BASIC INDUSTRIES

Manawatu Standard, Volume LVIII, Issue 231, 29 August 1938, Page 6

BASIC INDUSTRIES

CLAIMS OF AGRICULTURE.

FACTOR IN ECONOMY. “The primary industries are the basic industries, and they should be the base on which the other industries in New Zealand are founded. As we are so dependent upon our primary industries, and, therefore, so dependent on overseas markets, and as the probability is that this state of affairs must continue for a very long time,' I would submit that the only satisfactory soluion from a national point of view is to make our economy fit in with the needs of the basic industries. That is, instead of trying to insulate New Zealand, which on the face of it is absurd, we should endeavour to make our economy as elastic as possible and as responsive ns possible to overseas influence.’* In these terms, Mr A. P. O’Shea, Dominion secretary of the Farmers’ Union, succinctly summarised his thesis in an address to members of the Palmerston North Rotary Club, to-day, when ho dealt with the future of the farming industry in the Dominion. Mr O’Shea, who spoke at some length, traversed the relative importance of farming pursuits to Now Zealand’s economic welfare and claimed that progress could be effected only if basic industries were assisted.

“To hold a place in the world’s markets New Zealand must aim at quality, and she must also aim at cheapness. She-'must be prepared to feed the people of the world better and cheaper than anyone clsp can do it,” Mr O’Shea declared. “Surely it is a laudable desire to try to give the public cheap and wholesome food. In their turn the public of New Zealand must be prepared to share with the farmer his periods of adversity, and the farmer must lie prepared to share with the rest of New Zealand his periods of prosperity. New Zealand must bo prepared to afford the farmer and the rest of the community cheaper and cheaper costs, for it is only in this way that the products of science and invention and improvement in industry can be handled on to the great mass of the people. If people can obtain more with their wages, then they are better off, and no one can take that improvement away from them. If one looks at the great businesses of the world, one will see that they have prospered because they have given the people better and cheaper articles.

CHEAPER PRODUCTON. “The New Zealand farmer has produced better goods all along the line but he has not produced more cheaply. He has not done this mainly for the reason that New Zealand has been pursuing a policy which lias not been in the interests of the fanning community, nor, in fact, in the interests of the community as a whole. 'The task before us in the future is to devise an economic system which will retain money wages as near as possible at their present level, but which will give people cheaper and cheaper goods, that is to say, a policy which will make available to the people the fruits of science and invention. It is no use thinking of shorter hours until there is a sufficiency of commodities for everyone in the country. From time to time one hears references to ‘poverty in a land of plenty’ or ‘the richest little country in the world.’ In the January Abstract of Statistics the total value of production in New Zealand for 1936-37 is given as £136,100.000, or £B6 per head, and it should be kept in mind that nearly £12,500,000 of this was for building construction, which would leave something under £BO per head of consumable goods available for distribution. Even granting that a large proportion of our population is children, it should be manifest that this is a very small amount per capita, and it should also be evident that, if we desire a higher standard of living, it is absolutely essential that we produce more goods. “We can do this.'’ proceeded Mr O’Shea, “by producing more and cheaper goods, that is by increasing our competitive power in the markets of the world, and to do this it is essential that we have low costs; there is no other way in which this can be done. It cannot be done by increasing the farmer’s costs without bis return, and it should be apparent to everyone that at the present time there is no incentive to the farmer to increase his producion. When the farmer’s production increases his income should increase, and the income of the rest of the community should increase, for the aggregate income is increased.

WAGE REGULATION. “What I suggest, therefore, is that the wages of the rest of the community, and the basic rate of interest, should be regulated so that they increase or decrease in accordance with the fluctuations in the value of our exports,” Mr O’Shea stated. “This is the only way in which we can keep our currency stable, and it is only by this method that we can keep the farming industry u a stable position. New Zealand by now should have learned the futility of high wages and short hours, which have meant only more unemployment. There is work to be done on the farms, and if we can produce cheaply enough we can sell our produce. The future of New Zealand is wrapped up in the future of our industries producing consumption goods, and the farming industries supply 65 per cent of our production. Unless we discover large supplies of oil or some other mineral, it would appear that this will be the case for a long time to come. New Zealand can progress only if her basic industries progress, but she will not progress if the economic policy of the country is designed to strangle them,” concluded Mr O’Shea.