INDUSTRIAL EXPANSION

Otago Daily Times, Issue 23882, 9 August 1939, Page 16

INDUSTRIAL EXPANSION

A DANGER POINTED OUT RENEWAL OF WARNING The president of the Sydney Chamber of Commerce (Sir Archibald Howie) said that his remark at the annual meeting of the chamber that there was danger in the policy of unlimited expansion of secondary industries was made with the object of preventing, if possible, a repetition of the conditions in the manufacturing indus- : tries in the depression of 1931, when tens of thousands of men were deprived of their work in industries which had received protection by means of special taxation on the consumer for a very long period. In many instances, he said, these industries had been enabled to earn excess profits which they had distributed to the shareholders in the form of bonus shares, and had then sought to earn profit on capital which had never been subscribed by the shareholders. Sir Archibald Howie was replying to criticism of his speech by the Minister, of Customs (Mr Lawson) and the president of the Victorian Chamber of Manufactures (Mr R. F, Sanderson), who claimed that Sir Archibald was " out of step with the times " and that the expansion of industry, though rapid, was neither "unlimited nor unbridled." "There was no suggestion that the value of secondary industry was not appreciated," Sir Archibald said, "but the time has come for a full and complete investigation by an impartial tribunal to ascertain whether the system at present being followed is giving', the best results to Australia as a whole. "It is true that large amounts of money have been paid by the general taxpayer in bounties to primary industries, but this would never have been necessary had it not been for the high price level in Australia, brought about by heavy protective duties. It may be that the secondary industries provide a greater proportion of the taxes required for social services, but most people would suppose that they provide those taxes out of the prices they charge for the articles they produce." If an inquiry showed that the present policy was the right one, Sir Archibald Howie said, then let it be continued. But if it proved that it was the wrong policy, then an alteration should be made without loss of time. Increase in Costs Political difficulties would be encountered in implementing a sound economic policy, Sir Archibald Howie continued, but if this was done it would tend to eliminate the necessity for home consumption prices to aid primary exports, make it unnecessary for Australia to sell overseas at a loss, reduce the cost of living and the operating costs of all industry, and reduce taxation. Even the great wool industry, on a recent statement by responsible graziers, found itself in the position of having to ask for a bounty to enable its existence to be preserved, a position which had been brought about mainly by the steady increase in costs. "In the meantime," he said, "may I ask Mr Lawson and Mr Sanderson how thev account or the steadily decreasing number of employed in factories since the beginning of the year in New South Wales, the greatest manufacturing State of the Commonwealth, despite the heavy expenditure on defence programmes, the bulk of which is being directed toward secondary industries? '