WOOLPACK INDUSTRY

New Zealand Herald, Volume LXXVII, Issue 23600, 8 March 1940, Page 6

WOOLPACK INDUSTRY

Proposals that the Government should become the dominant shareholder in the woolpack industry by subscribing £200,000 of new capital to New Zealand Woolpack and Textiles, Limited, should be closely scrutinised by taxpayers, who would have to find the money. The company has already written down its £l shares to os and a loss of £1897 in 1938 was followed by a loss of £4711 last year. This depressing result was reached in spite of the fact that the Government guarantees a market for the whole of the company's output at a price considerably above that for which jute woolpacks can be imported from India. In effect the farmer, who must compete in open world markets, is called upon to subsidise this sheltered local industry. Nevertheless it continues to make losses and now the proposal is that the taxpayer should find a further £200,000 to prop up a concern proved to be uneconomic. No rational justification can be found for this proposal, but at least the people are entitled to an explanation from the Government. In addition the farmer has a real grievance and should not allow it to rest. Too many sections in this country are taking a cheap ride on the backs of sheep and cow at the farmer's expense. How many open and concealed subsidies have been made to the flax industry in recent years is difficult to trace. Apart from the woolpack industry, export subsidies amounting to £128,769 have been paid in the seven years from 1931 to 1938 on exports valued at about £150,000, the rate of subsidy being about 30 per cent. Now there is a plan to acquire land, build a mill and houses at a first cost of £'71,000 and an annual cost for several years of £22,000, in order to experiment further with an uneconomic industry. The land and the men would be much better employed for farming.