THE TRADING YEAR

Dominion, Volume 31, Issue 129, 25 February 1938, Page 12

THE TRADING YEAR

Large Turnovers But Profits Lag

EFFECT OF INCREASED COSTS From a tradin gpoint of view the year has been generally satisfactory, states tlie annual report of the Wellington Chamber of Commerce. Official figures for the full 12 months are not available, but indications are that record levels have been reached. The 11 months of 1937 ended November 30 yielded 21.2 per cent, more revenue in the form of sales tax than did the same period of 1936. while for the 12 months ended in November, exports amounted to the very high figure of £66,617,900, as compared with £56,354,624 for the 12 months ended November, 1936. This is an increase of over £12,000,000, or 18.2 per cent., and is largely the result of good prices being realised for the primary products of the Dominion, particularly wool. In former years dairy produce prices were the concern only of dairyfarmers and mercantile and l financial institutions, but to-day they interest the whole community, because any deficit iii the dairy industry account must be made good toy some form of general taxation. While the prosperity of the farmer is of vital importance to the business community, it is hoped that such prosperity can be maintained at a true level rather than at the expense of the taxpayer. For the first year of the operation of the guaranteed price scheme, under the Dairy Products Marketing Department, there was a deficit of £338,700 on the export of butter and cheese. The prices. which have been fixed l by the Government for the current season show an increase on last year’s rates, although even these rates have met with a certain amount of criticism from the industry on the grounds that increased and increasing costs should have been taken more into consideration. It remains to be seen whether a favourable market will support the rates that have been fixed, or whether there will be a substantial deficit for the taxpayers to meet. Profits Lag. Trading houses generally have experienced a busy year, turnovers have mostly been exceptionally good, but unfortunately profits have, lagged behind because of greatly increased costs. Reduced hours and higher wages, together with increased rates of taxation, are proving many avenues of commercial enterprise to be unprofitable, and are certainly curtailing profits in all businesses. Manufacturers in particular are finding the position most unsatisfactory, because of the heavy labour charges.

The legislative programme of the Government has been continued, and several new Acts, radical in lhe changes effected, are now in force. The’ Primary Products Marketing Amendment Act gives full power to the Primary Products Marketing Department to fix wholesale and retail prices, and conditions of sale, of dairy produce, fruit, honey and. eggs, and any other foodstuffs which may be declared by Order-in-Councll. This is but one step further toward complete Government control of business, and the chamber, supported by other chambers in the Dominion, continues to protest against this interference with private enterprise. The council’s prophesy that the Fair Rents Act would have the effect of discouraging building by private enterprise has been borne out by facts during the year. Notwithstanding the extensive house-building operations of the Government, it has been shown that permits issued for dwellings during 1937 py Wellington City recorded a continued decline in the number of dwellings constructed by private enterprise. These latter numbered 997 in 1929 as compared with 261 in 1937. Corresponding figures for the Lower Hutt borough are 411 and 103. With the recent extension of the provisions of the Fair\Rents Act, and the requirements in the 1937 Finance Aet placing the onus on landlords to find suitable other accommodation for their tenants before they can regain possession of rented dwellings, it is not considered likely that private enterprise will be prepared to invest in the new houses which are so badly needed all over the Dominion,

The public works policy of heavy spending continues. Following an expenditure programme of £10,450,000 for 1930-37, the Government proposes to spend £17,367,000 during 1937-38. This has the effect of reducing unemployment. Nevertheless, unemployment figures are still too high, asd chambers of commerce maintain that industry, rather than public works, should be given an opportunity to absorb the unemployed, leaving public works to take the load in depression years when industry is forced to lighten. German Trade Agreement. The Trade Agreement (New Zealand and Germany) Ratification Act shows that the Government is sincerely endeavouring to open up new markets for the interchange of products. The sales of dairy produce already affected to Germany under this agreement must redound to the advantage of New Zealand producers. It is hoped that the Government will be equally successful in its negotiations with Australia, Canada and the United States of America. There is a steady yearly increase in production of our primary products. No greater service can be rendered this county than in effecting bilateral agreements with countries which are prepared to modify their tariffs and other restrictions on our butter, cheese,

wool, beef, lainb and mutton in return for concessions we may make for some of their manufactured goods, providing always that we do not depart from the spirit of the Ottawa agreement and always maintain our preference to the United Kingdom’s products.

Immigration has been the subject of several discussions when councillors expressed their readiness to support any well planned scheme to open up the Dominion for British and other desirable immigrants, and particularly for skilled labourers and domestic helpers, of which we are in great need. The 'Wellington Chamber of Commerce has added very appreciably to its membership during the last twelve months, but, us the senior trade body, and situated in the capital city of the Dominion, it could embrace even more comprehensively than it does at present the business units which go to make up the trading community. The council hopes it will have the cooperation of all members of the chamber in expanding the membership, use fulness and influence of the chamber during the forthcoming year.