Parliament CONTROL OF INDUSTRIES

Dominion, Volume 30, Issue 10, 7 October 1936, Page 13

Parliament CONTROL OF INDUSTRIES

Government’s Efficiency Plan Discussed

COMPENSATION FOR SUFFERERS

Aim at Eliminating Waste and Confusion

Immediately after dealing with formal matteis yesteiday afternoon, the House of Representatives resumed the second reading debate on the Industrial Efficiency Bill, which provides for the control of industries. Members on both sides of the House took part and the Minister of Justice, Hon. H. G. R. Mason, also contributed to the discussion, expressing the opinion that the Bill contemplated the payment of compensation where an industry was adversely affected by any rationalisation plan.. He also expressed the belief that any 'benefit received by one section of an industry should be used to indemnify those who suffered. . In any case, he said, the job of eliminating waste and confusion in industry must be tackled: this work was one of true patriotism _ The Hon. A. Hamilton (Opposition, Wallace) said the bill was the most indefinite measure ever introduced into the House. The Rt. Hon. J. G. Coates (Opposition, Kaipara) contended that as a result of State intervention in the wheat and bread industries the price of bread had been.increased to the public. The House rose at 10.30 p.m., until 2.30 this afternoon.

The fear that, the Bill was designed to allow the Government to exercise socialistic control over all industry was expressed by Mr. J. Hargest (Opposition, Awarua). ‘‘The setting up of any competent body to advise the Government and industry generally on industrial development would be welcome,” Mr. Hargest said. “However, the aim of this Bill does not appear to be the establishment of a competent advisory body, but rather complete Government control. “In the first place, there is an allembracing definition of industry. I take it that the Minister intends to bring under the legislation the farming industry of this country, so that he will be able to dictate just what crops will be planted, just what Hocks will be kept, and the entire management of the industry. If he has it in his mind to manage the farming industry on these lines, he would be well advised to remember what has happened in the United States during the past tew years.” The Bill offered some manufacturers the opportunity of becoming monopolists. Having lost a great deal as a result of the legislation of the Inst few months, they now saw a chance to regain the lost ground. “This country was built up by the enterprise and ability of the ordinary private business man and farmer,” Mr. Hargest said. “There has been amazing progress In less than a hundred years, and if private enterprise is lef| alone it is safe to predict that there will be an even greater advance during the second hundred years of our history." The opinion that the Bill contemplated the payment of compensation in cases where an industry was adversely affected by any rationalisation plan was offered by the Attorney-General, Hon. H. G. B. Mason. He said he thought that those who received benefits as a result of the operation of the Bill would be quite willing that any funds obtained by way of levy should be used in part to indemnify those who suffered' any detriment.

“'The purpose of this Bill is not to prevent anyone making undue profits—another Bill has been passed for that purpose—but to introduce order into ‘industry.’’ the Minister said. “To resist the Bill is to plead for waste and extravagance. The time for the introduction of a BiJi of this sort is long overdue. If there are any deficiencies in this Bill I hope that we shall have the help of the members of the Opposition in showing where it can be improved. We can no longer have waste and confusion in industry. The job has to be tackled, and a postponement will not make it any the easier.’’ Minister’s Wide Powers. The opinion that the Bill was much too indefinite and placed far too wide a power in the hands of the Minister was expressed by the Hon. A. Hamilton (Opposition, Wallace). “The Bill does not face up to any particular problem and it deals with all sorts of things—with anything and nothing,” said Mr. Hamilton. The Minister of Internal Affairs, Hon. W.. E. Parry: Well, why object to it?

Mr. Hamilton: Because of its very indefiniteness. No one doubted that there should be order in business, continued Mr. Hamilton, but because there was 10 per cent, disorder in business or in society there was no reason why it should be regimented 100 per cent. Voluntary arrangements would be certain to operate much more satisfactorily.

“The Labour Party can see no good in society at all,” Mr. Hamilton added. ‘lt cannot see any good in the present system because someone has gone bankrupt or because someone else who should be getting 30/- a week is getting only 10/-. The Minister has asked for helpful criticism of the Bill. I am prepared to offer some by suggesting that he should scrap the Bill and bring in one that will deal with some definite branch of industry. As it is, this Bill will hang over the head of every industry in the country until it begins to operate, and no one knows when that will be, since the only operative part of the Bill is that which sets up a board.”

No one would deny that the industries of the country must be developed, said Mr. Hamilton, but it should be done in an orderly fashion. With the licensing of industry there was always the danger that monopolies would be created, and from that it was only another step to the development of the trust system. The Bureau of Industry to be set up under the Bill would represent a more vicious type of bureaucracy than any board the last Government had set up. A suggestion that two experienced business accountants should be appointed to the Bureau of Industry was made by Mr. C. H. Burnett (Government, Tauranga). He said it was a great pity that there had not been such a Bill on the Statute Book 30 or 40 years ago. If there had been such legislation in existence millions o’ pounds would have been saved by people who had lost their money in all sorts of wild-cat schemes. The Bill was a step in the right direction. There was ample scope for the rationalisation of both the primary and secondary industries.

The Rt. Hon. J. G. Coates (Opposition, Kaipara) said that nobody knew how far the Bill might go. nor had they any idea how it was going to operate. It provided for the regimentation of industry, and that would not work. The Bill would mean increased

costs and inefficiency, and the public would not be served as well as it was being served at present. The Minister of Industries and Commerce, Hon. I). G. Sullivan, had taken eiedit to himself for an improvement in the wheat and bread industries. The re suit of the Minister’s intervention, however, had been an increase of from a penny to twopence a loaf. Mr. Sullivan: The authorised in crease in the price of bread is a halfpenny a two pound loaf. Mr. Coates: Well, how is it that the price has gone up more than that? In the country districts, where most of the people use the four-ixmnd loaf, the price is up by twopence. That is the result of Government control or regulation. The fact remains that the people are now paying more for their bread than they were before the alteration was made. The Minister: There has been an increase of a penny a four-pound loaf. Mr. Coates: It is up twopence in many cases, and yet the Minister quotes the bread and wheat industries in support of the introduction of the Bill.

The manufacturers, said Mr. Coates, were entitled to ask for what they wanted, but at the same time one was justified in inquiring if they were satisfied with the Bill. The Minister: Licensing has their concurrence, co-ordination has their concurrence and the Bureau of Industry has their concurrence, but they want to have a larger say in the question as to whether any plan should or should not be adopted. Mr. Coates said he had been informed that the Minister had told the manufacturers that if they did not agree with the proposals in the Bill he would socialise every industry in the country. The Minister: I hope the honourable gentleman will accept my word when I say that I said nothing of the kind. What I did say was that if they did not want the Bill that was all right. Mr. Coates said he accepted the Minister’s statement. Last Government’s Proposals. Mr. Coates explained at length the proposals for assistance to industry developed by the last Government. In the report of the Tariff Commission of 1933, he said, it had been pointed out that certain industries were not economic and that the tariffs which they enjoyed were perpetuating conditions which were not in the best interests of the industries themselves. Those industries were given two years in which to put their affairs on an economic basis, but the manufacturers then began to ask for some assistance in straightening out the position. The last Government had taken the definite view that the onus was on the manufacturers to improve their own industries. However, there had apparently been a good deal of dissension and some manufacturers’ organisations had asked for powers of compulsion. The Government of that day had not been prepared to go that distance, but it had indicated that if specific cases of waste or incompetence were brought to its notice it would be prepared to deal with the matter by introducing legislation bearing on the individual industry concerned. That was a reasonable and logical approach to the whole position of efficiency in industry. Manufacturers, operating under the Government’s labour legislation, would be asked to compete with imports from countries where the hours of work were 44 to 48 a week,, where there were lower wages bills and where, in many cases, more efficient machinery was available. It was obvious that tariffs would have to be brought into the picture.

Mr. Sullivan: We know how each industry in the country will be affected by this legislation and only a .... idful will be seriously affected. Mr. Coates: How can the Government tell until the legislation is in operation?

Mr. H. M. Christie (Government. Waipawa): The manufacturers will have the benefit of Increased turnover. Mr. Coates: The increased turnover Is more than overtaken by increased costs.

The whole trend of affairs, Mr. Coates continued, meant either a rise in tariffs or an embargo on certain classes of imports. If those alternatives were ignored, the Prime Minister might find himself in the position of having to raise the rate of exchange still further. Planned Production, “We are -providing legislation that will lead to planned production,” said Mr. B. Roberts (Government, Wairarapa). Planned production, he .added, was what New Zealand needed, and it did not matter much whether it was called co-operation or rationalisation or anything else. In Great Britain farmers had been coerced into marketing schemes, and there had not been the voluntary spirit that had existed in this country.

Mr. C. A. Wilkinson (Opposition, Egmont) : British farmers came into the schemes of their own free will. “It was done in the same way as the last Government dealt with the dairy industry here,” said Mr. Roberts. “The minority was coerced by the majority.” Mr. W. J. Broadfoot (Opposition, Waitomo) : You have turned round now.

Mr. Roberts said Opposition members had claimed that private industry had built up industry in New Zealand.

That was largely so, but during the past few years private enterprise bad broken down, and the time had come for the institution of a more satisfactory form of control. / “Rash Experiment.” “The intentions behind this Bill may be good, but it is a hasty, ill-conceived and rash experiment,” said the Hon. J. G. Cobbe (Opposition, Orona). He suggested that the Government should postpone putting the Bill through for at least a year, so that representative experts could give it further consideration. The Bill, as it stood, looked altogether too much like an attempt to give the Minister of Industries and Commerce full control of the business of the country.

It was a significant fact, Mr. Cobbe said, that the Bill, while specifying many industries, made no mention ot farming, although he had no doubt that the Government intended to include farming in the list of industries which would be covered. Apparently farming had been left out in the meantime because of the hard knocks which the industry had already had from the recent legislation of the Government. Mr, Cobbe claimed that the Bill represented the first step toward bringing the Soviet system of administration into force in New Zealand. Referring to its possible effects on the development of industry generally, he claimed that it was very unlikely that private enterprise would invest money in any industry which was to be placed under bureaucratic control. The contention that the Bill would give protection to the investing public as well as the people as a whole was advanced by Mr. H. M. Chrstie (Government, Waipawa). The Minister, he said, had no intention of interfering in any business where it could be avoided. It was becoming increasingly obvious that some regulation of industry was necessary. It was increasingly difficult for businesses to stand alone, and in Great Britain, where the conditions were also ' very difficult, there was a demand for control and regulation. In introducing the Bill the Minister was doing the common-sense thing. “Will Break Down.”

“I don’t believe this Bill is worth the paper it is written on,” said Mr. R. A. Wright (Independent, Wellington Suburbs). “I believe it will break down as soon as its provisions are put into effect. Its real purpose is to support rings and combines and maintain prices under the' guise of rationalisation. If the Bill does happen to be workable it will form the thin end of the wedge of a socialised industry.” Mr. Wright said the Bill spelt the end of opportunity for small men to start in business. If the Bureau of Industry decided that a business was uneconomic the owner would, be dispossessed without compensation. A Government member: Does he get any now if he goes out of business? Mr. Wright: He does not mind going out in a fair contest, but he does not want to be put out by legislation passed by members of Pariiament, many of whom know nothing of business. Mr. Wright described as moonshine the suggestions by Government speakers that business in New Zealand was chaotic. He quoted statistics to show that for the last three years the production of the secondary industries was steadily on the up grade and that practically all concerns were strong and healthy. He concluded by saying that the Bill was one of the worst introduced in the House. A denial that there would be any element of dictatorship in the administration of the Bill was given by Mr. J. Thorn (Government, Thames). It had been suggested by Opposition members, said Jlr. Thorn, that representatives of any industry on the bureau would be able to squeeze out any others who might be thinking of starting in that industry, but that would not occur because there would be a sufficient proportion of State representatives on the bureau to prevent it. “Unregulated systems make it extremely difficult for industry to bear the strain of modern business,” added Mr. Thorn. “Blind and haphazard methods not only hinder the development of the country’s resources, but they also involve investors in great losses. Unrestricted competition is hard to direct into channels that will serve the common good. It is surprising that the opposition to this Bill should have come from a party which, when in power, was responsible for introducing in connection with the primary industries the policy with which the Bill conforms. In the meat industry and the dairy industry unregulated buying and selling has been eliminated with considerable advantage, and it is reasonable to assume that the same benefits will follow the regulation of industry generally." Mr. S. G. Smith (Opposition, New Plymouth) appealed to the Prime Minister to hold the Bill over until next session on the ground that it was farreaching and was not fully understood by those whom it would affect. The adjournment of the debate was moved by Mr. L. G. Lowry (Government, Otaki). The House rose at 10.30 p.m.