Manufacturers Defend Attitude To Competition

Press, Volume CVIII, Issue 31770, 29 August 1968, Page 1

Manufacturers Defend Attitude To Competition

(From Our Own Reporter)

WELLINGTON, August 28.

The contribution manufacturing industries could make to the export target —they have been set a 445 per cent increase in the next 10 years—was the major topic of the National Development Conference today.

The manufacturing committee spokesman, Mr R. G. Speirs, said industry could meet the target, but he was called on to answer criticism that manufacturers wanted protection against competition.

The public session of the conference was devoted to the reports of the 13 sector committees, with comments by the chairman of each.

Most said they could meet the targets set by the target committee, but the fisheries contribution was qualified and two committees—forestry and tourism—said they could exceed the target committee’s expectations.

"Competition is seen by some as the major means of bringing manufacturing to a state of strength and improved competitive ability,” Mr Speirs said. “Voicing the view of an industrialist, 1 would say that New Zealand industry does not flinch from competition, provided it is fair competition.” Small Units The small unit was a vital element in any industriallyadvanced economy, especially where high degrees of flexibility, versatility, and precision were required, and there were many examples where these assets might give New Zealand, as they had in the past, a unique export advantage. But there were also important segments of industry that could benefit substantially from rationalisation or amalgamation, he said, and there were exports that might be flowing now if this process could be accelerated “If industry is to be enabled to compete effectively its infrastructure of skills, management techniques, productivity techniques, research, and design must first be greatly strengthened,” Mr Speirs said “It must be assured of appropriate length of production runs to enable unit costs to be kept reasonably low.” Future Policy In the future the emphasis in New Zealand industrial development was likely to fall more heavily on industries producing capital equipment and materials and parts for other industries, although there would still be a growing role in import substitu j tion and in exports. Mr Speirs said manufacturing was dependent on other sectors of the community,

especially transport and distribution. Frequently, the factory-door cost was no more than half the final price to the consumer.

“Any strengthening of manufacturing in its productivity and competitiveness will have to be matched by measures enabling improvements in efficiency higher in the distribution chain,” he said. Mr J. N. Laurenson, chairman of the distribution committee, said that if manufacturers could face competition overseas by exporting then they should be able to face it at home. When competition came New Zealand industry had to be strong enough to face it, Mr Speirs replied. Manu-

facturers did not want blanket protection, but they did not want to see unfair competition which could destroy a promising industry before it found its feet.

Mr Laurenson agreed that there could be no complaint if “all reasonable competition” was met. The public asked no more than that, he said. But it also asked no less.

Shipping Services

The frequency and reliability of services to newer markets were essential if New Zealand was to improve its export performance, said Mr I. D. Reid, chairman of the overseas marketing and exporting committee. The present services appeared to be too closely oriented to New Zealand’s traditional trade in bulk products to the United Kingdom, and the lack of adequate ser-

vice to the possibly substantial markets of Asia could be a distinct hindrance, he said. New Zealand had to attract new industries with significant export potential. A working party was considering this and, in particular, the effectiveness of taxation incentives, which might need to be altered to be fully effective.

It was also considering changes in other parts of the economy that might be necessary to make New Zealand an attractive production base for export-oriented industry. This raised detailed discussion of such subjects as overseas investment, royalty payments and incentives for industrial development. Mr Reid said the committee believed the targets were attainable, but to achieve them there must be an improvement in marketing skills, a massive effort by all sections of the community, with substantial sums being spent on training, services and incentives, and boldness and imagination, borrowing ideas from other conntries if necessary.