Union head demands a new deal for south

Press, 21 August 1978, Page 1

Union head demands a new deal for south

This is the second in a series of articles by

GARRY ARTHUR

on Canterbury’s economic

problems.

Canterbury’s trade union leader. Mr Wes Cameron, prescribes fundamental treatment for Canterbury’s long-term economic problems. He wants to see the Government promote industries that will process the natural resources of the region — such as grain, meat, and wool — which are now being sent in their raw state to the North Island or abroad. Wheat is a natural asset of the South Island, and should be processed there. Instead, flour mills have been moved to the North Island, and the grain is sent there unprocessed. The South Island produces the best fine wools, but its woollen industry is being closed down, and most of the fine wools are processed overseas. Mr Cameron also sees a susar-beet industry as a real possibility for Canterburv and Southland. It wo"'d be another mdustrv to fill the gap in the meat wo-kers’ off-season He urges a snecia l in-

quirv into the South Island’s natural resources, followed by th deliberate establishment of secondary industries to make use of them. This could be achieved through incentives. discouragement of exnortinß unprocessed

commodities, or even by Government directives. Two years ago, Mr Cameron predicted that unemployment would reach 50,000 by now, and he was not far out. .hristchurch has had the worst of it, and he attributes this to the special effects of the withdrawal of the LytteltonWellington ferry; missing out on the advantages of Maui gas, which has helped North Island industries: and lack of any real regional planning by the Government for the South Island. Even if the optimists are right in thinking that the recession has “bottomed out,” Mr Cameron says that Christchurch will take longer to improve than anywhere else -— “if it ever does.” His reason for this gloomy outlook is that the movement of Christchurch industry to the North Island is likely to have a snowballing effect. People follow industry to find work, this increases the

population in the north, and even more industry decides to move there. “What has happened to Christchurch was not even anticipated by the Government,” says Mr Cameron. “I don’t think anyone expected things to get so bad." He wants to see Canter-

bury people getting together to put pressure on the Government or special regional measures. “We in the South Island are producing a large slice of the country’s income through our overseas earnings,” he said. “But very little of it is being spent on us.” Christchurch, North Canterbury’, and Nelson are the only parts of the South Island which are not declared priority areas for regional development.

The rest of the South Island is eligible for special suspensory loans to encourage manufacturers to move into development areas. Christchurch does, however, get freight incentives for north-bound goods. Under the unit rate scheme, a manufacturer

consigning goods by rail to North Island markets gets a freight concession. A firm using a freight consolidator gets a discount up to 10.5 per cent on application to the Department of Trade and Industry’. Christchurch manufacturers also enjoy differential freight rates between north and southbound traffic. Mr G. D. Rudd, the Railways . Department’s

district officer, does not favour the “iron bridge” concept (charging standard rail freight rates for Cook Strait). He believes a lower rail freight rate would kill off coastal shipping altogether. In turn, lack of coastal shipping would spell the end of the engineering industry in Christchurch.

New Zealand's population has stopped growing, and with no growth in the domestic market, the prospects for growth are small in those industries which do not export. Heavy engineering is hit hard by the Government’s decision to cut back on capital works such as hydro-electric schemes, thanks to the official reappraisal of future needs in the light of a stabilised population.

Andrews and Beaven, Ltd, is one Christchurch firm that has been helped by increased exporting activity. Although the engineering industry has been among the hardest hit by the recession, An-

tried to widen its range of drews and Beaven has won substantial export orders recently, giving the firm a much-needed lift, at least in the short term. Mr W. B. Beaven, the firm’s managing director, said his firm had also

products, and that had also helped. Staff had still been reduced, however.

Mr Beaven sees, engineering’s salvation in diversification into the agricultural sector, and into exports. He believes the trend towards a smaller volume of capital works is permanent, because of the halt in population growth. The Planning Council foresees only minimal growth in the economy in the next few years, and Mr Beaven feels that the South Island is losing ground in comparison with the north, because of the cost of transport and energy.

“No new industry in its right mind would set up in the South Island again,” he said.

He sees the “iron bridge” concept as vital for the South Island.

“Christchurch is certainly sljpping by the wayside,” said Mr Beaven. “There is a danger that the South Island will be become a rural and tourist area only.”