The Press WEDNESDAY, MAY 31, 1967. Unbalanced Industry

Press, Volume CVII, Issue 31383, 31 May 1967, Page 14

The Press WEDNESDAY, MAY 31, 1967. Unbalanced Industry

The Canterbury Manufacturers* Association should keep pressing the Government for measures to redress the unbalanced distribution of industry between the North Island and the South. The association presented the Government with strong arguments in 1965 to support cheaper railway, ship, and air freights from the South Island. Last September a survey by the Department of Industries and Commerce confirmed that, because of their higher transport costs, South Island manufacturers are at a distinct disadvantage in the national market for their goods. The Government has now refused to subsidise the cost of freight for north-bound goods. In better times, when it may be possible to convince the Government of the economic folly of allowing industrial expansion to snowball in the north of the North Island, the Government may change its mind. This is a problem involving the national rather than the local interest. While the ever-rising demand for electricity has to be met by transmitting it from the bottom of the South Island to the top of the North Island, the capital cost of electricity to all users will be unnecessarily high. If freight costs were an inconsiderable part of total manufacturing costs the association’s arguments would carry less weight. The freight content of the cost of goods supplied to the national market is in fact high enough to set the South Island at a telling disadvantage. Smoothing out the disparities in transport costs is certainly but one of the measures that might be taken to encourage a better distribution of industry; but that was not a good reason for the Government’s rejecting this step out of hand. A “piecemeal” approach, as the Minister of Industries and Commerce (Mr Marshall) has described it, would have been better than doing nothing to correct a maldistribution of industry that must put the nation’s resources under increasing strain. The association should carry on its efforts. It should be assured of wide support.