INDUSTRIAL EFFICIENCY BILL

Nelson Evening Mail, Volume LXX, 7 October 1936, Page 8

INDUSTRIAL EFFICIENCY BILL

In his opening remarks Mr Mason congratulated the Minister of Industries and Commerce on having attempted to solve the problem of the commercialisation of industry and he believed that such a Bill would meet with more success in New Zealand than in other older countries. All that. the Opposition seemed to be able to say was that the Bill had been introduced by the wrong people, but what the Government required to know was in what respects the Bill could be improved. The purpose of the Bill was not, as had' been suggested, to prevent anyone making an undue profit. Another Bill had been passed for that purpose. The purpose of the Bill was to introduce orderliness into industry. The ordinary law of competition no doubt sufficed for Mr J. Hargest (National Awarua), a previous speaker, who had spoken of the glories of competition, continued the Minister. Industry had had a very severe time during the depression and unrestricted competition had not proved its salvation. Receivers had been put into many firms by the banks without publicity being given to the fact and the results of unrestricted competition had been far from being so glorious as Mr Hargest would have the House believe.

“JUST COMMONSENSE” So far as the Bill was concerned it evolved no special theories, but was just commensense which must appeal to any rational person, said the Minister. He was sure that the time was ripe for a Bill of that sort and he rejoiced to see it and it was his hope that it would reach the Statute Book at an early stage. If there were any deficiencies in the Bill he hoped the members on the other side of the House would point out where it could be improved instead of making irrational objections and a glorification of confusion.

Mr Mason said that the Minister recognised the wisdom of having the co-operation of all those affected by the Bill. It introduced organisation and would enable industry to do what it would wish to do. t That was clear enough to anyone who read it with fairness and not with that peculiar bias of the member who said he would be prepared to look more favourably upon it if it had not been introduced by the present Government. Mr J. Hargest (National, Awarua) said that no one would agree with the

CONTROL OF INDUSTRIES COMPENSATION FOR THOSE WHO SUFFER BY THOSE WHO BENEFIT FROM RATIONALISATION (From The “Mail’s” Parliamentary Reporter) WELLINGTON, This Day. A suggestion that explicit reference should be made in the Industrial Efficiency Bill to the payment of compensation to those who suffered detriment as a result of rationalisation plans, was made by the Attorney-General (the Hon. H. G. R. Mason) in the second reading debate in the House of Representatives yesterday afternoon. The Minister said he thought the' Bill contemplated that those seriously affected should receive some sort of compensation and he considered that it would be advisable to make that plainer in the Bill, so that the ordinary person would not have any grounds to feel alarmed.

In reply to an interjection by Mr S. G. Holland (National, Christchurch North) who said that apparently Mr Mason’s idea was that other people’s money should be spent, the Minister said that he thought it fair that those who received great benefit as a result of rationalisation should compensate those who suffered detriment. He thought those who received the benefit would be quite willing that any levy imposed on them, so far as was fair, should be used in part to indemnify those who suffered detriment.

desire of the Government to take over the control of industry, and he contended that the plan was fraught with many dangers. Under the Bill, as he read it, the Government would be able to take over the farming industry. Mr J. Thorn (Government, Thames): What about the Executive Commission of Agriculture? Mr Hargest: The Commission does not attempt to manage the industry. Under this Bill the Government will be able to dictate to the farming community. “COUNTRY BUILT UP BY PRIVATE ENTERPRISE” He said that the Minister would find it difficult to regulate farming as he imagined he was going to regulate the manufacturing industries. The Bill would have the effect of driving capital for industrial enterprises to 'other parts of the world, particularly 'Australia, which would flood New Zealand with goods thus manufactured. New Zealand he emphasised, had been built up by private enterprise, and he said that there was no justification for forcing industry to submit its plans to a bureau that might or might not be competent. Mr Hargest criticised the constitution of the bureau and pointed out that it was to include public servants with full-time jobs. Did those public servants have the time or ability to become captains of industry? . Mr Hargest wanted to know what would happen if an industry failed. Would the Government come along and socialise industry as the Prime Minister had threatened to do?

“MOST INDEFINITE MEASURE” “This Bill is the most indefinite measure ever introduced into this House and does not deal with any problem,” said the Hon. A. Hamilton (National, Wallace). All the Bill did was to set up a board and a rather expensive board at that. He agreed that competition had made it pretty hard for business, but did the Minister think that he could stop that sort of thing under the Bill? The Minister should confine his attention to those businesses v/hich desired to be regimented and controlled. The Government seemed to see nothing good in society. The Labour Party had been so used to criticism that it saw all the wrongs and nothing of the rights; and that prevented the exer-

: cise of sound judgment. The Government should scrap the present Bill land bring in a measure that would achieve something. If the Minister wanted to deal with the manufacturers let him do so, but the present Bill would hang over the heads of I every industry until it became operative. The Bill as it was written would rob Parliament of its powers and put them in the hands of the Minister. The Government might as well pass an all-embracing Bill putting all the powers of Parliament in the hands of the Cabinet and let members go home. Mr J. Thorn (Government, Thames) We’re not dictators.

Mr Hamilton: You’re pretty near it. Mr Hamilton said the time had come when industry had to be developed. but the Government should know what industries should be dealt with. The licensing of industries was dangerous in that it was likely to create monopolies. The Bill provided for a more vicious form of bureaucracy than any board which the previous Government had established.

Mr C. H. Burnett (Government, Tauranga) said it was a pity the Bill had not been passed 30 or 40 years ago. If it had been in the Statute But then, millions of pounds would have been saved. He knew of one district in which seven freezing works had been abandoned. A bureau of Industry would stop that sort of thing.

UNLIMITED POWERS The Rt. Hon. J. G. Coates (National, Kaipara) said the Bill went much further than the powers contained in the Board of Trade Act. As a matter of fact, nobody knew how far the Bill did go. No such system as was proposed in the measure could possibly work, and the results would* be increased costs and inefficiency, and the public would not be served in anything like the manner they were served at present. The Minister of Industries and Commerce (Mr Sullivan) had taken credit to himself because of what he had done with the wheat and bread industry, but the only real result had been to raise the price of bread. The manufacturers, said Mr Coates, were entitled to ask for what they liked and they were entitled to be listened to, but he would like to ask the manufacturers if they were satisfied with the Bill as it was drafted. Mr Sullivan: They want a greater say in any plan that is devised, and I think they are entitled to consideration on that point. In all other respects they are satisfied.

AN EMPHATIC DENIAL Mr Coates: I have been told that the Minister told the manufacturers that if they did not like the Bill he would socialise every industry in the country. Mr Sullivan: You can accept my word that I did not say anything of the kind. What I did say to the manufacturers was that if they did not want the Bill that would be the end of it.

Mr Coates asked if the Bill did not provide a pretty close corporation so far as the manufacturers were concerned. Was it suggested that everybody was in need of wet-nursing? “The Bill we have before us to-day out Herods Herod,” said Mr Coates. "It was never conceived by the manufacturers that a Bill of this kind would ever make its appearance. Does the Bill really mean that we are going to have a Tariff Board in this country?” Mr Sullivan: The bureau acts in an advisory capacity. Mr Coates: The progress that has been made in this country and in every other country has not been achieved because of Government action, but on account of private enterprise. Private enterprise has been the driving force. What he would

like to have would be the Government’s policy for dealing with the increase in costs. Did the Government have in mind some idea of regulating imports, or did the Prime Minister think that the easiest way was to increase the exchange rate even further?

The last Government had taken the definite view that the onus was on the manufacturers to improve their own industries. However, there had apparently been a good deal of dissension

and some manufacturers’ organisations had asked for powers of compulsion. The Government of that day had not been prepared to go that distance, but it had indicated that if specific cases of waste or incompetence were brought to its notice it would be orepared to deal with the matter by introducing legislation bearing on the individual industry concerned. That was a reasonable and logical approach to the whole position of efficiency in industry. Manufacturers, operating under the Government's labour legislation, would be asked to compete with imports from countries where the hours of work were 44 to 48 a week, where they were lower wages bills and where, in many cases, more efficient machinery was available. It was obvious that tariffs would have to be brought into the picture. Mr Sullivan: “We know how each industry in the country will be affected bv' this legislation and only a handful will be seriously affected.” Mr Coates: “How can the Government tell until the legislation is in operation?” Mr H. M. Christie (Government. Waipawa): “The manufacturers will have the benefit of increased turnover.”

Mr Coates: “The increased turnover is more than overtaken by increased costs.' The whole trend of affairs, Mr Coates continued, meant either a rise in tariffs or an embargo on certain classes of imports. If those alternatives were ignored, the Prime Minister might find himself in the position of having to raise the rate of exchange still further.

"We are providing legislation that will lead to planned production,” said Mr R. Roberts (Government, Wairarapa) Planned production, he added, was what New Zealand needed, and it did not matter much whether it was called co operation or rationalisation or anything else. In Great Britain farmers had been coerced into marketing schemes, and there had not been the voluntary spirit that had existed in this country.

Mr C. A. Wilkinson (Opposition, Egmont): “British farmers came into the schemes of their own free will.” “It was done in the same way as the last Government dealt with the dairy industry here,” said Mr Roberts. “The minority was coerced by the majority.” Mr W. J. Broadfoot (Opposition, Waitomo): “You have turned round now.”

Mr Roberts said Opposition members had claimed that private industry had built up industry in New Zealand. That was largely so. but during the past few years private enterprise had broken down, and the time had come lor the institution of a more satisfactory form of control.

"The intentions behind this Bill may be good, but it is a hasty, ill-conceived and rash experiment,” said the Hon. .). G. Cobbe (Opposition, Oroua). He suggested that the Government should postpone putting the Bill through for at least a year, so that representative experts could give it further consideration. The Bill, as it stood, looked altogether too much like an attempt to give the Minister of Industries and Commerce full control of the business ot the country. It was a significant fact, Mr Cobbe said, that the Bill, while specifying many industries, made no mention of fanning, although lie had no doubt (hat the Government intended to include farming in the list of industries which would be covered. Apparently farming had been left out in the meantime because of the hard knocks which the industry had already had from the recent legislation of the Government. j Mr Cobbe claimed that the Bill re- I presented the first step toward bring- j mg the Soviet system of administration into force in New Zealand. Referring to its possible effects on the development of industry generally, lie claimed that it was very unlikely that private enterprise would invest money in any industry which was to be plac- i ed under bureaucratic control. The contention that the Bill would

give protection to the investing public as well as the people as a whole was advanced by Mr TI. M. Christie (Government, Waipawa). The Minister, he said, had no intention of interfering in any business where it could be . voided. It was becoming increasingly obvious that some regulation of industry was necessary. It was increasingly difficult for businesses to stand alone, and in Great Britain, where the conditions were also very difficult, there was a demand for control and 'regulation. In introducing the Bill the Minister was doing the common sense tiling.

"I don’t believe this Bill is worth the paper it is written on,” said Mr R. A. Wright (Independent, Wellington Suburbs). "I believe it will break down as.soon as its provisions are put into effect. Its real purpose is to suppress rings and combines and maintain prices under the guise of rationalisation. If the Bill does happen to be workable it will form the thin end of the wedge of a socialised industry.” Mr Wright said the Bill spelt the end of opportunity for small men to start in business. If the Bureau of Industry decided that a business was uneconomic the owner would be dispossessed without compensation. A Government members: "Does he get any now if he goes out of business?”

Mr Wright: “He does not mind going out in a fair contest, but he does not want to be put out by legislation passed by members of Parliament, many of whom know nothing of business.” Mr Wright described as moonshine the suggestions by Government speakers that business in New Zealand was chaotic. He quoted statistics to show that lor the last three years the production of the secondary industries was steadily on the upgrade and that practically all concerns were strong and healthy. He concluded by saying that the Bill was one of the worst introduced in the House. A denial that there would be any element of dictatorship in the administration of the Bill was given by Mr ,1. Thorn (Government, Thames). It had been suggested by Opposition members, said Mr Thorn, that representatives of any industry on the bureau would be able to sgupeze out any others who might be thinking of starting in that industry, but that would not occur because there would be a sufficient proportion of State representatives on the bureau to prevent it.

"Unregulated systems make it extremely difficult for industry to bear the strain of modern business,” added Mr Thorn. "Blind and haphazard methods not only hinder the development of the country’s resources, but thev also involve investors in great losses. Unrestricted competition is hard to direct into channels that will serve the common good. It is surprising that the opposition to this Bill should have come from a party which, when in power, was responsible for introducing in connection with the primary industries the policy with which the Bill conforms. In the meat industry and the dairy industry unregulated buying and selling has been eliminated with considerable advantage, and it is reasonable to assume that the same benefits will follow the regulation of industry generally.” Mr S. G. Smith (Opposition, New Plymouth) appealed to the Prime Minister .to hold the Bill over until next season on the ground that it was far-reaching and was not fully understood by those whom it would affect. The ad journment of the debate was moved by Mr L. G. Lowry (Government, Otaki). The House rose at 10.30 p.m.