TAPERING-OFF POLICY ADVOCATEDPRICE CONTROL “OUT OF TOUCH,” MANUFACTURERS SAY

Greymouth Evening Star, 22 September 1949, Page 2

TAPERING-OFF POLICY ADVOCATEDPRICE CONTROL “OUT OF TOUCH,” MANUFACTURERS SAY

. WELLINGTON, This Day (0.C.).— A suggestion’ that the time has ari’ived for. amendment of the method of price control, with the object of ultimately removing it altogether as soon as circumstances permit, has been made to the Prime,Minister (Mr Fraser) by a deputation from the coffiicil of the New Zealand Manufacturers’ Federation. The council, headed by the actingpresident (Mr D. V. Wilson, Christchurch), gave its opinion that in all but a few cases the need for price control had almost passed and that competition would take care of consumer interests. It reminded Mr Fraser that manufacturers had cooperated with the Government and the Aithorities in the administration of price control because they recognised its need until consumer goods approximately equalled public demand. , Recent Developments However, manufacturers were now critical of more recent developments in the administration of that control because, in several important respects, it was operating to the disadvantage of the purchaser. “Delays, frustration, lethargy and discrimination in the administration of pricecontrol, ‘coupled with the lack of incentive,” said Mr Wilson, “all tend to discourage the manufacturer from producing, the best commodity at the most, reasonable price.” The Price Tribunal, it was explained had largely adopted a cost-plus method of fixing prices which often disregarded one of the most important requirements of purchasers, that of quality. Cost by itself did not impart value when it overlooked such intangible factors as good design, colour, and consumer appeal. “From our experience,” said Mr Wilson, “the price control authorities seldom relate approved prices to value, but rely instead primarily upon cost.” The creative standard of industry had thus to be kept within the arbitrary dictates of price control. Out Of Touch

Instances were quoted to demonstrate that price control as administered today was .out of touch with consumer demand and customers’ ideas of what constitutes value. The Tribunal in many instances had granted individual manufacturers prices based only on the profit factor. When the price was fixed at any unfairly low point, production of the article was discouraged and an artificial scarcity created. . . ’ “The present method,” said Mr Wilson, “means the virtual crucifixion of the efficient manufacturer which must rebound in lack of respect for the administration of price, control; and through the inevitable switching of production, will tend to leave the consumer short of essential cheaper lines.’? . . , “ Price control, as now administered,

did not make.allowances for the maintenance of the Dominion’s industries at full efficiency, a dangerous policy from the viewpoint ,of the country’s economic welfare because industry was being compelled to live on its capital resources. Now In Full Supply The Prime Minister was given a list of important commodities, for which there was a wide public demand, now in full supply, and he was assured that the list was being steadily enlarged. That position, the federation contended, justified its suggestion that supply was rapidly becoming normal. The activities of the Tribunal instead of being widened in scope, could be directed with greater advantage to controlling the few lines which were subsidised, or most directly affected - the cost of living, or which were still in fairly short supply.,. “Admittedly,” concluded Mr Wilson, “the effect on the consumer must be investigated when considering the abandonment or continuance of price control. When all the facts are considered, in the final analysis we feel that the consumer must be the loser —the longer control of prices continues —not only from the price aspect, but from the point of view of range of products, quality, and that general service which is his right as the purchaser of our products.”