THE PROBLEM OF OUR SECONDARY INDUSTRIES

Dominion, Volume 30, Issue 259, 29 July 1937, Page 10

THE PROBLEM OF OUR SECONDARY INDUSTRIES

There are very disturbing features associated with the lengthy statement published in yesterday’s Dominion respecting the position of New Zealand manufacturing industries. Making due allowance for seasonal fluctuations and a certain measure of reaction following on intensive production, the situation disclosed by the secietaiy of the Manufacturers’ Association must give very real ground for concern. At the same time it should not surprise those, who have given any serious study to the course of events following on the industrial and other legislation of the present Government.

The story told, by Mr. O’Shea, based on communications from members of the New Zealand Manufacturers Association, is clear enough in its main features. Following on a boom period, created; in part at least by the artificial forcing up of wages, manufacturers are now finding themselves in many cases short of orders and fa£ed with the necessity of curtailing output and reducing staffs. The extent to which this has occurred has not been fully measured, but it seems fairly evident from the concern shown by those affected that it is no light matter and that the fear ekists that the situation is likely to become worse than it is at the present time.

In recent statements published in the Press evidence has been afforded of an increasing volume of imports entering the country and competing with, and in some cases displacing, New Zea'andmade manufactures. In May last, to quote the secretary of the Manufacturers’ Association, there was an increase of £1,250,000 of imports compared with the figures for the corresponding month of the previous year. These imports, of course, did not.all. compete with local industries, but the figures were quoted to indicate, the trend. In fact the total imports for the 12 months ended May last exceeded those of the corresponding 12 months of the previous year by over £11,200,000, an increase of over 29 per cent. These heavy imports together with the increase in the volume of local manufactures are stated to have created a glut in the market of certain lines of goods, with the result of prospective slackness in the local industries affected, and further unemployment. A temporary glut, however unfortunate it might prove to be, may be expected to right itself in course of time, but the larger question of the ability of our secondary industries to successfully develop under existing conditions is quite another matter. Our secondary industries in the past have been given a measure of tariff protection designed to shelter and encourage their growth, but recent legislation has cut away much of the benefit of this assistance. How can our manufacturers be expected to compete with the outside world when they are called on to pay what is probably the highest scale of wages for the shortest hours of work known in any country, and are burdened in addition with the highest scale of taxation. That is the real problem to be faced.. The Minister of Industries apparently has it in mind to give some form of assistance against outside competition, but how is Uns to be done without imposing fresh burdens on the general public? He recognises that the industrial legislation of his Government was bound to increase costs to the consumer; and any new venture in that direction or in the way of. increased ..tariff protection must lead to further increases in the prices of goods. How, then, does, he propose to remedy the situation, disclosed ? It is widely recognised that as a matter of public policy it is desirable to encourage and assist our secondary industries; but any plan to this end must be so designed as to protect the interests of the community as a whole and especially to safeguard our chief export market. The fact is that the Government in its inexperience has plunged the community into the adoption of a policy without any proper appreciation of the ultimate effects of its actions on those it has sought to benefit. And unfortunately the country is only at the beginning of its troubles.