LABOUR LAWS

New Zealand Herald, Volume LXXV, Issue 23068, 20 June 1938, Page 13

LABOUR LAWS

SWAGES AND HOURS CHANGES IN DOMINION "A DAMAGING ATTITUDE" SURVEY BY AUSTRALIAN Recent industrial changes in New Zealand are not likely to benefit the national economic structure, according to arguments advanced by Mr. W. K. McConnell in the monthly circular of the Sound Finance League of Australia. Mr. McConnell toured tho Dominion recently and his impressions are given under the heading of "Recent Economic Changes in Now Zealand." After reviewing the introduction of tho 40-hour week and tho restoration of wage rates to pro-depression level, Mr. McConnell states that these changes wero part and parcel of the Government's general programme for raising living standards. They form part of a wholesale plan for a modified if not entirely new social order. Unscientific and Arbitrary "The automatic restoration of predepression wage levels," Mr. McConnell continues, "was, to say the least, quite unscientific. Tho step was taken in accord with no principle, unless the pro-depression wage rates possessed a virtue all their own. No account was taken of industry's capacity to pay these rato6, nor even whether such rates were fair to the workers. "If tho question had been referred to tlis Arbitration Court, a body which could mako decisions after obtaining and considering all the relevant facts, the new rates would no doubt have varied; some may even have been higher than pre-denression levels. The Labour Government's attitudo to wages was equally as unscientific but more damaging and less excusable than the suspension of compulsory arbitration by the previous Government. The latter opened the door to arbitrary action; the former imposed a purely arbitrary change upon the whole economic iystem.

"The imposition of tlio shorter working week was 110 less arbitrary, notwithstanding the channels provided for appeal and respite. Only a painstaking inquiry by a properly qualified body could hope to assess its benefits and burdens and indicate how and where they would be likely to be distributed. Yet it is a curious fact that those who have been most insistent about the virtues of the shorter working week have been the principal objectors to any sort of fact-collecting inquiry. Sharp Rise in Costs

"There is no denying the fact that both costs and prices have risen sharply in New Zealand during the past two years. The cost of living index jumped from 837 for the year the Labour Government assumed office to 945 last December, as compared with a rise from 832 to"88*2 in Australia during ,the same period. Over this period the wholesale price level in New Zealand rose from 138 to 156; in Australia it rose a little and is now almost the same as it was two years ago. It would seem that increased costs rather than increased profits wore responsible. During the period of price increments just reviewed the index for New Zealand company share values actually fell from 1026 to 953. "Another factor that can safely be attributed largely to the shorter working week and higher wages is tho increase both in the personnel and the cost of Government departments. The estimated increase in tho two years to March last was 17,359. The annual appropriations for Government departments, excluding pensions and maintenance of public works and services, aggregated 39 per cent more in 1936-37 than in 1935-36. The operating expenses of New Zealand Railways in 1935-36 were 88 per cent of operating receipts; in the first nine months of 1937-38 expenses absorbed 98 per cent of receipts. These figures do not include interest charges. Hence the net railway deficit looks like growing apace. Taxation Compared

"Can the community bear these costs? They may do so if export prices keep up and thus lead to an expansion of incomes. But will they? In any case, costs in New Zealand have not ceased rising yet. Increased costs of Government departments will lead almost inevitably to higher taxation, and taxation is already £22 per head in New Zealand, as against £l6 in Australia. "Plan or no plan, benefits in this world must be paid for somehow and by somebody. The whole community cannot work 40 hours and yet consume the products of 44. Nor will an allround increase of money incomes of itself assure a greater quantity of goods to be purchased. . . "The Government's objective of a 'more equitable distribution of the national income' is sound. Its methods are setting in motion forces which threaten to reach the point whore there will be less real income to distribute. One way of abolishing the 'poverty amidst plenty' paradox is to abolish the plenty."