CHANGING IMPORTING PROBLEMS

Evening Post, Volume CXXIX, Issue 65, 16 March 1940, Page 12

CHANGING IMPORTING PROBLEMS

An import restriction policy such as New Zealand is following calls for constant re-examination if it is

not to lead to new difficulties. On the surface conditions are now favourable to relaxation of restrictions, since sterling funds have doubled within the^ last three months. But the position has not really eased to this extent. Al, the height of the export season sterling funds should be greater, and the prompt payment under Government sales agreements also makes \ the'positiohlook^ better than it is. We pointed this out some" time ago in urging the Government to check its internal expansion policy, which was at the root o£ the whole trouble, and; were accused by Labour critics of a carping attempt to belittle the, success of the» Labour policy. Recently, however^ these same critics used similar arguments in answer to the demands which were being made for relaxation of import restrictions. We do not suggest now, and we never have done'so, that import restrictions can be lifted., Until internal inflation is checked and our internal economy brought into true relationship with the external position, artificial restrictions will have to remain.

Nevertheless, the" import control policy calls for modification for other reasons. Hitherto dje country has been able to avoid the worst consequences of restricted importing by using accumulated stocks, but these stocks are now. depleted. Henceforth we must depend upon what can be imported. We must really live from hand; to mouth, both for finished imported goods and for imported raw materials for industry. This necessitates consideration of whether we can obtain the necessary goods promptly as We require them. Attention may^ be"-drawn* in this respect, to the warning given by the New Zealand Ironmasters' Assc ciation. The association pointed out that certain goibds were now practically unprocurable from the United Kingdom and American manufacturers were quoting for very long deliveries. TTiere is this further fact to be remembered: a licence based upon values in 1938 will hot buy nearly the same quantity of goods in 1940. If the procedure followed in the future is the same as that of the past, importers may be quite unable to meet demands because (1) the sterling allowed (based on 1938 prices) is not sufficient for the "goods needed, and (2) orders must be placed much earlier than the licensing system allows if the goods are to be delivered when they are heeded. These are hard practical facts and must be faced or New Zealand may suffer serious, inconvenience to industry through the combination of "insulation" and a war policy which attempts to maintain extravagant peacetime expenditure.