A CONSTRUCTIVE POLICY

Grey River Argus, 21 March 1934, Page 3

A CONSTRUCTIVE POLICY

For Manufacturers ‘ ASSURED MARKET AND PRODUCTION. (By A. E. Mander) , The following proposals are put forward for consideration by those who feel that there is need for us to adopt some definite plan for bringing order , out of the existing economic chaos, 1 and especially for ending the present absurd situation in which, though all of us want more, yet the production of wealth —which could provide us with more—is actually being restrict- , cd. These ideas are not new; they mo in the air to-day all the world over; and the present writer claims merely to bring them into focus for consideration. The plan coubl not, in any case, hi* put into effect until the expiration of the Ottawa Agreement next year. I- there any general measure of agreement on .the following propositi) We have adequate natural resour- > cos. plant, iiiaidiinory. power and labour Io provide n fair standard of living for the people of New Zealand—indeed, to provide a far higher standard than has ever been enjoyed in (he past, even ■ during lhe ‘‘good years.’’ ' (2) The total l naHonal income i-on-sists of: (a) All the goods mid ser\ ices that we prodin e for consumption in New Zealand, plus (h) all (hat we obtain from overseas in exchange for I h(> balance , of our exports (after paying interest, freights, etc.) (3) We might increase lhe total national income by increasing (a) or (b) or both. At the present time it looks as though any substantial increase of (hi is unlikely. We are thus thrown back on the need to expand (a), which consists of (hose branches of primary production, manufacturing industry and various services which supply the Dominion’s own needs. (4) If we deliberately adopt a national policy of increasing the output of those industries which produce for the Dominion market, such industries should be enabled mid en con raged to improve their organisation. to co-ordinate their operations, and lo plan production on mi orderly and efficient economic (5) The first necessary preliminary is a. survey of the nation’s needs — many pairs of men’s boots; so many pairs of ladies’ shoes; so many blmikels; so many yards of flannel; so any nails, toothbrush os. gas meters, stockings, htwn mowers, etc. etc. This estimate could be based largely on the volume of production phis imports in 1929 mid 1933. (Ti) The secondary prelimnary would be a survev of the maximum capacity of industries, (a) with existing plant, mid (b) with additional plant. It may be noted that if all rn:i nufai't nring industries were producing to lull cajmcity, even with existing plant, the costs of production would be lowered, and also about 60.0(10 additional work ers would be directly and indirectly employed (assuming the existing ratio of two persons indirectly employed to every one engaged in direct production). (7) Every section of industry should be required to set up n Production Committee, which would be representative of all the uriits engaged in the manufacture of a particular class of commodities. Each Production Committee would Im informed of the estimated requirements of thi‘ Dominion in respect of those types of commodity; and. after reviewing the productive capacity of its section of industry, it would then report that the industry con Id undertake to meet a certain specified production of the Dominion’s estimated requirements. The Production Committees would further be expected to evofve, for each section of industry, some scheme of co-ordination among the various produtcive units. There would lie no attempt 1 at State compulsion or bureaucratic control; and the whole scheme should be placed upon a purely voluntary basis—a basis of voluntary collaboration. Collaboration would be encouraged, however, by the fact that only such industries •as had evolved satisfactory schemes would be entitled to the form of safeguarding specified in paragraph 9. (S) It is impossible for New Zealand industries to plan future production on an economic basis if all their calculations are liable to be upset at any time by unexpected inrushes of competing imports. A ♦system of orderly or rationalized production must be conditional upon a reasonably “known’’ market; and this cannot exist as long as we are subject to alternate scarcities and gluts due to sudden floods of imports. The manufacturers of New Zealand arp in a position similar to that of the farmers in England. (9) The Government (or an Economic Council) would therefore prepare annually a list of “restricted imports.” This list would comprise all the types of commodity pro* duced by Dominion industries which had adopted a “Production Committee” scheme (See paragraph 7), and in respect of which certain guarantees as to qualify and price had been afforded. Against each item would be shown the amount of the difference between “estimated requirements” and “estimated production”; and no imports would normally be admitted in excess of this amount. Other classes of imports would be free from restriction, apart from tariff, as at present. ’ ( 0) This scheme would probably not result in a diminution of total im- ; ports. Thorp would be a greater importation of materials for in--5 dustry. Moreover, the spending power of the public would be in-

creased by at least £9,000,000. which would lead to heavier imports of luxuries and goods of classes not manufactured in New Zealand. (11) It should be one of the functions of the Government (or Economic Council, or Reserve Bank) to ensure that there was always sufficient purchasing power in the hands of the public to purchase the goods and services produced and imported. This does not imply acceptances of the Douglas or .any other theory of deficient purchasing power. It merely throws upon some definite authority the responsibility for ensuring that | there is sufficient. Footnote:—The foregoing article is written by A. E. Mander. General Secretary of the New Zealand Manufacturers’ Federation, and is published with the consent of the Federation Council. It must be understood, however, that, pending consideration by this body, the plan is not put forward officially on, behalf of the manufacturers’ Federation.