WAR-TIME PRICES

Greymouth Evening Star, 1 November 1939, Page 8

WAR-TIME PRICES

ADJUSTMENT CRITICISED

[PEB PBESS ASSOCIATION.]

CHRISTCHURCH, October 31

“It is obvious that there must be some alteration in the basis of price adjustment,” said - Mr. S. L. Wright, the president, at a meeting of the Canterbury Manufacturers’' Association this evening. “I feel sure that some means could be found to obviate profiteering, but which at the same time would-allow commerce to be carried on and protect-traders from the inevitable fall in prices when it comes.” Mr, Wright was discussing the recent decision of trie'Minister for Industries and Commerce (Mr. Sullivan) that, price increases would not be allowed to be based on replacement value/ Discussing- taxation' bases; Mr.: Wright ventured the suggestion that if the war lasted three, years,.with prices of-imported .goQd.s advancing .all the time, [then there would be hardly bne business concern in New - Zealand which was not hopelessly bankrupt. The Minister, had. .declined to allow price increases on a replacement basis on the grounds that under such a principle the price of all stocks in New Zealand .of imported, goods would have been.raised quite., considerably and merchants would have reaped a handsome profit,.Mr. -Wright saidr-

“J think all will be with the Minister in his attempt to keep prices down and whilst there- may be a certain amount of truth in the Minister’s viewpoint, there is a lot’ more to be said. I am afraid the Minister has overlooked that the increase in overseas prices may render- it impossible for traders to carry on unless prices are allowed to be adjusted on replacement value. :

“Then there is another matter to which I feel-1 should call attention, and that is the Land and Income Tax Amendment Act;of' last session, as' it applies to- stocks.' The Act provides that stocks shall' in' futitre be taken ‘at cost price, market selling price, or the price at which it can be replaced.’ I consider/this is so unsound that any auditor signed the usual certificate on a balance-sheet in which the stock during war time was taken on that basis and anything happeried' to the company, then, in my opinion, there would be good grounds for a legal action against him on the part of the shareholders, for damages. “The only thing the trader can do undei- this' legislation is to arrive at his profit by taking stock on the basis laid down in the Act, pay the tax arrived at, and then use his own share of the profit to create the reserve necessary to reduce the stock to a safe value. . , . .

“I feel that the question of replacement costs and the question of the basis of stock-taking .for taxation rire interwoven and that our organisation should join with all other sections of the commercial community in an endeavour to have them rectified.”