RECOVERY PROGRAMMES

Evening Star, Issue 22192, 21 November 1935, Page 7

RECOVERY PROGRAMMES

IMPORTANCE OF MANUFACTURING ADDRESS TO DOMINION FEDERATION PROSPERITY HOT LINKED SOLELY TO FARM PRODUCTS In liis presidential address to the annual conference of the Manufacturers’ Federation, which commenced at Wellington to-day, Mr James Hogg (Dunedin) stressed the fact that the Dominion’s prosperity rested as much oil industrial progress as upon farmers’ exports. “ Industrial development is taking such a large place to-day in the progress. and recovery programme of every country, and particularly of Great Britain and our sister dominions, that we are quite justified in pushing the claims of industry in this country and ■f meeting frequently to consider our industrial problems and, when neces■nry, ’to confer with the Government ■>f the day on matters of vital importance to the whole Dominion,” said Mr ilogg. “ May I bring to your notice the rapid and enormous growth of industry in Canada? Although originally and largely a primary producing country, manufacturing is greatly encouraged by the Canadian Government, and now provides an immense field for the investment' of capital. At the beginning of the twentieth century the capital invested in Canadian industry was 1 10,900,000 do!; at the conclusion of ’’C war it was 3,330.000,000d01, and in "'29 was over five billion dollars. These ~ures show an increase in capital out■v of over 10 times in 29 years, and rnish an object lesson in industrial voltcss to a country like New Zeaard.

“ While in Canada in 1930 f took the opportunity of seeing through many of the largest industrial plants of that dominion and of making contact with the Federation officers irt- Toronto, Montreal, and Vancouver. A very strong organisation is maintained for the purpose of promoting the interests of members and unity throughout the various associations, and many of yrou know of the wonderful exhibition which displays Canadian manufactured products annually in the permanent grounds at Toronto, one of the largest sets of exhibition buildings in the British Empire. “ A feature of-the Canadian Manufacturers’ Federation is the number of manufacturing trade groups who have their work undertaken by the industries officers, who are efficiently equipped in information relating to tariffs, trade awards, and conditions affecting each section of industry. ‘‘Australia’s progress in inanufac--taring while not;.so great, has shown similar and rapid development under progressive Government encouragement and-,the retaining of the largest portion of the home market for the goods that can be made in the Commonwealth. ! On .my visit to Australia last November, 1 found that similar conditions to those in Canada prevail, in Melbourne, at the headquarters of the Victorian Chamber of Manufacturers, the chamber possesses its own buildings, secretarial work is carried out for approximately*72 different trade organisations, and the Manufacturers’ Insurance Company has assets totalling approximately half a' million pounds. Australian industries have made "rent strides in the last 20 years, and' in almost every industry, factories are to be found, equal in efficiency and technical knowledge to similar industries in. Great Britain, Canada and U.S.A. Both Canada and Australia have developed an industrial as well as a farming psychology, and manufacturing has received encouragement beyond anything- we have received in New Zealand. In saying this, however, 1 recognise that the Government of New Zealand has now awakened to a realisation of the importance and place of industry in our national life, and in the solution of our national problems. From the statement made by Mr Coates, then Prime Minister, the opening of the New Zealand and South Seas Exhibition in 1925, right up to the present time, Ministers oi the Crown and members of Parliament, have, on; the whole, been making appeals to the people for the support of New Zealand industry and the purchase of New Zealand goods. Beyond this—what 1 might term the sentimental appeal—is the need for a sane and practical State policy to foster and protect industry to achieve the very objects which Ministers of the Crown have been urging -in their speeches. Breat Britain.—Manufacturing in Great Britain is responsible for a very large share of the returning prosperity referred to in a recent optimistic survey of Britain’s trade position by Mr Walter Runcinian. President nf the Board of T vade

“ The figures of Great Britain’s trade show enormous growth, and Mr Runciman attributes the increase to the use by Great Britain of tariffs, which brought £20,000,000 to the Exchequer in one year. ‘ The tariff,’ said Mr Runciman, ‘ has secured for British manufacturers their domestic market and stimulated production, which shows an increase of 7.10 per cent, over the same quarter for the last year. “ In addition to this, recent cables from London show that during the last 12 months 370,000 employees have been absorbed into existing industries and 9.000 into new industries. Apart gether from tariff questions, it is gratifying to learn that Great Britain’s general trade position is steadily improving, and to know’ that in her recovery she has set a standard for sound Government, and that her financial methods have been a triumph over the inflationist policy of certain American and European countries. DOMINION PROGRESS. “ I have specially referred at some length to English, Canadian, and Australian manufacturing as an object lesson of what can be proportionately donein New Zealand with the population we have and the large number of people we could employ if industry was developed. “ A careful estimate now shows that during the last 12 months 9,000 workers

have been absorbed into manufacturing in this Dominion and 3,000 for the previons 12 months, or a total of 12,000 for two years. Industry therefore, contributed in no small measure to the solution of pur unemployed problem, and, speaking recently at Dannevirke, Mr Bromley, of the Unemployment Board, stated that ‘ our figures of unemployed will never fall below 30,000 unless we give encouragement to the secondary industries of New Zealand.’ ■lf we can repeat the performance of the last year we would reduce the present numbers of unemployed by one-filth and relieve the State of 'a heavy financial burden and the public from heavy taxation. “ Despite the opinion of our leaders in Parliament, of the chairman of the Unemployment Board, and the figures of those put back into permanent employment in industry, Mr A. H. Allen, in his presidential address to the Associated Chambers at Napier three weeks ago,- deprecated the value of the manufacturing industries to the unemployment problem, and stated that our future success and prosperity depended mainly upon the prices for fanners’ products sold in the markets of the world. “ 1 find it necessary to challenge this statement, and to point out that our success and prosperity depend upon our total national income, which consists of the prices obtained for our exports, less

interest payable overseas, and plus the value of all the goods and services produced and consumed in New Zealand. “ According to the latest official figures for the year 1933-34 our total national income amounted to £100,000,000, of which £98,800,000 was represented by the production of commodities, and the balance by payment fox personal services.' During the same period the value of our exports was £46,000,000, which was only 46 per cent, of our total national income. _ I hope this will remove the popular misconception in regard to the matter. “ We do not seek to minimise the great value of our primary industries and our export trade, but we do refuse to accept the statement that further development of our secondary industries is not linked up with the country’s future success and prosperity. The farmer who is producing for the Dominion market is contributing' just as much to our national prosperity as the farmer who is producing for the export market, and I cannot over-emphasise the fact that, with the trend in all countries in the world , to economic nationalism and the curtailment of our overseas market, we will have to rely more and more upon our domestic market to absorb our own products. The secondary industries arc now playing, and will play an increasing part in the provision of that domestic market for our farmers. The experience of the United States, Canada, and Australia shows that during the last decade or two work on the land demands a decreasing percentage of our population, and that under modern conditions work is provided more in the factory and less on the farm. New Zealand is passing through a. similar experience. “ Mr Allen’s suggestion that primary producing countries will bo the happiest in the future is entirely disproved by modern trends of development. The countries that have been hardest hit by depression are those that relied upon primary industries only, while those like Australia, Canada, and in some measure our own Dominion, that have gone for a balanced development of primary and secondary industries, have made the quickest recovery. The day has long passed when a country can progress on primary industries alone. TARIFF POLICY. “ Tariff policy does and must continue to play a big part in the progress of our New Zealand industries. In 1933 the most important event affecting our New Zealand industries was the findings of the Tariff Commission under the Review of Article 8 of the Ottawa Agreement and the presentation of these findings to Parliament. While comparisons with other dominions, notably Australia, showed that reductions of any amount were unwarranted in the case of the New Zealand duties to Great Britain under the multi-lateral agreement where equal concessions were granted to each dominion in the British market, yet we came out of the tariff inquiry better than might have been expected, in face of the strong and hostile campaign conducted by certain sections and organisations against any protection of New Zealand industries whatever, and even for the adoption of complete Frcetrade. “In an editorial of April 7, the Dominion’ stated; ‘ Freetrade within the Empire is beyond the bounds of practical politics; but in view of the trade figures for New Zealand to-day the suggestion that we should have three general Customs classifications— United Kingdom, British other than United Kingdom, foreign—has a great deal to commend it.' Goods that could not be produced in New Zealand could be admitted duty free, but to bring in goods that are produced efficiently, and with good quality, in the Dominion, is both uneconomic and unsound. Our secondary industries, as well as our primary, must be safeguarded and developed ; otherwise our unemployment problem will be gravely accentuated, and our whole community suffer. It does in fact bear out our own advocacy of urging the public of New Zealand to purchase their goods in the following order :—New Zealand first, United Kingdom second, other Empire countries third, foreign last. That we are already doing our share in supporting Empire trade, and particularly trade from the United Kingdom, is borne out by the figures for 1934, which show our total imports of £27,000,000, of which £20,400.013 was from Empire sources (75.70 per cent.'), and £13.873,627 was from United Kingdom (51.40 per cent.), and most of the millions imported from foreign sources consisted of goods not obtainable from British sources. Taking 1933. the latest available figures, we purchased from Great Britain £6 4s 2d per head of population,. against Australia £3 4s 4d, Can-

ada £1 13s 6d, Denmark £3 5s 4d, Argentine, £1 Is lid, and the following year our total imports from Great Bntain increased, while foreign imports declined. New Zealand purchases more per capita from Great Britain than any other country in the world. AUSTRALIAN TRADE. “ Australia-New Zealand trade has also been the object of cussion this year. Kvery New Zealando would, no doubt, support closer trade relations with our sister Dominion, but not at the expense of Great Britain and not on a balance heavily r in favour of Australia. While anxious to assist our farmers to retain their overseas market wo are not prepared to see the benefits and concessions granted to Great Britain pass into the hands of any dominion which is taking a comparatively small proportion of our goods. In this attitude I believe the farmers of the Dominion will join hands with the manufacturers to see that what we are compelled to import and what we cannot make in New Zealand should come as far as possible from our best customer, Great Britain. “ In 1930 we imported 6.8 per cent, of our total imports from across the Tasmau; Inst year Australia sent in 10.3 per cent, of our total imports, an increase of 3.5 per cent in four years. But while over 10 per cent, of our imports came from Australia, the Commonwealth took loss than 4 per cent, of our exports in return and the balance of trade is still heavily in favour of Australia. “ lit every conversation it should be the duty of the New Zealand Government to see that_ sufficient tariff is placed on Australian imports • of manufactured goods for the purpose of: —(a) Preventing the flow of required imports from Great Britain into Australian hands; (b) providing sufficient protection to Now Zealand manufacturers against Australian imported goods. To this end the Government might well consider the free ad,mission of Australian citrus fruits which our people require, and at the same time impose on imports of manufactured goods a scale of duties higher than that imposed on corresponding imports from the United Kingdom. In this way we could assist Australia with imports which we require and protect Great Britain with her trade on this market. This is rendered the more necessary’ when it is considered that, with freight and exchange taken into account, Australia enjoys a benefit on this market over Great Britain of approximately 15 per cent. “ I am not condemning Australia s internal policy, which she finds beneficial to her farmers and manufacturers; I merely desire to draw attention to the fact that, as the position stands today, Australia cannot expect an easy market in New Zealand for her manufactured goods. , . Considerable and serious competition is suffered by the New Zealand manufacturer from other countries, both Empire and foreign from which we are importing greater quantities of finished goods than' are warranted by the amount of our export trade to these countries. Two examples are Canada and Japan. JAPANESE COMPETITION. “For the 12 months to June 30, 1935, imports from Japan increased to £983,752, from £724,797, and for the same period exports from New Zealand to Japan decreased from £865,069 to £409,979 —an increase in imports of 35.73 per cent, a decrease in exports of 52.61 per cent. Two years ago the federation discussed the question of Japanese imports, at our annual conference, but as Japan was then purchasing more of our production than she was selling to us, it was felt that wc could not fairly, even in self-de-fence, prejudice the Japanese market for our exports of primary products. What then appeared to bo a promising and growing Eastern market has now declined, and our exports have shown a serious drop. It would now appear that we arc faced with a real danger of heavily 7 increasing Japanese imports, to the serious detriment of both the British and New Zealand manufacturer. Furthermore, while two years ago many manufacturers discounted Japanese competition on the score of quality 7, that handicaji lias now been overcome, and the goods being sold to-day are comparable in quality with goods of other countries, and are landed at less than half the price of similar British goods. Information was given last month that excellent Japanese motor cars would shortly arrive in New Zealand and sell at £l5O, while under the Ottawa adjustments, New Zealand has given special preference to encourage the sale of British cars in this market. “ We have to admit to-day that the conditions in Japanese factories are better, and the plants more efficient, but it is unfair to ask our manufacturers and our workers to compete against a country with such a low standard of wages in comparison with ours. In addition to this the threat to the British manufacturer on this market is a serious one, and one which will require the serious consideration of the New Zealand Government. A large proportion of the surplus imports from both Canada and Japan, as well as other countries, could with groat advantage to ourselves and our people, be made in New Zealand, or obtained from Great Britain if we could not produce. PRIMAGE. While on the question of duties, I would remind you that! under the Ottawa Agreement the New Zealand Govermnent undertook that the existing primage duty of 3 per cent, ad valorem, now levied on British goods which are otherwise duty free, should not be increased, and should be abolished as soon as the financial conditions permit. It is now three years since that undertaking was made, and in view of the greatly improved financial position of the Dominion, we have every right to ask the Government to now remove the primage of 5 per cent.; in fact, it would appear that in the terms of the undertaking, New Zealand is now obliged to abolish this duty against British raw materials. It is a handicap both to the British manufacturer who exports these raw materials and plant and machinery, and to the New Zealand manufacturer who purchases large supplies of material and plant from the United Kingdom. Its removal can be made to serve the dual purpose of a gesture to Great Britain and a relief to New Zealand industry, and we may 7 hope that the Government will yet act in this direction. INDUSTRIAL DEVELOPMENT. “ Industry in the Dominion is a necessary part of our national progress and development; it is now recognised as a big factor in the provision of employment and the provision of taxation for our national finances. The day has now long past when we could be considered merely a primary-producing country, and prominent Englishmen like the late Lord Melchett, formerly a Freetrader, and Mr W. S. Amcry, when Secretary_ for the Dominions, acknowledged the right of the Dominions to promote their own industries as part of their national development. Our production of manufacturing of approximately £30,000,000 in 1932, one of the worst years of the slump, is an indication of whiit could bo accomplished with an increased

population providing a growing market for the consumption of both our primary and secondary products. With the necessary protection for our industries, production should rapidly increase and unemployment diminish to the general prosperity of New Zealand. Already there arc definite signs of recovery in trade in Great Britain and other parts of the Empire, .and with wise legislation New Zealand should secure her share of this recovery. CONCLUSION. “ In 1933 almost half of the total production of meat and over one-third of the total dairy produce was consumed in New Zealand. With our available resources of coal, electric power, and raw materials, the time is ripe for a strong forward policy by the investment of new capital in industry 7 and the increase of our population, even by immigration if necessary, but after the large proportion of our. unemployed have first been absorbed back into permanent work. In this way will be built up a stronger and larger market for the consumption of our products. In stating this lam aware that there is a wide divergence of opinion regarding the policy of immigration. 1 can, however, see no other solution to the problem of consumption of our increasing farm and factory products, than a larger consuming market in our own country.”