NEW LEGISLATION

Evening Post, Volume CXXVI, Issue 102, 27 October 1938, Page 10

NEW LEGISLATION

EFFECT ON COMMERCE

FOREBODINGS FELT

EMPLOYERS' VIEWS

Apprehension regarding the final effect of new legislation on the industrial and commercial life of the Dominion is expressed in the address of the president of the New Zealand Employers' Federation (Mr. A. C. Mitchell) at its annual meeting today.

"We cannot fail to realise that recent happenings in New Zealand in common with many other countries have completely changed the old economic order, and that the individual control of one's, business, on which the prosperity of this Dominion has been built up during the past century, is making way for a. system of bureaucratic and oppressive Government control, not only of our business activities, but of our entire social system," said Mr. Mitchell. "There is, of course, one school of thought that considers that the Government is better able to control the destiny and business of this country than those individual interests who have found|the capital, enterprise, and sound business management reIsponsible for its present development, but in legislating for the control of business by the Government, they quite overlook the fact that the shareholders —represented in this case by the electors—have it in their power to entirely change the system of control and personnel of the executive every three years, and no one with experience in business management would seriously suggest that such a policy could possibly result in efficient management of any business concern." The overwhelming vote of confidence tendered to the Labour Government, he continued, was the clearest evidence that a majority of electors were prepared to accept the popular course of endorsing a policy that appeared to offer the ■maximum immediate reward rather than the long view which involved consideration of the consequences. The extension of State control had already increased the load of taxation to record levels, and the new social security legislation imposed further crushing burdens on industry. Expansion of Government control meant'reduction in private ownership and confrol on which the State must rely for revenue by taxation to finance its own undertakings, involving a further pro rata levy on those remaining in business. TALK OF "INSULATION." "The capacity to pay bears a definite relationship to the volume of production and the prices realised from the sale of the goods produced in the Dominion, and any substantial fall in overseas prices must have serious repercussions on the revenue the Government might collect, through ordinary taxation channels," continued Mr. Mitchell. "The question then arises as tq where the additional revenue required to meet the obligations of the State is to be found, but that question remains unaswered. It has. been stated botn by the Prime Minister and the Minister of Finance in reply to questions on that point that they are relying f upon a gradual progressive development and expansion of production and revenue from the'sale of such increased production. / ' "We have been assured that the Government has developed a^ scheme whereby this Dominion will be effectively insulated against the possibility of another world depression, but experience, in the past has proved that in such circumsances only those countries, trading concerns, or individuals who have taken the precaution of building up reserves in prosperous times can long survive economic disaster." ANXIETY AND ARMAMENT. Having dealt with the position in European countries, Mr. Mitchell turned to the United States, which, apparently conscious of the gravity of the position, had embarked on a huge scheme of re-armament. Dissension and industrial turmoil were adding to the difficulties in some countries. The New Zealand Government itself was increasing its defences. What would be the position of New Zealand if the wide unrest developed into a trial of strength between the nations of the world? He stressed the hazards to seaborne commerce, notwithstanding protection. It was obvious that the withdrawal of men from ordinary avocations would result in decreased New Zealand production, with a resulting embarrassment to the Government in meeting its obligations. The Dominion was absolutely dependent on the Mother Country for markets for the bulk of its produce. "Probably never before in the history of the world has there been greater cause for anxiety than at present. In Great Britain we have a programme of re-armament in full swing involving a huge expenditure of public money in the building up of adequate defences to ensure the safety of her people, her country, and her seaborne commerce. Central Europe is today a huge armed camp with the mobilisation of the greatest force of highly-trained and disciplined troops ever assembled since 1914-18. Accelerated defence programmes ; by Britain and France showed that they were not convinced that the recent peaceful solution of European problems was permanent. History repeated itself, and periods of trade fluctuation with cycles of depressed prices for the commodities New Zealand had to sell might reasonably be expected. Even increased production might not guarantee an increased return. For: evidence of this one had only to study the returns for July of this year, recently issued by the Customs Department, and a comparison of thj overseas trading figures for the first seven months of this year as compared with the figures for the corresponding period of the two preceding years, as set out below: — Excess of Exports. Imports. Exports. £ (N.Z.) & (N.Z.) £ (N.Z.) 1938 .. 41,090,000 31,720,000 9,370,000 1937 .. 46,925,000 30,571,000 16,354,000 1936 .. 38,911,000 23,440,000 15,471,000 The above figures took no account of specie, of which £1478 was imported in July, 1938, and of which, in the seven months ended July, 1938, exports were £750 and imports £23,991. "FALLACIOUS ASSUMPTION." "Having regard to the oft-repeated assurances of both the Prime Minister and the Minister of Finance that they are relying upon the progressive development and expansion of production and the revenue from the sale cf such increased production to assist in providing the funds to finance the social security scheme, the above figures surely provide convincing evidence of the fallacy of that assumption and must cause thoughtful people to realise upon what an unstable foundation that costly structure has been erected. Surely it cannot be suggested that the serious fall in re-