The Press WEDNESDAY, DECEMBER 29, 1965. Timber Prices And Housing Costs

Press, Volume CIV, Issue 30945, 29 December 1965, Page 10

The Press WEDNESDAY, DECEMBER 29, 1965. Timber Prices And Housing Costs

The removal of price control from timber and a range of building materials, announced before Christmas, is no less welcome for being overdue. Price control was first imposed on the timber industry in 1936 and has caused an increasing number of anomalies ever since. Not only has timber been priced artificially low—thus discouraging the development of competitive substitute products—but the relationship between prices of controlled timber and uncontrolled timber lines has been distorted. The removal of price control on many of the lines—some remain under price control—should enable these distortions to be ironed out.

As the pressure on the building industry has been reduced in recent months, the removal of price control at a time when competition among builders and among timber merchants is intensifying should not lead to widespread price increases. The president of the Timber Merchants’ Federation (Mr E. W. McKelvie) has said it is not expected that any drastic changes will be made in timber prices in the immediate future. The latest step towards restoring the price mechanism to its proper function in allocating resources should lead to a more rational forestry policy. Some of the scarcest lines of timber have been native timber; one reason for their scarcity has been the artificially low prices imposed on them. If the country’s dwindling resources of native timber are to be conserved, a considerable diversion of demand from native to exotic timber is needed. To the extent that the decontrol of prices encourages this diversion it makes for a more rational allocation of resources.