Farmers’ Case For More Buying Power For People

Greymouth Evening Star, 12 July 1947, Page 2

Farmers’ Case For More Buying Power For People

(P.A.) WELLINGTON, July 11. Submissions to the Court of Arbitration by Mr K. McL. Baxter, on behalf of the Federation of Labour, were the subject of extensive comment by Mr A. P. O’Shea, who addressed the Court on behalf of the Federated Farmers of Ndw Zealand. Mr. O’Shea referred to the effect of the Industrial Efficiency Act in granting monopolies, and to import and exchange control, saying that the admission" of a proportion of goods would be an excellent check on the efficiency and management of New Zealand undertakings. In conclusion, he quoted at length from the annual report of the national executive of the Federation of Labour. He said he understood this report was not adopted by the federation’s annual conference, but added that it demonstrated that the thinking men in the Labour movement had the same outlook as the thinking and solid people in other sections of the community. Absorption of Costs “It is claimed by the Federation of Labour that New Zealand industry can well absorb considerable additional wage costs not merely by reducing profits, but by increasing managerial and technical efficiency.’ It is rather difficult to see how New Zealand industry can well absorb additional wage costs by reducing profits. In view of a shortage of raw materials, and also of power and fuel, it does not appear that turnover can be expanded to any very considerable extent in the near future. _ But to pay additional wage costs, it should be clear that more money will be required by industrial and trading concerns. It would need very considerable and very increased managerial and technical efficiency to absorb the percentage of wage costs which the increase of £1 a week would -require, and also to reduce profits at the same time. Mr. Baxter’s statement submitted that the shortage of goods had combined with the cost-plus system of price fixation to foster a certain indifference on the part of management, and that profits were being earned regardless of efficiency, Mr O’Shea continued. It should be pointed out that a good deal of trouble in New Zealand was caused by the fact that allegedly-controlled monopolies were set up through the Industrial Efficiency Act, and through import and exchange control. Price Control

Mr Baxter also contended that price control had not operated overall as rigidly as the control of wage levels. It should be pointed out that that is inevitable. Initial movements affecting wages took their rise solely within New Zealand, whereas the same could not be said of movements affecting prices, as raw materials particularly had to be imported from abroad. , . , 4. Referring to Mr Baxter s statement that “one of the consequences of too rigid a stabilisation policy could be the relative submerging of one section of the community,” Mr Obhea said it should be borne m mind that persons other than wage earners and traders and businessmen and the producers of the community must be considered. First, there was the question of persons on fixed incomes, such as pensioners. It .was grossly unfair that the position of those people should be lost sight of. There was another matter which had considerable bearing on the Government’s effort at rehabilitation. The Government was endeavouring to purchase single-units dairy farms and sheep farms on which to settle returned servicemen. It was having considerable difficulty in doing so,

largely because of the inflationary position and the taxation position. It had been computed that to enable an elderly farmer to retire, and to place himself and his wife in equally as favourable a position as a man and his wife who owned their own house, and who were on social security, the farmer would have to have a sum of. £14,500. Shortage of Farm Equipment Mr Baxter’s statement that primary industries generally entered a postwar period well-equipped to deal with future contingencies was not correct, he continued. There was a huge amount of deferred maintenance required on nearly every farm in New Zealand. Water piping, for instance, had been unprocurable or virtually unprocurable for a long period. Wire and fencing posts had been in exceedingly short supply. The following shortages were immediately necessary for urgent replacements: wheel type tractors, 2500; crawler tractors, 1200; crawler or wheel tractors, 1500; automatic pick-up balers, 400; power mowers, 1900; combined siderack and tedder, 600.

“The Federation of Labour also suggests that New Zealand will in future be in a position to drive a good bargain on the world markets," Mr O’Shea said. “I would ask, in reply to this,, can we expect to sell butter in England for 2s per lb. as against margarine at 9d? If the federation’s application is acceded to, will not this problem be intensified?” Mr O’Shea quoted extracts from the report of the" executive of the Federation of Labour. ”A few of our members claim that, as there exists a sellers’ market for both the produce of farmers and the labour power of workers, opportunity should be seized by to cash in for allround wage increases,” stated the report. Your national executive cannot agree with this false policy. An increase of £1 a week in the rates of salaried and wage workers, as advocated by a few so-called “militant” workers, would involve an increase in the note circulation of £40,000,000 a year. The releasing of -so large a volume of money without a corresponding increase in the volume of goods would mean inflation, with all its tragic effects to the economy of the country. “Inevitable Fall”

“With an increase in the volume of primary products by all countries at the end of three years there must be increased competition for markets, with the inevitable fall in prices. A long spiral slide in the price of primary produce overseas, and a complementary drop in wage rates as a result of ‘cashing in,’ and forcing up the cost of production, is a false policy charged with boomerang consequences. A struggle for increased wages through a policy of ‘cashing in’ while the present-day shortage of goods exists is not a means to even making inroads on the wages system, but is a futile effort of chasing the price of commodities produced, and, in the main, fixed overseas. Whether we like it or not, the economy of New Zealand is based on its grassgrowing, animal, fat producing and exporting potentialities. There is no other way of increasing the volume of imported goods required, except by increasing the volume of primary products for export. Many of the goods produced in New Zealand are dependent upon supplies of imported raw materials, which are paid for by exported primary produce.” Mr O’Shea added: “I.would suggest to the Court that the sentiments I quoted are more ably expressed than I could have expressed them myself.