FIXATION OF COSTS

Dominion, Volume 29, Issue 254, 23 July 1936, Page 5

FIXATION OF COSTS

Compulsory Principle Opposed EFFECT ON WOOL INDUSTRY “It has been realised for many years that all progress with" regard to social conditions had advanced in the direction of getting away from status such as slavery, villeinage, serfdom and the like, to a system of free contract,” said Mr. 11. D. Acland, in his presidential address at the annual meeting of the New Zealand Sheepowners and Farmers’ Federation yesterday. “The principle of fixation of costs through the Arbitration Court has been to reverse that and establish a system of status for all workers.under the Act to the extent that it fixes a minimum rate of wages and hours of work below which such work cannot be allowed to be done. “The primary producer of New Zealand for export can meet such costs only in what he receives from his wool, meat and butter, unless the eqtiivalent in New Zealand currency is sufficiently increased to meet these internal costs and the disparity created by the system of status being applied to one section of the community only—viz., those covered by court awards and statute law. If this necessary equivalent is not provided, much land will certainly go out of production. New Zealand prices for farm produce are determined in most cases by export or world parity. “This was’ the position in 1930-32, when the gross proceeds from many high-country runs were not sufficient to cover the costs arbitrarily laid down by court awards for bringing in sheep off the country, taking off the wool and delivering it into store, and in the north, even to pay the rates and other statutory charges. In other words, the statutory fixation of costs at this period considerably over-ran the proceeds from the gross returns without any allowance having been made for stores, ordinary maintenance, interest on capital involved and rates and Government taxation. “There would appear to be risk, on present indications, of a recurrence of these conditions, as without a substantial subsidisation to meet the extra costs, the additional charges under the heads of shipping freights and freezing charges, coupled with the cost of shortening of hours, may closely approach the million-pound mark, this being on account of direct increases of cost under these two heads alone. “If Parliament subsidises New Zealand primary produce for export, there is a very great danger of the British Government putting on a protective duty equivalent to the amount of the subsidy or more. This has already been advocated by the British farmers, and New Zealand has to avoid being accused of dumping subsidised goods on the British market. “This federation has consistently opposed the compulsory principle of the Arbitration Court on the ground that primary producers have had to take the world’s parity for their goods; that all internal costs in all sheltered industries in New Zealand are ultimately passed on to the exporter, primary produce comprising the main exports from this country, as in the case of Great Britain manufactured goods comprise the bulk of exports from industrial Britain.”