Manufacturers Say Price Control Retarding Output

Greymouth Evening Star, 7 April 1948, Page 4

Manufacturers Say Price Control Retarding Output

(P.A.) WELLINGTON, This Day. “The general policy of the New Zealand Manufacturers’ Federation regarding price control has been that continuance of some measure of control is necessary only until such time as the supply of the various types of goods equates the demand for those goods,” says a statement issued by the secretary of the federation, Mr D. I. Macdonald. “At that point healthy competition on the basis of cost and quality will automatically determine prices without the need for any artificial forms of price control’. In fact, the retention of such artificial control of prices beyond the commercially prudent point may easily delay the otherwise normal downward tendency of prices.” , The statement said that one of the main points of the federation’s disagreement with the Control of Prices Act was that it widened the scope of price control and made it permanent, with no provision at all for the removal of control when the stage was reached where this could be safely done. The federation was strongly of the opinion that the Government slibukl now consider the lifting of price control from those industries or groups of industries where the supply of goods was more or less equal to the demand. “Entirely Incompatible” The continuation of a strict and rigid system of controlling the price and profit margin on each and every individual item was entirely incompatible with normal conditions of competitive trading, the statement continued. Where price control was continued, it was necessary for much more flexibility to be introduced into the present, methods. The statement declared that it was absurd under present conditions that prices should be controlled down to the last fraction of a penny when so many of the component cost items, such as raw material prices and wages, were right outside the control of manufacturers.

The federation felt strongly that the operation of price control had discriminated most unfairly against' the New Zealand manufacturers, who had had to submit masses of detailed information, including a close scrutiny of their accounts for a period of three to five years in support of their applications. They had to submit to onenly admitted profit control, which should be distinct altogether from price control and which could not reflect a true conception of value or efficiency. This policy had done more to disrupt production than almost, any other factor over which, internally, the federation had any control. Imported Goods The statement contrasted the treatment afforded to imported consumer goods where the landed cost was plussed by a fixed percentage and the matter ended. The statement said application of profit control took away the incentive to efficiency or to improvement in the methods of manufacturing and thus retarded progress and initiative and endangered the future stability of the industry or company. .