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DIVERTED BENEFITS

"The Government's laudable efforts to raise the standard of living of New Zealand workers," says the president of the Wellington Manufacturers' Association, have yielded an increased purchasing power which has helped imports in greater degree than it has helped locally manufactured articles. The Government's promise that manufacturers would recover their increased costs (wages and hours) by an increased turnover of the things they sell rested on the premise that the increased purchasing power of the worker's family would not be diverted unduly to imported articles. But the premise has proved unsound, and the promise unsubstantial. So long as people are permitted to buyin the cheapest market, a public purchasing power resulting from higher local wages that have raised the prices of locally made goods, but have not raised the prices of imported goods, must be diverted in great degree to the latter. This is what most people expected to happen— notwithstanding the Ministerial assurance that the local manufacturer's higher costs would be swallowed up in bigger turnover —and it is what, according to the manufacturers, has happened. Thus prophecy and history appear to be for once in accord. But that fact is not satisfying. The question is: What is to be done about it? The president, Mr. H. H. Higgins, states that the Government has appointed a committee. When the manufacturers were asked to pay higher wages, to reduce the machine hours worked per week, and to make other changes involving costs, they were told, in effect: Cast your money upon the waters-and it will return to you (by the bigger purchasing power and increased turnover route) after many days. Mr. Higgins states that the many days have now expanded into two and a half years without the return implied by the premise and the promise. Whether both, or either, continue valid is one of the things on which the committee's advice would be welcome. The acid test, of course, is what action, if any, the Government proposes to take in the matter of imports, which Mr. Savage regards as too heavy. In "Socialism in New Zealand," Mr. Lee suggests great freedom of action in dealing with imports. He thinks that "a time will come —and is rapidly arriving—when ... we shall be able to enter into permanent arrangements with other countries to swop volume for volume, commodity for commodity." If State advances-enable new New Zealand industries to absorb idle labour,

the increased circulation may set up a demand for imports rather than for the additional income produced in New Zealand, but is fear of exchange control to keep us permanently poorer?

Exchange control was featured, unfavourably, in Mr. Poison's recent statement on suggested antidotes for conditions symptomised by the fall in sterling funds. By various systems of control of imports and other things, local manufacturers might be given an assured share of the New Zealand market, but at a price to them (also to the consumer).

Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/EP19381126.2.27

Bibliographic details

Evening Post, Volume CXXVI, Issue 128, 26 November 1938, Page 8

Word Count
488

DIVERTED BENEFITS Evening Post, Volume CXXVI, Issue 128, 26 November 1938, Page 8

DIVERTED BENEFITS Evening Post, Volume CXXVI, Issue 128, 26 November 1938, Page 8

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