Control of Industry

Nelson Evening Mail, Volume LXX, 2 October 1936, Page 7

Control of Industry

THE INDUSTRIAL EFFICIENCY BILL PROVISIONS EXPLAINED BY MINISTER CLAIMS SUPPORT OF MAJORITY OF MANUFACTURERS CRITICS FEAR BUREAUCRATIC CONTROL (From The “Mail’s” Parliamentary Reporter) WELLINGTON, This Day. An attentive Opposition and a moderately interested assemblage on the Government benches listened to the Minister of Industries and Commerce (the Hon. B. G. Sullivan) for two hours and twenty minutes yesterday, while he detailed the proposals for the control of industry in his Industrial Efficiency Bill. Urgency was taken fertile second reading, and when the House rose at midnight there had been five speakers in addition to the Minister. The Bill aims at the regulation and control of industry, and according to the Minister, three-quarters of the manufacturers of the Dominion are behind it. Mr S. G. Holland (National, Christchurch North) led the Opposition debate, and attacked the Bill on the grounds that it would bring about the bureaucratic control of industry.

“The issue is whether the old free competition —the law of the jungle with the survival of the fittest —is to continue or whether we are to have an ordered industrial life and the application of the best principle of civilisation to the conduct of industry,” said the Minister of Industries and Commerce (the Hon. D. G. Sullivan), in moving, the second reading of the Industrial Efficiency Bill in the House of Representatives yesterday afternoon. Urgency was taken for the second reading of the Bill, the Prime Ministei explaining that this was for the purpose of enabling the sitting to be continued beyond 10.30 o’clock.

Mr Sullivan said the Bill was necessary in the interests of the country, and the people and was particularly desirable in the interests of the industries of the Dominion. Some measure of the kind was certainly desirable unless they were to shut their eyes to the lessons of the past in regard to some of the industries and neglect the rights of future generations which would be dependent upon the utilisation of the natural resources of the country.

ORGANISATION NECESSARY

The Minister said he felt that if he had not brought the Bill forward it would have been found necessary at some time or another irrespective of which Government was in power, and the longer it was delayed the larger would be the work involved in the organisation of industry and the pieservation of the natural resources. The coal and flax industries were instanced by the Minister as badly in need of control and organisation in order to develop what were great natural assets.

The principles embodied in the Bill, he said, were finding increased application throughout the world. He was not saying that the things being done abroad were in complete harmony with the Bill, but would say that each country was going its own particular way in applying various aspects of the work in regard to coordination and amalgamation of industry, licensing of industry and deciding whether industries should be allowed to start in certain cases. With regard to flax he was making an effort to rejuvenate this industry and restore it to its ancient splendour so that it would be able to play the part it ought to play in the economic development of the country. MANUFACTURERS GENERAL SUPPORT The Minister said he was pleased to say that the manufacturers were giving general support to the measure. Mr W. J. Poison (National, Stratford): Are they asking for licensing? The Minister: Yes. I have received from sections of the manufacturers resolutions approving of licensing, approving of co-ordination and wanting to give general support to the Bill. Continuing, he said he would not say that all the manufacturers supported the Bill, but probably threequarters of them would. The sellers of goods, he said, were having their great difficulties; they were disorganised owing to a superfluous number of competing units which resulted in cut-throat competition. Week after week representatives of industry after . industry waited on him asking for something to be done. They were asking for co-ordination, for cooperation, for the opportunity of conducting their businesses cn principles that would enable them to get some j happiness out of life and enable them J to put an end to the desperate daily 1 cut-throat competition.

WELCOMED WITH OPEN ARMS

Many of them, the Minister added, were already engaged in preparing efficiency schemes and welcomed with open arms the intimation he had given them that the Government intended to put the measure on the Statute Book. There was no sign of any opposition of a substantial character since the Bill was introduced and he was certain that it would be welcomed by a very large body of the business people of the Dominion.

So far as the workers were concerned he had gone further than other countries by providing that representatives of the workers in an industry would be associated with the employers in the preparation of plans. The Bill was intended to produce organisation between all the parties —the manufacturers, the workers and the consumers —for the good of industry and under the parentage and guidance of the State, so that these three sections would be able to cooperate in carrying out plans for the benefit of industry, the workers employed and the nation as a whole.

OF AN EXPERIMENTAL NATURE If it was necessary for industries to have tariff protection and subsidies and assistance from the State it was equally justifiable, said the Minister, and right and proper that the State itself should exercise supervision over the development of those industries. He quite realised that the proposals in the Bill were of a comparatively ex-

perimental nature and he was not going to work to rationalise all industries and keep the Bureau of Industries going day *nnd night. The idea he had in mind was to take one or two industries that were ripe for rationalisation and work out plans that could be used as a basis.

“We have got to move with care and discretion and judgment and not attempt to do too much at once,” he added. “As we go along we will gain experience as to what is best to be done. I want it to be successful and I want it to contribute something of value to industry and the country.”

FRAMEWORK FOR THE SOVIET SYSTEM

Mr S G. Holland (National, Christchurch North) said the Bill could be interpreted as providing a complete framework for the Soviet system except that private ownership was allowed to remain. It wqs not difficult to read into the Minister’s opening speech that the measure was not the last word as far as legislation for industrial control was concerned, and he had admitted that the Bill was a substantial experiment and that if the proposals were wrongly applied they could be of great danger. Industry in New Zealand or any country was not in a position to take a risk in respect to dangerous legislation. A Bill with dangerous potentialities should be sent back to the Government for further consideration.

Outlining a growing agitation for some measure of control of industry which he said commenced early in the depression period, Mr Holland said that business concerns had experienced difficulty in making ends meet. There had been a struggle for existence. Prices had been cut, sales efforts increased and sales conditions extended, and manufacturers had considered that they might get some form of Government assistance in the matter of licensing, a form of control that made an appeal to manufacturers as it suggested restriction of competition.

AN INDUSTRIAL DICTATOR' Taking industry by and large it was reasonably efficient in the Dominion There was room for improvement, however. Pernicious practices had been introduced in respect to distribution. He instanced sellers of tractors giving away a set of disc harrows, and he asked how could a local manufacturer compete with an overseas manufacturer who adopted such tactics. He believed a real live bureau could render immense service to industry, especially in an advisory capacity and it could also be of great service to the Minister. It should co-operate with the Department of Scientific and Industrial Research. He was sure that industry would welcome with open arms the establishment of an i trial bureau along those lines; but when it came to handing over the management of industry to a bureau it was a different story. While- giving due credit to the efficiency of civil servants he did not see that they had the qualifications to guide industry with the Minister super-imposed as an industrial dictator, SOCIALISTIC CONTROL Mr Holland said that the Minister desired to see efficiency brought about by State control which would endi in State ownership and direction. With a little assistance from the Government along the lines of guidance he believed industry would prosper, but the Bill made it possible for any industry to oass directly into the hands of State control through the Minister and through the civil service. If the scheme of socialistic control of industry failed, private enterprise would bear the entire loss; but if the scheme succeeded the profits to private enterprise would be definitely limited. There would be limits to productiqn, the type of goods to be produced and to profits. It was incorrect to say that industry had given the Bill general support. . The Minister of Internal Affairs, Mr Parry: “Are you speaking on behalf of the manufacturers?’' Mr Holland: “I am speaking on my own behalf.” Mr Holland went on to say that at the back of the support given by the Manufacturers’ Federation was a promise by the Minister to bring down a number of amendments. The Minister: “Anything I have promised definitely is in the Bill. I have made no promise of any kind other than consideration of what may be suggested in this House.” Mr Holland persisted that amendments had been promised to make the Bill more acceptable. The Minister: “No. The ton. gentleman’s memory is at fault.” Mr Holland continued to refer to promised amendments and asked what about members of the House? The Minister: “Does the lion, gentleman not accept my word?” Mr Holland: “The Minister is said to have promised amendments.” Mr Speaker: “The hon. member must not make reference to reports in the newspapers.” Mr Holland said if there was an understanding between the Minister and the Manufacturers’ Federation it was wrong. The Minister: “Will the hon. gentleman take it from me that anything I have promised is already in the Bill apart from the general indication that ! will consider proposals made in this House?”

Mr Holland said he had never ques-

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MEASURES”

tioned any member in the House, and he would not question the Minister’s statement. NO APPEAL UNLESS MINISTER APPROVES Mr Holland said that if it were good enough for the Government to assist the agricultural industry from the general funds of the State it was only fair that the Government should contribute to the cost of planning proposed under the Bill. The dictatorial powers of the Minister were disclosed in the provision that a person could not appeal against the decision of the bureau 1o the Minister unless he obtained the Minister’s sanction. That seemed Gilbcrtian. The Minister was to be the dictator of industry. PLANNING, NOT MANAGING Mr T. H. McCombs (Government, Lyttelton) said that there was a lot of difference between managing an industry and arriving at the plan under which it should operate. The Bureau would decide the most satisfactory plan, and the industry would then be left to settle its own affairs. The control was simply laying down the olan, and did not involve the details of the process. Many countries to-day were adopting industrial planning on similar lines to that advocated m the Bill'. The Government did not intend to allow any industry to “farm” New Zealand for its own purposes. It was proposed to rehabilitate industry by rationalisation, standardisation of production and by scientific research and scientific methods. VERY WIDE POWERS GIVEN Mr W. J. Poison (National, Stratford) said the responsibility of the Government was not merely to some particular industry, but to the people who had created the opportunity ror that industry. What, he asked, would an avowedly Socialistic Government do with the great powers given in the Bill 9 He believed that a greater measure of co-ordination could be brought about with benefit to the industry. The Government officials on the Bureau would be entirely under the thumb of the Minister, and they would know nothing about industry. He criticised the proposal to make levies without the authority of Parliament, and said it amounted to extra taxation imposed without the knowledge or consent of Parliament. He said the powers taken by the Government under the Bill were greater than those taken by any other country. He said the legislation was not a bad initiation of the German plan. The proposals were not new, but had been tried out in the times of the Tudors and their successors. There were powers in the Bill that would have serious consequences in industry, and there were powers that would stifle free competition. It was a nationalisation of industry and not rationalisation. The Bill, he was afraid, might lead to chaos, and he thought the country might yet need a Cromwell to save it. It was a tragedy, and the results would not be what the Government expected. BRINGING ORDER OUT OF CHAOS The hope that the Bill would become law this session so that the Minister of Industries and Commerce would be able to get to work and bring a little order into the chaos that existed in industry, was expressed by Mr C. Morgan Williams (Government, Kaiapoi).

The object of the Bill, said Mr Williams, was that industry should be controlled, not in the interests of the proprietors but in the interests of the people of New Zealand. It gave the Government power to assist industry by the investment of capital and in other ways, and confirmed the statement frequently hear from the lips of the Prime Minister that the Government was composed of builders and not wreckers. Mr Poison had attacked the Bill on the ground that it would lead to inefficiency, but experience was the reverse of that. Mr Williams referred to the steps taken in Great Britain for the organisation and control of industry and the results that had been achieved. He admitted that the powers in the Bill would be dangerous if administered by the wrong people* Uut contended that they would not be dangerous as the Labour Party would administer them.

The* Bill, he said, gave power to tne Government to co-opt experts and guaranteed business against ill-con-ceived and unfair competition. He hoped the Bill would become law this session, as there would probably be a fairly long recess and the Minister and his department would be able to go ahead with the work of rationalising industries. “The Bill may be full of dangers,” Mr Williams added, “but it will cure greater dangers, the worst of which is chaos due to unrestricted compettion in which the tendency simply is for the strong to crush the weak.”

“ONE OF THE MOST DANGEROUS

The Hon. Sir Alfred Ransom (National, Pahiatua) said he regarded the Bill as one of the most dangerous measures ever submitted to the House and one calculated to do a great deal of harm to secondary industries. He claimed that little attention could be paid to the opinions of the newspapers and manufacturers, as the Bill had been before the House only a few days. Neither members, nor others, had been able to digest its provisions, and later, when the provisions were fully known, they would get the true opinions of those who would be affected by the measure. The measure was so far-reaching in its effects that members should'have ample opportunity of expressing their opinions upon it. The debate was adjourned and the House rose at midnight till Tuesday afternoon, because of to-day’s functions connected with the Federation of Chambers of Commerce.