WARM DEBATE

New Zealand Herald, Volume LXXV, Issue 22984, 11 March 1938, Page 11

WARM DEBATE

PAST NEGOTIATIONS

MR. ARMSTRONG'S CLAIMS

REPLY TO THE OPPOSITION

[T?Y TKLKCRAI'H —SPECIAL REPORTER] WELLINGTON. Thursday "Private enterprise lias made a hopeless mess of the iron and steel industry in New Zealand from start to finish," said the Minister of Labour, the Hon. H. T. Armstrong, speaking on the Iron and Steel Industry Bill in the House of Representatives to-day. "Because of tho opposition of big interests," ho added, "tho only way this industry will ever bo developed is by the State."

Replying to the contention of the Rfc. Hon. J. G. Coates (Opposition— Kaipara) that the socialisation of the iron and steel industry was greatly different from the socialisation of electricity, the Minister said New Zealand could have had any amount of private companies to undertake the supply of electricity, hut it would not let them do so. Every argument used with respect to electricity could be used with equal force in relation to the iron and steel industry. A Statement Challenged Mr. Armstrong challenged Mr. Coates' statement that the Unemployment Board had never considered a proposal that it should subsidise a. company to the extent of 35s a nian per week for the development of the Onekaka resources. Ho quoted from the minutes of a meeting of the board held on November 20, 1935, at which resolutions adopted earlier were confirmed. These showed that the board had been of opinion vthat the industry could be established in New Zealand with a subsidy from the board, that it should operate whollj' under licence and that the amount paid out by the board should be repaid by the issue to the board of fully paid-up shares. Not only was the past Government prepared to subsidise the construction of the works, said Mr. Armstrong, but it was also prepared to go into partnership. Board Not Government Mr. Coates: But that was the board. Mr. Armstrong: But you said the board never considered it. The Government was to stand the expenses and private enterprise was to reap the profits. j, Mr. Coates: The board said that, not the Government. Mr. Armstrong: The Government never had a chance to approve that decision, because it was fired out a few days later, but Mr. S. G. Smith, who was then Minister of Employment, presided at the meeting. The Minister denied the charge made by the Opposition that the Government had kept Pacific Steel, Limited, in doubt as to its intentions for two years. Ho quoted a letter dated January 20, 1936, in which he had informed the company that in the Cab.inet's opinion its proposals were not acceptable to the Government, but that it was arranging for further investigation to see the extent to which the Government might undertake the industry itself. The company apprached the Government again, he said, and six months later he was informed bv the Minister, of Finance, the Hon. W. Nash, once again that its proposals were not acceptable. "Made No Bones About It" "We made no bones about it," Mr. Armstrong continued. "After that two representatives of the company came to me with a miserable £500,000 proposal for an industry that would take £5,000,000 to establish. I told them in no unmistakeable language that 1 would have nothing to do with them and since the matter has passed into the hands of the Minister of Finance and the Minister of Industries and Commerce they have been just as straight and fair as I was." Mr. W. J. Broadfoot (Opposition— Waitomo) said the Government had been anything but straightforward in its dealings with Pacific Steel. Mr. Armstrong had stated that the company had been informed early in 1936 that its proposals were not acceptable to the Government. Actually the concluding paragraph of the Minister's letter read:— "I am directed to say that the Government is appreciative of what your company has done in bringing the examination of this industry to its present position and to assure you that if your company desires to place any further representations before the Government as to future association with the investigation, or in respect to any other phase of the question, arrangements will bo made for such proposals to be discussed and sympathetically considered." More Opposition Comments "And tho Minister told us that negotiations were broken off on that date," Mr. Broadfoot added.

• Mr. W. J. Poison (Opposition—Stratford) : What an exposure. Mr. S. G. Smith (Opposition—New Plymouth): Ho is clean bowled. _ "There was nothing sinister in the activities of the company," Mr. Broadfoot said. "It is unfair of Government members to throw jibes at men who honestly endeavoured to get the industry going." Mr. Armstrong rose to at point of order, claiming that he had been misrepresented and that he had not stated that negotiations had been broken off earlv in IiMO.