INDUSTRY AFTER THE WAR

Dominion, Volume 37, Issue 1, 27 September 1943, Page 3

INDUSTRY AFTER THE WAR

Planning For Change IMMEDIATE ACTION SUGGESTED

The problems with which industry will be faced in .switching over from war-time to peace-time production niter the war have been studied by the council of the New Zealand Manufacturers’ Federation, which has placed a report on the subject before the Government. '1 he council considers it imperative I bat provision should be made , now to enable inanilftictiirers to prepare for the great change over. . The secretary of the federation, Mr. D. I. Macdonald, says in a Press statement that manufacturers appreciate that the problem of meeting the post-wau position is one affecting primary industries and many other sections of commerce. The federation regards it as imperative that provision should be made immediately in income tax law and practice (1) to cover deferred maintenance of buildings’, plant, and machinery; (2) to enable replacement of obsolete machinery and to make necessary alterations and extensions to existing factories; (3) to meet post-war loss on stock values; and (4) .'to provide means whereby to purchase stock for post-war production. Through wartime demands, plant generally has been subjected to a very heavy strain and ‘wear and tear has been greatly in excess of that of normal production, it is stated. From. the point of view of the finances of individual concerns it is important to remember, that the reduction in expenditure on maintenance over the last few years has resulted in such concerns being saddled with higher taxation than would normally have been the case. From this arises the fact that profits have been fictitiously enlarged through this unavoidable factor. The federation, in submitting that manufacturers should be permitted to provide reserves, refers to action in Britain and claims that manufacturers should be allowed to make a deduction from taxable income for the establishment of reserves, appropriated from profits, to be set aside year by year to meet those charges. It is suggested that the average amount pended over the'three years prior to 194 L might be allowed as a general basis, plus, such percentage as would be necessary to meet special conditions which have arisen since then. Replacement of certain types of machines which have become obsolete and modernization of plant must take place if New Zealand’s manufacturing industries are to keep pace with overseas development, the federation claims. There will also necessarily be extensions to buildings and plant to give improved working conditions to employees and greater efficiency of production for postwar projects. The federation considers that to avoid the danger of current purchases of .imported raw materials for essential civilian needs resulting in. severe loss to manufacturers after the war, they should be emfbled to make some provision against loss in stock values, which, in many cases, will have, to be written down very substantially at the end of the war. It is urged that, provision similar to that made in Canada against such a contingency should be made in New Zealand. Another necessary adjustment to which the federation has drawn the Government’s attention is in regard to the purchase of post-war stock. In all these representations to the Government the federation has stressed the urgent need to have New Zealand’s manufacturing industries placed in a position from which they will be able to cope adequately with peacetime require-, meats, in line with recognition of the same problem in other countries. The federation urges that the whole problem should bo treated as one of major. rehabilitation policy and that it should be tackled immediately in ordet that it may be operative long enough before the end of the war to allow industry sufficient time to build up the necessary reserves.