‘Rationalisation’ Of Industry Favoured

Press, Volume CIX, Issue 31942, 20 March 1969, Page 1

‘Rationalisation’ Of Industry Favoured

lN< * Zealand Frees Association)

WELLINGTON, March 19.

The Government should be prepared to assist the rationalisation of industry, according to the manufacturing committee of the National Development Conference.

The committee’s report, released today, says the committee believes it would be a grave mistake to conclude that merely because industrial units are small they are inefficient and should be amalgamated into larger units.

Nevertheless, In a number of industries the small size of the New Zealand market could not economically support a large number of units.

The committee says it believes that competition will continue to play an important part in inducing amalgamation.

The committee favours some further means of encouraging voluntary amalgamation or co-ordination in appropriate industries. Insofar as the provision of finance was a factor in this, the Development Finance Corporation might well play a useful role in co-operation with other appropriate agencies.

The corporation could not, however, he expected to initiate amalgamations. The report says the committee realises that amalgamation could have a number of social and economic implications. TRANSPORT COSTS The suggestion that the freight disadvantage and unequal transport costs from some areas in New Zealand to ocean terminals affects the ability to export of manufacturers in those areas, and prevents the proper development of the regions, was also considered by the committee. The report says that the

committee concedes that transport rates offer some barriers in certain areas, such as the West Coast. But in many other areas industries are sited because of the natural advantages which offset the disadvantage of transport costs.

However, when an additional freight cost is out of the control of the manufacturer (as with the centralising of ports for container shipping) it should be regarded as a “community cost.” The committee has suggested this to the transport committee of the conference. The point remains that the transport facilities at present available could be more efficiently organised. In many areas, duplication of services, and cumbersome methods of loading, packing and cartage lead to inefficient and costly services which should be organised if exports are to be marketed at the best possible price, the report says.