Price scheme attacked at N.D.C. conference

Press, Volume CXII, Issue 32862, 10 March 1972, Page 3

Price scheme attacked at N.D.C. conference

(New Zealand Press Association)

WELLINGTON, March 9. The price justification scheme was attacked at the National Development Conference today.

The managing director of Feltex, New Zealand, Ltd, (Mr G. E. Pearce) said the price justification and control procedures of the Department of Industries and Commerce were based on the cost-plus principle.

The department refused to differentiate between effectiveness of labour from one industry to another, he said. “It thus gives price benefits to the inefficient and applies a disincentive to the more efficient. “It also disallows incentive payments as a proper cost of production when incurred by achieving an above-standard performance.” Lack of confidence by those industries under price control was preventing installation of more productive plant because the recovery of incentive payment and special depreciation Was deemed unacceptable for pricing purposes, Mr Pearce said.

“This unhappy situation becomes further compounded by a pricing authority that fails to recognise that a given product can attract different selling costs and different manufacturing costs through volume variances. “In other words, the same product can properly have two or more different selling prices. “The issue of a price order based on ‘average conditions’ lacks reality and is unacceptable in the more sophisticated trading environment that is now emerging.” Speaking of the attitude of the work force, Mr Pearce said that the board room and

top management could talk about the value of scientifically established work standards and know how well intentioned they were in terms of the national need for higher productivity. “On the factory floor, however, the same words could conjure up the stereotype of the grasping capitalist trying to put one across the workers,” Mr Pearce said. “I’d even favour industry assisting union understanding of industrial engineering by

making an initial contribution towards the cost of the Federation of Labour or an appropriate body engaging its own industrial engineer, so that expert assessments on productivity proposals by industry could be made on behalf of unions.”

In his closing address, the chairman of the National Development Council (the Deputy Prime Minister (Mr Muldoon) referred to yesterday’s discussion on import licensing.

The policy decision had been to review all items subject to import licensing, not to remove licensing, he said. Mr Mul<Joon said he regretted that the productive and positive work of the N.D.C. was not news; but when someone criticised the N.D.C. or a sector council “it might even get a headline.” He said the National Development Council agreed with speakers who felt there should be a productivity council, but there were some difficulties associated with each of the proposals before them. However the question would be raised at next month’s council meeting.