CO-OPERATION IN INDUSTRY

Evening Post, Volume CXX, Issue 123, 20 November 1935, Page 10

CO-OPERATION IN INDUSTRY

Until more information is available on the plan for restarting iron and steel works at Onekaka, we cannot offer an opinion on this particular proposal for Government cooperation with private enterprise. The Minister of Finance indicates, however, that the Government is prepared to co-operate in other industrial enterprises, and, as a means to this end, will invite responsible and representative industrial groups to attach associate members to the Unemployment Board. There are possibilities of great good in this plan. In New Zealand at present there is ample money awaiting profitable investment, but investors lack confidence. To give confidence and to make a start, what the Americans call "priming the pump" is justified. Great Britain has provided for this. The aid given for the completion of the Cunarder Queen Mary is an example. But the method has its dangers. Subsidies tend to stay. Also, in offering a subsidy to an industry which would not be started without it, the Government may find that it is committed to subsidising industries that would be operated without this aid. This has been the experience with building and farm subsidies. They have resulted -in more-work being put in hand; but they have also cheapened work for private individuals at the expense of the payers of wage taxation. This is largely unavoidable; but, if the subsidy system is to be anything more than a very temporary device, it should be separated from the Unemployment Fund. That fund is for the relief of unemployment, and its use in developing industries is justifiable only in so far as the scope for employment is extended. If this is not made the primary condition in extending aid to industry then the funds should come from loan or the Consolidated Fund, over the disbursement of which Parliament has direct control.