COMMERCIAL Chairman sees end to stagflation

Press, Volume CXII, Issue 33092, 6 December 1972, Page 26

COMMERCIAL Chairman sees end to stagflation

“The advent of the Labour Government with its bias towards New Zealand manufacturing will probably result in an end to “stagflation”— as distinct from its twin evil of inflation,” the chairman of directors of Printing and Packaging Corporation/ Ltd (Mr L. C. Nisbet), told shareholders at the annual meeting in Christchurch yesterday.

"Inflation will become more of a hazard than ever if, as the Government has stated, the Remuneration Authority will be disbanded before Christmas — for nobody knows yet for certain what will take its place,” Mr Nisbet said. "I regard inflation as the number one problem in New Zealand today. With the farming community enjoying one of its cycles of prosperity, there is a real danger of wages and other costs increasing more or less in proportion to the rise in farming income, which, as we all know, is subject to violent fluctuations, whereas costs, once established, seldom recede. “The commercial community awaits the new rules and conditions of trade with keen interest and, no doubt, will quickly adjust to them. “In a farming economy, dependent upon exports for most of our markets, including new markets, it is important that we attempt to keep our costs down and wait for other nations’ economies and purchasing power to catch up with our own. Regional growth “While voluntary restraints may operate in the short run, human nature being what it is, they will not last, and it is for the Government to provide the necessary stable economy. In my opinion, Government agencies which exhort people to save and invest in Post Office and other savings banks, government and Local Body stocks, have a duty to preserve the pur-

chasing power of the New Zealand dollar,” he said. “A major plank in Labour’s platform was its declared intention to stimulate regional development. “The private sector will be quite willing to play its full part in development — regional or otherwise — provided that shareholders may anticipate commensurate rewards for risking their capital. “An essential element in prosperity is confidence, and in the long run the country’s welfare depends on a sound and steadily expanding economy.” Fann returns higher Referring to the company’s prospects for the year ahead, Mr Nisbet said that group sales showed an increase of--8 per cent for the four months to October 31, compared with the same period last year. The company’s factories were busy, with plenty of orders on hand — which was a reversal of the position last year, and the outlook was more promising than it has been for some time, the chairman said. With farming returns the highest for many years, business confidence was returning. Also, the company’s factories and retail outlets were strategically located to benefit from development — regional or otherwise. Payroll tax last yeaf cost the company $130,000, Mr Nisbet said. “Delighted as we are to contemplate the removal of this tax, we do not know if industry is to be burdened with something in lieu of it.” The chairman struck a note of caution on the subject of costs.

“Despite stabilisation regulations, costs of raw materials, merchandise, services and expenses generally keep creeping up as increases in awards — affecting ourselves and our suppliers — are approved by the Remuneration Authority. For example, at current level of wages and salaries, the recent cost-of-living order will cost our company $275,000 for a full year, and $178,000 for the remainder of the current year,” he said. Three directors, Sir Bernard Ashwin, Mr L. D. Cotterill, and Mr B. €. H. Whitcombe retired. Their places on the board were taken by Messrs P. E. Bourne, B. H. Smith and J. R. Milne. The general manager (Mr L. G. Davison) who has served the industry for fifty years, 44 of which have been with Whitcombe and Tombs and Printing and Packaging Corporation, will, in the normal course of events, be retiring in February of next year, and Mr P. E. Bourne has been appointed acting general manager, Mr Nisbet announced.