president in answer to some of the points raised and discussed in the leading article of “The Press” last Saturday.