‘Lower demand, controls, and wage rise-unemployment’

Press, Volume CXIV, Issue 33680, 1 November 1974, Page 9

‘Lower demand, controls, and wage rise-unemployment’

(.Neto Zealand Press Association)

WELLINGTON.

The Government would have to be prepared for unemployment if business generally, and retailers in particular, were squeezed on a falling market between price controls and wage rises, the chairman of James Smith, Ltd (Mr D. A Smith) said at the annual meeting.

“Retailens are a big group in the distributive system, and they must remain profitable/’ Mr Smith said. “We are as anxious as the Government to ensure that business confidence is maintained in spite of many uncertainties. All of us have a problem at present of assessing economic prospects in the coming year, and we as retailers must share the burden for the common good. “It is quite obvious that a relatively small downturn in sales will jeopardise our profitability if at the same time we have to meet a general wage rise of 7 per cent to 8 per cent, as assumed in some quarters.

“The tightening economic situation will demand a much lower wage increase in February if jobs are to be secured, and reality demands that we face the fact that we must cut our cloaks according to our cloth,” Mr Smith caid. The company was satisfied with the New Zealand-made goods sold during the last year. “I am convinced however, that it would be very much in the public interest to allow the import of a wider range of consumer goods. “In view of our present overseas exchange problems, the volume of any such imports would be restricted, so the long term effect on

employment would be negligible. “We are conscious of today’s changed trading conditions, which show a moderate decline in turnover. “We are optimistic about the outlook for 1975, because we are confident of the company’s ability to meet the challenges which the changes present,” Mr Smith said. “The Stabilisation of Prices Regulation.? had now developed into profit controls, because pre-tax profit was limited to an average percentage of those for the last four years. “If prices of some essential goods must be controlled in boom conditions, I do not see that as a reason for confusing the forward planning of business enterprise by requiring profits to conform with some cast-iron formula based on the past. "It has been gratifying to date to be free of any clamp-down on imports in the all-too-familiar stop-go pattern of the past two decade.?. “Last week the Minister of Trade and Industry (Mr Freer) was reported as saying, in spite of present difficulties, there would not be a re-imposition of import licensing generally, and licenses issued under the present schedule will be continued. “The Government must be commended for playing it cool in the face of record imports and a run-down in our overseas funds,” Mr Smith said.