Evening Post. MONDAY, DECEMBER 30, 1940. FREEDOM TO WORK

Evening Post, Volume CXXX, Issue 156, 30 December 1940, Page 6

Evening Post. MONDAY, DECEMBER 30, 1940. FREEDOM TO WORK

Radical changes have been made in the character and methods of conducting business in New Zealand during fifteen months of war. Some of them may be temporary, others may be for good or as long as evolution in industry and commerce will permit. In this favoured land, however, Nature has gone about her job fairly and steadily, war or no war. Official returns show an increase in ithe number of lambs, a substantial increase in meat production, a wool clip up to the annual average of 303,000,0001b (sold at an average price of 12.09 d per lb, as compared with 9.17 d per lb for last year), butter output 9 per cent, and cheese nearly 15 per cent, more than last year. In fine, there have been no serious setbacks to the various branches of husbandry that can be attributed to natural causes. To

primary production, in the main, may be credited an export trade of the value of £70,000,000, or £11,500,000 more than for the twelve months ended November 30, 1939. Deducting the value of imports for the period in review, the Dominion has for 1940 an external trade credit balance of £21,350,226, or nearly three times greater than that for the twelve months ended November, 1939, when the excess of exports over imports was £7,240,058.

Results of primary production can be regarded as highly satisfactory. But the carrying on of business during the period under survey has been exceedingly difficult and, the war apart, it does not appear that conditions will be any easier in 1941. The war, however, is not wholly responsible for present complexities and hindrances to the smooth flow of industry and commerce in New Zealand. When hostilities had begun New Zealand was wading through troubles of its own making; but the outbreak of war accentuated them. There was already, for instance, the clamping down on imports and exchange with the twofold object of rehabilitating London funds and the stimulation of secondary industries — although the encouragement and protection afforded by the Customs tariff and the sterling exchange rate was far from niggardly. This policy of so-called "selective" imports was carried over into the war period. Then the problem of price increases immediately presented itself, arid the Government, having already taken a hand in trade, increased its powers in control of commerce under emergency regulations. Overhead expenses and costs of production (especially for labour) have risen all round, in farm, factory, shop, and office. Taxation is exceptionally heavy. Whether but for Government intervention costs would have gone higher is a matter for argument; but there is no doubt whatever that, with existing taxation, these costs have reduced profits, curtailed dividends, and gnawed into returns from fixed incomes. The object of import and exchange control in respect to augmenting sterling resources would appear to have been achieved, for net overseas assets of the Reserve Bank and the trading banks, which fell to £NZ6,807,000 in December, 1938, rose to £NZ27,382,000 by June, 1940, and were £NZ21,232,000 in November, 1940, as compared with £NZ11,291,000 for November, 1939. These returns in June, 1941, should show an improvement on the latest figures, especially as the trend of imports is still downward under pressure of control. There are. of course, considerable overseas obligations that will have to be met, some

arising from the war, some in redemption of debt, and some in repayment of temporary advances secured during the sterling crisis. To prophesy on the course that industry and commerce will take in 1941 would be folly and to no profit; but there is no question that the urgent need for the new year is a return of confidence not in the issue of the war, which may be long deferred, but in the administration of New Zealand's own family affairs. Confidence in business and investment in business have received some severe blows. Time is needed for recovery. That recovery is absolutely essential if the Dominion is to retain its vitality in industry and commerce and finance. Lack of ready money is not the need of the hour in New Zealand (there is plenty), primary production is not slackening off—but increasing. It is the excessive development of Government activity, with its rapidly extending control and swiftly rising costs, that gives most concern at the moment. That development, as has been pointed out, is by no means wholly war-produced. The eve of a new year brings with it the hope that industry and business will be allowed to get on with their tasks, unharassed and, as much as possible, unhampered by difficulties!

of local origin. Difficulties springing from the war are in themselves quite sufficient to engage every thought and every effort. If the country is to cope with these and to prepare for the new problems that will come with peace, freedom and scope must be given for the initiative and enterprise which, more than all the State control, will supply the motive power for progress. I