ECONOMIC SURVEY

Evening Star, Issue 24160, 2 April 1942, Page 6

ECONOMIC SURVEY

HIGH PRODUCTION FIGURES IMPROVEMENT IN EXPORT POSITION (Special.)- WELLINGTON, April 1. The judgment of the Court of Arbitration, as given to-day by Mr Justice Tyndall, granting an increase in wages to award workers, states, inter alia: “ In regard to production generally, it is regrettable that the figures for the value and volume of total production for the production year 1940-41 are not yet available, but from recent indications it now seems fairly certain that the total value,will be easily the highest on record. It is not possible at the present stage to predict with any degree of certainty that the total volume will also prove to be a record. “ For the calendar year ended December 31 last the figures for exports indicate a slight improvement compared with the position for the first 10 months of the year, and from information available it would appear probable that the figures for January and February of this year will show that the value of our monthly exports is being maintained in a remarkable manner. The position in regard to imports also improved up to the end of December. The relative position in regard to imports has improved still further since December, but the extent to which goods imported' for defence purposes arc responsible is unknown to the court.

“ While the exact position in regard to primary production varies in different districts, the information that is available to the court docs not lead to the belief that the final results for the production year for the Dominion as a whole will be other than satisfactory. The latest information available concerning factory production indicates continued expansion, but no doubt at the same time the proportion of such production devoted to local civilian needs is on the decline. The latest figures for .sales tax receipts indicate that, retail trade is certainly not languishing. REDUCED STANDARD INEVITABLE.

“ In regal'd to the standard of living, the court has already expressed tinview that, as a result of-the war and our war effort, a reduction in the standard of living of the community is inevitable. The value and volume of goods available for civilian consumption in New Zealand have decreased and must continue to decrease. It is contended on behalf of the employers that in these circumstances an increase in wage rates is unjustified. In spite of this view, the court is satisfied that in the past few months wage rates in many cases have actually been increased, due, no doubt, to increased demand for certain classes of labour which are in short supply. It must he remembered that the court does not fix the rates of wage actually paid; its function is to fix minimum rates only in those industries covered by awards. INFLATIONARY TENDENCY. “ It is considered that the purchasing power of the civilian community, due to increased wages and to increased hours at overtime rates, has been increasing, while the value and volume of goods- available for civilian consumption have been decreasing. This reveals an inflationary tendency. The activities of this court', however, during the period in question can have contributed to that tendency only to a microscopic extent.

“It would appear that inflationary effects of wage increases can under'present conditions only be effectively controlled by the imposition of a ceiling upon wages rates. Steps of this nature have been put into operation in certain other countries, in some cases coincidentally with restriction upon profits. “ It is pertinent to point out that in England, in spite of most drastic reductions in the values of goods available for civilian consumption, wages are being regularly and continuously increased. It is noted, also, in England that an ever-lowering standard of living is in contemporaneous operation with an ever-increasing wage scale. STABILISING PRICES. “ Following upon the recommendations of the Economic Stabilisation Conference, the Government took_ action to stabilise the prices of 38 es-’ sential commodities as from September ], 1941, The retail prices index for August, 1941, was 1,073. The figure for January, 1942, was 1,094, an increase of 21 points in the five months following the stabilisation of the 38 essential commodities. The retail prices index for March, 1941, was 1,057, or 10 points fielow the August figure. Consequently in the five months following the first instalment of price stabilisation the retail prices index advanced at an appreciably faster rate-than in the five months preceding the Government's action. In the face of such price movements, which have obviously not been brought about or influenced to any appreciable extent by increases in minimum award rates of wages, it is not difficult to understand the repeated applications for wage increases which reach this court.”