VITAL PROBLEMS

Dominion, Volume 29, Issue 95, 16 January 1936, Page 10

VITAL PROBLEMS

Manufacturers to Wait on Government

FUTURE OF INDUSTRY

Attitude Toward High Exchange Important questions affecting the immediate future of New Zealand industries will be the subject of representations by a deputation this morning from the New Zealand Manufacturers' Federation to the Prime Minister, Hon. M. J. Savage, the Minister of Finance, Hou. W. Nash, and the Minister of Industries and Commerce, Hon. D. G. Sullivan.

The federation will be represented by the president, Mr. D. Henry, the secretary, Mr. A. E. Mander, the president of the Wellington Manufacturers’ Association, Mr. lan Matheson, and Messrs. J. T. Spears, W. McLay, F. N. Ambler, H. C. Govan, 11. Lee, J. Lewis and. J. Abel.

The subjects to be discussed include the following vital problemsPrimage on goods from the United Kingdom; trade agreements with Australia and Canada; exchange rate on State departmental purchases; end-of-season trade, referring particularly to women’s clothing; imports from Japan; and matters dealing with rayon fabric, pipe fittings and nails. As a matter of fact, some of the questions to be considered today already have been submitted in the form of a memorandum to Labour Ministers immediately after their assumption of office. Representatives of the federation slate that the leaders of the Labour Government, even before assuming office, announced in unequivocal terms that it was one of their major purposes to foster the development of manufacturing industries. Such a declaration was naturally welcomed by manufacturers, as it must have been also by scores of thousands of workers engaged in these industries, and, too. by parents who have been seriously concerned with the problem of the future of their boys.

The federation adds that it is clear that the expansion of existing industries, together with the establishment of new industries, offers to-day the most hopeful means of increasing New Zealand’s national wealth and welfare. "That the Government itself recognises this fact is most heartening. There are, however, one or two general considerations which we desire to place before the Government at the outset,” it proceeds.

Raising Production Costs.

“Presumably the Labour Government's chief aim will be to raise the standard of living of the mass of the people, and some of the steps in this direction arc bound to be of such a nature that they will result in raising the costs of production in New Zealand industry. Manufacturers, as a body, certainly do not subscribe to the theory of low wages. Apart from all other considerations, it is obviously contrary to the interests of industry to have its potential customers without adequate spending power. “At the same time, it is necessary to realise that New Zealand industries are obliged to compete in this market with the products of overseas factories; and if our production costs are raised without some compensating safeguard the result must be to increase the prices of New Zealand goods in comparison with imported goods, w’hich means that the sales of New Zealand goods will drop, and consequently New Zealand industries will be unable to keep so many workers in employment. “It is not necessary to press this point further, but we do ask that the Government will recognise the position in which our industries are placed. If our costs are raised, without some compensating safeguard, the number of workers who can be employed in industry is bound, for the reason given, to decline. We believe that the Government will agree that this must, at all costs, be avoided; for, instead of a decrease, we all want to see a large and rapid increase of employment. Exchange Question. "Regarding the question of exchange, we may point) out that the same principle applies. The Government is aware that the rate of exchange has, in recent years, been of some protective value to New Zealand industry. The Tariff Commission reported that, this advantage to industry was only temporary, as an adjustment of costs would follow, and thus any protective effect of high exchange would work itself out in time. It may have done so to a considerable extent already. Nevertheless, it is clear that the Tariff Commission’s reasoning would now ripply, in reverse, to any new departure from the existing level of exchange in the direction of lowering it. By decreasing the landed cost of imported goods, such a policy would inevitably reduce the sales of competitive New Zealand goods, which in turn would reduce the amount of labour which could be employed in New Zealand industry. Incidentally, it would also reduce or eliminate the Government’s revenue from the taxation of New Zealand manufacturers.”

On such other important questions as that of primage duty, the rectification of the tariff in respect of Australian goods, the problem of cnd-of-season importation, and the menace of .Japanese competition, the Manufacturers Federation now seeks an opportunity of making detailed representations.