BLOW TO BUILDING INDUSTRY

Evening Star, Issue 21354, 7 March 1933, Page 2

BLOW TO BUILDING INDUSTRY

GOVERNMENT'S LEGISLATIVE MEASURES SERIOUS EFFECT OH COSTS As prophcsiscd in these columns many mouths ago, the cost of building has now taken a sharp rise. Prior to the New Year, building costs were the lowest for years, principally on account of the contractors’ scramble for work and the keen competition amongst builders’ suppliers, but now, prices' of materials have been forced up by the raising' of the exchange rate New Zealand on London Horn £llO to £125, with the additional burden of a 5 per cent, sales tax on all building articles. While giving immediate benefit to the farming community, the raising of the exchange rate lias had an adverse effect on imported articles, and importers have naturally passed on the increase, to the detriment of the general purchasing community, whose purses were already sufficiently light. The effect has been still further to restrict business. In many instances it has not been possible to pass on the extra 15 per cent, in exact money, and the nearest fraction in pence means something considerably more than a proportionate increase in the price of cheap articles. This undue gain, however, is offset by the fact that prices of some other articles'have not been altered, though this is not the case in regard to the sales tax.

.It is estimated that the higher exchange rate lias brought about a rise in prices to the extent of about £SO to £CO to the cost of an average fourroomed _ house. Almost everything needed in the construction of a wooden dwelling, apart from bricks and timber, is imported, the chief items being glass, paints, wallpapers, iron, and roof-iron, lead, nails, finishing cements, iron baths and plumbing fittings. Several cases are already reported of contractors being obliged to abandon work tendered for at the lower prices. One of the advantages claimed for the increasing of the exchange is that it will encourage the establishment of new secondary industries, which may produce a number of these articles, but they are not likely to be created immediately, and doubts are expressed, and with strong foundation, as to whether production costs in New Zealand will permit of a final sale price much below that of the imported article with which it will compete. In this connection, it has to be’’remembered that most imported articles arc produced on a ibass production scale greater and much more efficient than is ever possible in Now Zealand. While it has to be admitted that the higher exchange rate and the sales tax will h ave a detrimental effect on an industry already in a parlous state, there is also the possibility that costs will reach an even higher level. As the result of many firms holding large stocks of materials with a keen desire for business, the full effect of these latest burdens will not bp felt until stocks are completed, while the continued slackness in the trade will compel builders and contractors to do work at absolutely bed-rock prices. .In view of the economic tendencies in the past, the turning point of tho depression must soon appear on the horizon, and there seems that no better advice can bo given to home owners and prospective home owners than to build and repair immediately.

' INSPECT YOUR WATER TANK. Neglect of the hot water supply service is quite common in most households. The wise man will pay a periodical inspection to the storage tank in the roof., and keep the container free from slime and other matter which finds its way into the tank. All tanks should be covered with a piece of tin, vonosta, or poilite, with a brick placed on top, in order to assist in keeping the water clean. Tf the top of the tank is uncovered there, is nothing to prevent rats and other vermin from being drowned in the water.;