MINISTER’S REPLY

Dominion, Volume 30, Issue 259, 29 July 1937, Page 13

MINISTER’S REPLY

Safeguarding of Local Industries "The Government is determined that economic industries in the Dominion will be safeguarded in the general public interest.” said the Minister of Industries and Commerce. Hou. D. G. Sullivan, in a reply he issued yesterday to the statement made by the general secretary of the New Zealand Manufacturers’ Federation. Mr. Rocke O’Shea. Mr. Sullivan said that as soon as New Zealand’s representatives had returned from abroad and the general policy could be laid down, the whole question of affording local industries adequate protection would receive the most urgent consideration. Mr. O’Shea, whose statement was published in "The Dominion,” had contended that the Government’s industrial policy had transferred to workers overseas benefits intended for New Zealand workers. "The general secretary of the Manufacturers’ Federation appears to have perpetrated a common fault in overstating its case, based perhaps on a too great faith in the impartiality of statements by individual members,” said Mr. Sullivan. “The position ,is that the Government recognised that its industrial legislation would have a tendency to increase costs of production in New Zealand, and that to obtain the fullest development of our manufacturing industries Government action in other directions might be necessary. To enable such action to be based on a firm foundation and fit it into the Government’s general policy, the Hon. W. Nash in October last proceeded overseas with the object of exploring the possibility of effecting trade agreements with overseas countries that would not conflict with the best interests of the Dominion as a whole. ‘‘During the period of Mr. Nash's negotiations the Government has been keeping in close touch with secondary Industry and with individual manufacturers, and all representations made to it by manufacturers regarding competition from overseas have been carefully investigated. Interview With President. “On July 20 I had a prolonged interview with Mr. D. Henry, president of the New Zealand Manufacturers’ Federation, and Mr. R. O’Shea, secretary of that organisation. At that interview they presented me with much of the information which is restated in such melodramatic language in this morning’s newspapers. Despite the length of the interview, we were unable to conclude it that evening because of my having to attend another conference, and we resumed' our discussions the following morning, July 21, when I gave Mr. Henry and Mr. O’Shea all the time they desired to state their case. “On Thursday, July 22, that is, tjie following day, I took the matter to Cabinet, when there took place a sympathetic discussion on the problems raised by the manufacturers, and when a decision was reached that the Bureau of Industry, assisted by the Industries and Commerce Department, should proceed immediately with a thorough survey of the state of our manufacturing industries, the -report to be presented bo a special meeting of Cabinet, together with recommendations as to what remedial action was justified with fair regard to the interests of our manufacturing industries, the interests of consumers, and just treatment of the Mother Country. “Since the statement of the case to me by Messrs. Henry and O’Shea scarcely one week has elapsed, and during those intervening days the bureau, the department and myself have been busy in gathering and analysing the data for the Cabinet report. Having regard to. the rapidity of the action taken by the Government to investigate the facts presented by Mr. Henry and Mr. O’Shea, and to the sympathetic desire of Cabinet to get the truth, it is clear that the action of the Manufacturers’ Federation through the mouth of their secretary, Mr. O’Shea, in selecting the morning of the arrival of the Prime Minister to publish their outburst of alarm, and the melodramatic language in which the statement is couched, was not only unnecessary but worse. It looks indeed as if the Manufacturers’ Federation has emerged into party politics. Tactics Criticised. “These tactics on the part of the Manufacturers’ Federation, supposed to be non-political in its constitution, may bring joy to the hearts of the Government’s political opponents, but the danger is that they will alienate from the Manufacturers’ Federation the sympathies of thousands of people in this country which it is necessary to maintain in the interests of our local industries.

"Coming to the substance of the manufacturers’ statements that the market is glutted with imported goods and that the demand on local manufacturers for their goods has slackened to iibe point that employees are being dismissed, I make the definite statement that the whole atmosphere of Mr. O’Shea’s story is one of much exaggeration. By that I mean that there- is some truth in it*, and much absurdity. Efficient manufacturing firms have written to me voluntarily stating that despite the restoration of wages, the 40-hour week and increased importations, they have more than held their own in the market, are not alarmed and have profited by the Increased purchasing power provided by the legislation of the Labour Government. We should not be asked to protect inefficiency. “As an instance of this, the following is an extract from a letter which I received recently from a manufacturing firm: ‘Now that we have bad a clear six mouths to judge the effect of the 40-hour week on efficient industries, I thought you would be pleased to learn that for the six months ending June 30. 1937, our output has increased by over 50 per cent., although we have worked practically no overtime. For your guidance I will set out the exact figures for the six months ending June .30, 1930, and 1937: 1936, six months, 433,512 garments; 1937, six months, 665,664 garments. This goes to show what can be done with efficient organisation, and if ever you could spare time yourself to pay us a visit the writer would be very glad to go over a lot of matters which I am sure will prove of interest to your department.’ “This is by no means an isolated instance,” said Mr. Sullivan. “The loudest protests come from the inefficient. Similarly with respect to the suggestion that the shelves of retailers are overstocked with imported goods, and that manufacturers have no orders in

hand, this may be so, but it is a natural position when one remembers the capacity to which our local manufacturers have in recent months been operating.

Overstocking Denied. “The following statement, which uppeared in the ‘Southland Times’ of July 22, is of interest in this connection:— , , , •• -Am far as we are concerned here the state of affairs existing in Auckland docs not apply,’ said the manager of one ot Invercargill’s leading retail houses, when asked yesterday to comment on telegraphed messages about retail shops in Auckland overstocking during the winter months. He also referred to a message, from Dunedin in which alarm was expressed about the increase in imports. “•The messages from both Dunedin and Auckland are interesting, but from my point of view, indicate what must be a state of inefficiency in the plants ot the . people who are grumbling,' commented < the manager. 'The Auckland message | said that the buying of goods from manti- ; facturers, particularly overseas, had tar ( outstripped the current, demand, aud t that, in consequence, slackness was expected to develop in some local factones. The position had been causing concern to manufacturers in recent weeks, and its latest phase, a decline in orders tor t delivery from factories next year, was ( likely to figure prominently in the dis- j cussions of the New Zealand Manufac- ( turers’ Federation. . . ■ ' 1 ‘‘‘The most efficient lactones tn New A Zealand are not only working to eapacitv but are not concerned with importaHons from either Australia or Eng and he declared. ’Most of the manufaetuieis . with whom we do business have so organised their plants on modern and Uli- 1 cient lines that they can quote prices j which would make it • uneconomic and . mere foolishness to import from oil.to imports, the ‘ pointed out that the protection which t local manufacturers were given,‘ Australian importations was about 40 f per cent., while to land most merchan- £ dise from England cost from 7o to &, Per ( cent. Surely with such ? e " ti Zealand manufacturers should be able to } compete successfully. Was not the re _ quest for further protection tantamount to admitting obsolete methods in the plants of those who were grumblin o . be c aS “ 6 ‘We are carrying bigger stocks, but j not because of any undue attempt to an- j ticipate the markets ’ said the manage j, of another big retail house. Th e real g reason is that we are doing a bi o „ei ( trade; there is a bigger demand by the j spending ‘ “odd theVoeks be regarded as e«ewe, t noTu T -e S t b ionTf a m-e^toeking r The fact J shouffi not be lost sight of that the guan- ’ tides of stocks had not necessarily u t creased as much as the values of be t ™r>ds Buying expenditure would thm an impression that extraordinarily rj purchases were being made. t “To indicate the prosperity of out j manufacturing industries, the a figures are most valuable, the Minister proceeded. “During the year ended Marcl £ 1936, a record number of employeeswere . en-a-ed in secondary industries, but the c information received by the be- 1 Statistician to date shows tha neve-be f fore in the history of New Zealand J our manufacturers been so busy as thej were last year and at the beginning of th Mr y Sullivan said the following table < sets out the position, the figures covering t an equal number of the same firms in t each year l93G _ 37 1 Industry. (1935-36 = 100) ( Biscuit and Confectionery— £ Employees t Output 121 Woollen Mills — Employees Output 124 Boots and Shoes— Employees lly Output 1-1 Hosiery— Employees lyb Output 11° Clothing— Employees H° Output- 128 “All my public life I have been a friend to and an advocate for New Zealand manufacturing industries,” added the Minister. “As a- member of the Govern- J ment I am desirous of assisting them, and 1 during the past year I have been endeav- ' ouring to get from the manufacturers solid evidence that would justify me in . going to the Government and asking for protection for our local industries and for the workers engaged in them. To that end. in co-operation with the ActingMinister of Customs, several officers representing both departments were appointed to the definite work of examining industries that claimed that their competitive position in the market was being detrimentally affected by increased manufacturing costs arising out of increased wages and shortened hours. Demand for Supplies. “The general result of tne investigations made indicates that many manufacturers have not been able to meet the demand for supplies and that they have bad considerable difficulty in obtaining skilled labour and the whole country had been combed in an endeavour Io supply an unsatisfied demand for skilled labour. “Only as late as a few weeks ago a call for two footwear manufacturing operatives could not be met. While on the subject of the footwear industry, the consuming public, in view of Mr. O'Shea's statement, will be interested to learn that some months ago Government officers endeavoured to obtain particulars of the state of the industry from Auckland manufacturers. Of the five manufacturers interviewed four stated that they were concentrating on non-competitive types of footwear, or did not wish to make representations regarding increased protection. The filth was communicated with on several occasions, but the manager on each occasion stated he was too busy to give any attention to the subject. Since that date no representations have been received from these manufacturers. Surely, in view of this, Mr. O’Shea’s ‘Northern Footwear Manufacturer,' if there is any substance in his complaint, would have approached the , Government. , “A similar position applies to the tanning industry. Government flies ' show cases of tanners who by reorganisation and some addition to plant were ' able practically to maintain their previ- ■ ous output while statements were also made that they had not felt any in- . creased competition from overseas manu- - facturers. , i Sale of Footballs. “Recently much publicity was given i in the Press to a statement by a inanut facturer that sales of footballs made by _■ him had decreased to speh an extent that . there was a possibility that he would be - faced with the necessity of dispensing j altogether with bands who normally would be engaged in turning out equipment for use on tb.e playing fields in ’ New Zealand. The manufacturer in 5 question, when interviewed, stated that ' he did not desire to proceed any further with bis complaint, as his business bad - not suffered and the labour previously i utilised in the manufacture of footballs - had been absorbed in another section of j his business. f “’When the question was investigated it was found that apart from one line of '' very cheap footballs, which were really 1 toys and in the manufacture of which '• only a comparatively small amount of lar bour was involved, the sales of footballs 1 had increased this season compared with r last season. “Altogether a great many comB plaints have been investigated by the Government, and a great num- ’’ her have been proved to have ’’ been made without the true facts having v been ascertained. The investigations have ■ also shown that in many cases the prices e being charged to the public returned the e producer a reasonable profit on the capir tai used in the business. Every coml plaint with respect to dumping has been ■ investigated or is in course of investigation, and where dumping was taking place appropriate action has been taken. No complaint has been received from -• confectionery manufacturers. i- “The truth is that surprisingly little dee finite information has been placed before 1 me or my officers either by individual 1 manufacturers or the manufacturers’ fed-

eration in support of their case for increased protection till this week. Indeed, I am fully justified in saying—after allowing for a good effort on the part of a limited few—that the Government has been far more active in endeavouring to get useful information on the subject than the manufacturers or their organisations have been in assisting me to try and help them. “In conclusion, may I express the hope that the friendly relations that have existed between the manufacturers, their federation and myself as Minister of Industries and Commerce will continue in the interests of our manufacturing industries, the workers engaged in them, and the families dependent on those workers. The manufacturers are not more anxious than I am to see our local industries firmly established and growing in importance. “I have a strong faith that despite the many difficulties and obstacles that lie in the path, the development of our secondary industries can be achieved on the basis of friendly understanding between the manufacturers and their workers, the Minister and the Government, and I invite the co-operation of manufacturers until success has been achieved. The Government on its part is determined that economic industries in the Dominion will be safeguarded in the general public interest, and as soon as our representatives have returned from abroad and the general policy can be laid down, the whole question of affording our local industries adequate protection will receive the most urgent consideration.”