POST-WAR PLANT

Grey River Argus, 8 January 1944, Page 7

POST-WAR PLANT

replacement question (Special to Argus) WELLINGTON, Jan. 7, Mr W. J. Green, editor of “The Standard,” in a special message -from Washington says:— . . Expressing the opinion that as part of the plan for post-war reconstruction New Zealand should em bark upon the organising of a reserve fund for replacement of industrial plant, so that the Dominion could take its rightful place among the nations of the world.. Mr T. J. Flynn of Auckland, an internation-ally-known engineer, who is in Washington on a Government-spon-sored supply mission, told me to-day that in his opinion industry in New Zealand should be required to set aside a portion of its earnings for post-war development. Mr Flynn who has travelled widelv and is familiar with business practice in Europe and elsewhere, recalled that most large manufacturing firms made a practice of writing their plant off in as short a time as possible and instanced that in Germany, where the taxes were extremely high, the great manufacturing firms were allowed, and did. write their plant down to a nominal value of one mark in each department each year This was in order that, should some contingency arise, such as the development of a new process, the plant could be replaced immediately with more appropriate machinery. Such contingencies did arise and the plants were as frequently scrapped a circumstances which explained ’in some measure the survival of these firms and their growth into world-wide organisations. Admittedly, said Mr Flynn, this was an extreme instance, which, in the present circumstances, was not likelv to be duplicated in New Zealand; nevertheless, it had its lesson for Dominion manufacturers, some of whom gave little thought to possible future development?, though this could not be. said of the majority. Mr Flynn pointed out, however that the present scale of taxation for war purposes was having the effect in some cases of makir- it difficult for manufacturers to do what they would like to do. He advocated that each firm engaged in manufacturing in New Zealand should be allowed to set aside a certain percentage of their earnings free of taxation for plant replacement, the percentage, so allowed to be on a scale according to the industry and its likelihood of changing processes. If at the end of five or six years after cessation of hostilities 'these funds were not used for replacement of plant or if balances were still unused for such purposes, thev should be taxed at the rates ruling during the war period. Mr Flynn asserted that unless something along these lines was done so as to ensure that when the end of the war came New Zealand industry would be ready to meet the challenge of its competitors, the rehabilitation and reconstruction schemes of the Government could be seriously endangered. . Dominion industry, properly guided and assisted, could employ many thousands of those who were now returning from the world s battle fronts, but left to its own devices, or borne down by high taxation, would be unable to face up to the challenge from overseas manufacturers, who were already making their plans for post-war expansion. Import restriction, important as it was as an instrument of national development, might not be a feasible policy after the war in view of the principles proclaimed in the Atlantic Charter, Mr Flynn declared. New Zealand would probably find herself faced with new economic problems in the new world that would follow the war. The best way to be ready for that day and those problems was to plan now for a competent, economic industrial set-up, whiah .could immediately take up whatever tasks the times produced, and which meantime could afford a source of employment for New Zealanders who were entitled to jobs at rates of remuneration that would ensure the maintenance of a decent standard of living. .