Call for more sense in Government

Press, Volume CXIV, Issue 33655, 3 October 1974, Page 17

Call for more sense in Government

(New Zealand Press Association) AUCKLAND. A call for more common sense and less philosophy to be applied to the economic needs of New Zealand and its people was made by the chairman of Zip Holdings, Ltd, (Mr L. Al. Papps) at the annual meeting.

“There appears to be a contradiction in the policies of a Government, which, on the one hand is dependent on a healthy commercial climate to finance its commendable social measures, and,- on the other, introduces unrealistically repressive legislation such as the Commerce Rill and the profit-ceiling requirements of the Price Stabilisation Regulations. “There is little to suggest that there is a need for these measures in New Zealand,’’ Mr Papps said. “It would appear that they have been imported in principle from other countries where a need might well exist, and they are being imposed on an economic scene where they can only cause chaos and cost without producing any real benefit.

“It will be our concern to adapt to changed conditions quickly and plan to provide the best returns to our shareholders possible in the circumstances. “In other words, the results in the year ahead are likely to be affected more by economic circumstances over which the company has little control than by any controllable factors,” Mr Papps said.

Inflationary growth Mr Papps said that in the three months to September 30, sales have reached $5,500,000, which is 12 per cent higher than for the same period of last year. “It would be unrealistic to expect a continuation of last year’s inflated rate of growth,” he said. “The sales to date indicate a growth rate about equal to the rate of inflation, which could be the pattern for the year. In the present economic position of the country, however, it should not be taken to mean that profits necessarily will follow the same trend. “Costs will cause the greatest concern in this year. In its pursuit of social legislation, the Government is increasingly having to lean on the commercial section to finance its measures both directly in the significantly Compensation Act, and the Superannuation Act, and indirectly int he significantly increased administration costs of the price control regulations.

“Even greater administration costs will be necessary to comply with the proposed Commerce Bill. “As a result of the 11.25 per cent General Wage Order, wages arerunning at

a higher level than might have been expected, and, in our manufacturing operation, a quite high proportion of this increase is having to be absorbed by the company,” Mr Papps said. Zip Holdings, Ltd, has already experienced the effect of the recent 9 per cent devaluation. Goods en route, and those on extended credit terms will now cost $42,000 more, and this is unlikely to be recovered. Raw materials will now cost more. “A capital loss of $48,000 will be incurred on overseas loan moneys which have provided largely for our expansion in the last few years.” The company had negotiated a further overseas loan of $500,000, and it was drawn on October 1, Mr Papps said.