SERIOUS PLIGHT

Dominion, Volume 31, Issue 21, 20 October 1937, Page 12

SERIOUS PLIGHT

Position Of Secondary Industries

POSSIBLE REMEDIES Associated Chambers Say 40-Hour Week Must Go “Manufacturers in New Zealand have of late been producing a good deal of evidence to show (1) that the protection enjoyed by them in the past lias been neutralised to a considerable extent through increases in costs of production brought about by recent industrial legislation, and (2) that Heavy imports of manufactured goods have adversely affected the output of New Zealand factories, le ( j to staff reductions and even imperilled the continued operation of some plants,” says a statement by the Associated Chambers of Commerce of New Zealand.

"The position which exists to-day is undoubtedly a serious one. The Government has admitted that it recognised its industrial legislation would have a tendency to increase costs of production iu New Zealand and it lias expressed its determination ‘that economic industries in the Dominion will be safeguarded in the general interest.’ No indication has been given as to what steps the Government proposes to take to this end, but it appears clear that one of three things must happen: (1) The Government must increase the Customs tariff to bring the cost of imported goods up to the level of the cost of goods produced in New Zealand under the new laws. (2) The Government must cut down imports compulsorily by means of a system of licensing and rationing, thus permitting New Zealand-made goods to sell at abnormally high prices based on the present abnormal costs of production. (3) The Government must take such action as will permit of a reduced cost of manufacture in New Zealand.

Effect on Cost of Living.

“As to remedy No. 1 (increased Customs duties) this would make a serious addition to the already increasing cost of living in New Zealand, it would cause grave offence to Great Britain and other customer countries overseas aud it would injure our whole export trade. New Zealand is too dependent on the export of primary products and has too many competitors iu that field, to be able to take any high-handed tariff action against Britain, which buys 80 per cent, of the Dominion’s exported merchandise, or against other customer countries, since New Zealand’s existing margins of preference against foreign goods—in some cases up to 64 and 67 per cent.—are already regarded by foreign countries as insuperable obstacles to improved trade relations. "In regard to remedy No. 2 (import licensing and rationing) this would be a revolution in the Dominion’s import trade and would have all the evil effects of remedy No. 1, together with complete dislocation of the business of every trader in New Zealand and the opening of the door to grave abuse. The system has proved a curse in those unstable countries where it has been tried. The disruption that, would be caused would be a heavy debit to set against the advantages that might result to local manufacturers. There would have to be an immense degree of Governmental control and direction and further costs fo the taxpayer. "Already the Government is the sole trader in the country’s exported dairy produce, which it has placed iu the hands of a few firms in Great Britain. Does the Government intend to assume similar sole control of the whole of New Zealand’s import trade —an immeasurably more complex matter? If it does not mean Government displacement of those engaged in the import trade in New Zealand, it must mean that the Government will allot to importers those overseas credits created by the sale of New Zealand products and that the Government will, in addition, stipulate what goods are to be imported and to what extent. This in turn means that importers, far from being able to purchase what they think is most in demand iu New Zealand, will have to purchase, under official direction, only those articles from overseas which do not compete with the high-cost products of local industries, including vital necessities. The implications of such a system ean be readily gauged by the consuming public of the Dominion, “A further objection to remedies Nos. 1 and 2 is that by raising the cost of living they will make necessary a further increase in wages, which will cause manufacturing costs in New Zealand to rise still higher, so that the Inst state will be no bettor than the first. “Less Work for More Money.” “As to remedy No. -3 (reduction of costs) this appears to be the only sound course open to local manufacturers and Government alike. How, then, is this to be done? By reduced wages, or by increased efficiency? AVe do not believe iu low wages, but we know quite well that to enable high wages to be paid, every penny of them must be earned — otherwise they cannot last and the people are but living in a fool’s paradise. How then can the efficiency of industry iu New Zealand be so increased that it ean pay high wages and yet continue to exist?

“The result of recent labour legislation has been less work for more money and that policy has brought New Zealand’s industrial life to a crisis. The country must alter its slogan from ‘less work’ to ‘more work for more money.’ The more money the workers have the better, but it must be earned —that is ordinary common sense.

“Many manufacturers claim that since the enactment of recent labour legislation their operatives have worked less willingly and intensively than before the .working week was shortened. Thus industry is working fewer hours a week and at the same time accomplishing less work an hour —a combination that i.s ruinous. Again, the shorter working week and the reputed general slackening of effort on the part of operatives has created an artificial shortage of certain types of labour, particularly skilled labour and female labour. Thus the local manufacturer is again hampered. “It is evident that Now Zealand, by introducing the 40-hour week in conjunction with higher wage levels, has moved too far and too fast and lias imperilled its industries in relation to other countries which have not followed suit. Australia, for one, which is infinitely more highly developed industrially than New Zealand and which has resources in many ways superior to those of New Zealand, has recently turned down the 40-hour week proposal. It seems that the 40-hour week must go in New Zealand if this country is to maintain wages and a high standard of living.”