MOTOR INDUSTRY

Manawatu Standard, Volume LX, Issue 216, 10 August 1940, Page 9

MOTOR INDUSTRY

DIFFICULTIES SET OUT. RATIONING AND CONTROL. Conditions in the motor industry in New Zealand were placed before the Minister of Finance toward tho end of July, with recommendations for the alleviation of the adverse state in which the industry finds itself as tho result of the rationing of petrol and its resultant repercussions, and the restriction of imports. Details of the position have now been released for publication by the motor industry.

Prior to these representations being made the New Zealand Garage Proprietors’ Association placed before the Government requests that an increased margin of profit be allowed on the sale of petrol and also a request that supplies of petrol bo made to commercial users through the resellers. It is explained by the Motor Trade Federation that, since last September, the motor trade and its associated enterprises have had abundant opportunity of appraising the effects of petrol restrictions upon the public and on their own businesses. Six times since the war began the petrol restrictions have undergone a change of one kind or another. On three of these occasions the motor industry was brought to an abrupt position of facing drastic curtailment of business and the possibility of severe losses and unemployment. PETROL BASIC COMMODITY.

It was explained to the Minister at the interview that because petrol is a basic commodity, essential to the defence and welfare of the Dominion the need for control and some form of regulation is fully appreciated. But also because it is a basic commodity, the regulations, it is contended, should not be such as to cripple the motor industry, cause unnecessary embarrass ment to normal commercial activities, and fail to meet the reasonable requirements of the public. The opinion of the industry is that a grievous hurt has been done to motor businesses and others dependent on reasonable supplies of petrol, while the public have been subjected to needless embarrassment.

The basic cause of this was given as the ' desire to restrict monthly usage to 6,000,000 gallons of petrol. This was not the sum total the Dominion could get, but it appeared to have been taken as a reasonable objective. Efforts to compress the country’s reasonable requirements to this total had resulted in unemployment and had caused hardship and distress. Having this result in mind, and, after studying the requirements of the industry, the Motor Trade Federation put forward a. suggestion that 7,000.000 gallons a month should be the total sought in the petrol regulations. Emphasis was laid on recognition of the need of conserving overseas funds, and it was outlined that the extra 1,000,000 gallons a month would cost the country another £400,000 a year. For the Government’s own taxation revenues the increase would provide £736.000 in petrol tax, and over and above this there would be revenues accruing from the increased use of transportation. Figures were onoted to show that 32,000,000,000 gallons of petrol were used in the world . each year. 1.995 000,000 were used in the United Kingdom in 1938, and then the 12.000 000 gallons suggested for New Zealand were shown ns a trifling amount. Actually, it represented only six-tenths of one per cent, of only the United Kingdom’s yearly requirements. To the motor industry of kf" Zealand, however, it was the difference between reasonable operation and employment and gradual extinction for a large part of the industry. DESTRUCTION OF ENTERPRISE.

The prevention of waste and not the destruction of a productive enterprise was quoted as the reason for the imposition of petrol restrictions. For the financial year ending March, 1940, it was estimated that the industry, its' .dealers, and the oil companies (not counting employees) would pay over £10,000,000 in various taxes, income tax, social security tax, sales tax, customs duty, land tax, vehicles tax, stamp taxes and local rates. Thus the amount would l>e a large share of the £54,000,000 in taxation the Government proposed to collect. As against the saving New Zealand would effect in her own economy through petrol restrictions the suggestions were advanced for consideration that greater production (both primary and secondary) was needed in New Zealand, taxes had to be collected and the ability to pay had to be existent. Unemployment would not assist in the provision of taxation payments, the Public Works programme depended on taxation ana even if New Zealand restricted her importations of petrol to as much as 30 million gallons a year, would this amount make_much difference as compared with 1,995 million gallons for the United Kingdom? •Statements were qnoted from the English Motor of June 6, 1940, as follow : “The only British Dominion which has seriously interfered with the normal use of petrol is New Zealand.” Tho opinion of the trade generally was that the loss of business was not justified, that the stock position in New Zealand had not benefited, nor had the war position been improved commensurately with the huge sacrifices made i>y the motor trade. ' Following the petrol restrictions, publicity had been employed to con-

serve the uses of petrol and this was termed as adding’ insult to injury by representing that the using of the small amount of petrol allocated was unpatriotic. To the motor trade the effect of this propaganda was disastrous. Tho reduction in the sales of petrol from some stations was given as being as high as 65 per cent. IMPORT CONTROL.

Tlic extent of the motor industry in. New Zealand was also outlined and. it was pointed out that the transportation system so provided operated a total of no less than 885,293,630 vehicle miles in the year ended March 81,' 1938. To keep this transportation system moving no fewer than 40,000 employees were engaged in the motor industry, and the greater proportion of this number were adult workers. Motor vehicles were an important source of revenue to the Government, and in the financial year closing on March 31, 1939, the Consolidated Fund benefited from the motor industry to the extent of more than 17 per cent, of its receipts. The belief was held that, could all the forms of taxation shouldered by the industry be computed, the total would be at least 20 per cent, of the Government revenue. • Reasons were advanced for the high percentage of motor vehicles in proportion to the population of New Zealand when compared with that of other countries in the world. It was pointed out that the high standard of living had contributed to this, and the population density in New Zealand was but 15.7 per square mile with a maximum density of '29.1 compared with 43 per square mile in the United States and 742 in England. Another factor in the high proportion of vehicles owned was that over 64 per cent, of the population was over 20 years of age, therefore coming within the groups which owned motor cars. However, over 34 per cent, of the motor vehicles and more than 45 per cent, of the commercial vehicles were imported prior to 1931 and these percentages would show rapid deterioration from now onward and would soon, by modern standards, be obsolete, this being particularly so in regard to the commercial vehicles. Over 36 per cent, (combining the two) of the vehicles were more than ten years old. "While it was possible to. extend the operating life of a vehicle, this had already been done in most cases and it was true also that such an extension of life was achieved only with excessive operating and repair costs. ENGLAND’S TRADE NEED. Imports had in recent years swung in favour of England. In 1934 the imports from the United States totalled 32.17 per cent, of the cars- and 4167 per cent, of the commercial vehicles. By the end of 1939 these percentages had declined to 4.6 per cent, and 14.8 per cent, respectively. The market for motor vehicles in New Zealand was a British market. Eor cars the United Kingdom took 60.9 per cent, of the demand in 1939, 22.53 per cent, of that for commercial vehicles, and Canada took 62.99 per cent. In 1939 the- British Empire gained no less than 92.5 per cent, of the total motor importations with the United Kingdom alone taking 54.4 per cent. For Britain to win the war she had to maintain exports. For New Zealand to assist, in this 6he could buy her motor vehicles from England and for this reason a plea was made that the import restrictions be relaxed slightly in favour, of the motoi industry for the fifth period. It was advanced that the industry should be classified as un essential local industry, permitted to import to the extent of the available overseas funds :and permitted to import its-complete requirements of spare parts and other service materials to maintain the vehicles already in the country.