STEEL FURNITURE

Dominion, Volume 30, Issue 266, 6 August 1937, Page 12

STEEL FURNITURE

Reply to Complaint by Company EXCHANGE AND DUTY Statement by Minister The complaint by a Wellington engineering firm that the Government was compelling contractors for the equipment of its buildings to purchase steel furniture and office equipment from the railway workshops was replied to yesterday by the Minister of Railways, Hon. D. G. Sullivan. Mr. Sullivan, who said the company in question had enjoyed and was still enjoying a substantial share of Government work, denied that the Railway Department had any advantage over private enterprise so far as exchange and the payment of import duty was concerned. "I was somewhat surprised and not a little disappointed," said Mr. Sullivan, "to notice that the managing director of the Precision Engineering Company had addressed to the council of the Wellington Chamber of Commerce a copy of a letter which he sent to me quite recently in my capacity as Minister of Industries and Commerce, and to which I had promised to give a considered reply. “The action of the managing director of the company in giving publicity to the letter without informing me of his intention was, iu the circumstances, all the more surprising and discourteous because of his failure, first, to advise me that it was his intention publicly to ventilate his alleged grievance without awaiting my reply; and, secondly, following on his first omission, to advise the chamber of commerce that so far as 1 was concerned the matter, in accordance with my reply to the company’s letter, was sub judiee and the subject of inquiry by myself. “Misleading Information.” "This failure to observe ordinary fair play aud the usual courtesy in conducting correspondence is regrettable enough, but what is more to be deplored is the inaccurate aud misleading information conveyed to the chamber of commerce and the public in the communications addressed to the chamber by the managing director of a company who attacks the Government and the Railways Department on entirely inaccurate grounds and mere assumptions, the correctness or otherwise of which could have been verified with little, if any, trouble on the part of those so willing to append their signature to a series of unfounded statements. “As the matter is one that was given considerable prominence in the Press, aud occasioned a good deal of discussion by the chamber, it is made to appear tirnt a good deal of public interest centres around the subject. “Actually, the position disclosed by the files shows that the subject, like Vesuvius, breaks out afresh from time to time, although it has been quiescent for the last two years. All of the outbreaks have had the Precision Engineering Company as their main driving force, and it is fairly common knowledge that those who have been expected to fight the company’s battles have long since lost their keenness. Steel Shelving Plant. “This is not to be wondered at when the alleged facts on which the company supports its case are so Inaccurate and misleading. Take, first, the claim of pioneering made by the company, and what do we find? Quite apart from the fact that the Railway Department itself is a substantial, if not the most substantial, individual user of steel shelving, its ordinary steel metal aud tinsmithing work is of very considerable dimensions, so much so that this branch of its activities ranks as probably the largest of its kind in the country. These activities were commenced before the Precision Company started its operations. Any suggestion, therefore, that the Railway Department has built up a duplicate steel shelving plant for its own or other Government departments’ requirements is entirely mythical. “Then again,” continued the Minister, “the company complains of unfair competition because the department does not pay exchange or primage duty on the imported materials the same as private industry requires to pay. Was it au accidental or intentional error on the part of the company when it overlooked the fact that the materials referred to are admitted free of duty aud also that all Government departments do, in accordance with the decision of the Government, pay exchange on all materials imported from Britain? So that on these two points of complaint, exchange and duty, private enterprise is on precisely the same footing as the Railways. Mental Hospital Contract. “Coming now to the question of the specifications issued in connection with the contracts for Kingseat Mental Hospital and the building for the Dental Division of the Health Department in Wellington. we find another assumption stated as a fact by the Precision Engineering Company, and the series of blunders for which the company is responsible added to. Based on the company’s statement one newspaper features in its headlines. ‘Private goods claimed to be 20 per cent, cheaper.’ But again what are the real facts? First, that in connection with the Kingse.il Mental Hospital job no price was mentioned in the specifications, nor had a tender been received by anyone from the Railways Department at the time the company's letter was written, or when the chamber of commerce discussed the matter: secondly, in connection with the Dental Hygiene Department's job. the Railways Department knew nothing about it and has not so far been asked to quote. The amount mentioned in the specifications for the Dental Hygiene job was an estimate prepared by the Public Works Department after obtaining the probable cost from the Precision Engineering Company, and making an allowance for any increase in the cost of imported materials due to the fact that it will be some time yet before the order is actually placed. “If. of course, the work can be. ami is done for less than the amount allowed in the specifications, the job will obtain the uronit for thi* reduction. I cannot, however, emphasise too strongly that the in ice quoted in the specifications was not a railway Price, nor can I repudiate too definitely that the Railways Department is not exempt from the payment of exHiance. . As sheet metal imported from Britain is free of duty to private enterprise as well !IS to the Railways Department, the latter has no ndvantace in this respect either. Long-standing Policy, *A S ? ues ti°n extending the held of. the Railways Department’s operations in the manufacture of steel furniture, the present Government has not altered the long-standing policy in this respect, although the general policy of the Labour Government has undoubtedly resulted in a greater volume of activity, both in regard to Government business and private industry. "It is a fact that when (he present workshops were brought into use it was the expressed intention of the Government which authorised their construction that they should be utilised to carry out

any work required by other departments which the workshops were capable of performing. Indeed, part of the justification for the outlay of the heavy capital expenditure involved lay in this intention.”

"Further, in the Railways Statement of 1928, under the heading ‘Reorganisation of Workshops,’ the following statement appears: ’As stated, the new shops provide capacity for building the department's new rolling-stock requirements (with the exception of a comparatively few specialty items) and any mechanical work required for the railways or any other State department. This policy will permit the importation of only raw materials in the future, instead of finished articles, and will assist the labour situation of the Dominion by providing work in New Zealand 'rather than elsewhere. Without the reorganisation of the workshops as planned by the department this v.ould not have been possible ' View of Commission. “Again, when the matter was the subject of consideration by the Railways Commission of 1930, it reported as follows: ‘lt can be said that the workshops now occupied by the Railway Department are the best equipped and most up to date in the Dominion. This being so, the department should be able to underlake work required by other Government departments at a less cost than this work can be catered for by private firms, and opportunity should be given to the Railways Department to tender for such work. Your commission makes this suggestion, not with the object of taking away from private firms certain Government work which they are now carrying out, but rather with the object of utilising to their full capacity the machines and equipment which are in the possession of the Government through the Railways Department.' “Surely,” commented the Minister, "no reasonably intelligent person requires any better evidence than this on the question as to why the present Government is anxious to see that full and adequate use is made by all Government departments of the largest and best-equipped industry in the country which is the property of all the people and not one particular section of it.”

"In conclusion, the Precision Engineering Company h s enjoyed, and is still enjoying, a substantial share of Government work, both directly and indirectly. It holds at the present time the contract for the manufacture of all registration plates for motor vehicles, and the company has just finished a substantial job in connection with the new railway station at Wei lington—a class of work which the department itself could quite well have undertaken if the Government desired to interfere unduly with private enterprise."