ECONOMY BASIS

Otago Daily Times, Issue 26214, 26 July 1946, Page 9

ECONOMY BASIS

LABOUR AND MATERIALS REASONS FOR HIGH COSTS (P.A.) WELLINGTON, July 25. The important thing to watch in broadening the old basis of New Zealand’s economy was that, in the desire to set up new industries, capital investment did not outstrip the available labour and raw material 1 resources, which seemed to be the case temporarily. It was also important that crucial primary industries were not neglected. This statement was made by Mr W. R. Cairney, commercial secretary in the office of the High Commissioner for Australia, when addressing the Wellington branch of the Economic Society of Australia and New Zealand on post-war trade policy last night.

Factory Expansion

New Zealand, Mr Cairney said, had embarked on a policy of factory expansion mainly to provide employment for the existing working population, and for new arrivals. The New Zealand Government argued that employment was declining on the land, and that in any case tfiere was not much extra land available for farming. New Zealand also wanted industries for defence proper as well as economic defence. Import control was now an avowed instrument of protection, and was really a more powerful and more pliable device than a tariff, It had many faults, but did aim at the importation of really worth-while goods. Mr Cairney expressed the opinion that prices would never return to 1938 levels, but that some adjustment of import and export prices was needed, and needed soon, otherwise both Australia and New Zealand would discover that their handsome sterling credits were likely to disappear rapidly. The New Zealand secondary industries had excellent technical ability, and the quality of their products on the whole was quite good. Taxation and Distribution Distribution costs in New Zealand were high, and in some ca’ses factory prices were doubled before lb® consumer received the goods. The reason why New Zealand consumers had to pay double the Australian price for suits of clothes, tyres, and more than treble for wine was taxation and distribution costs. , ~ Whatever happened in the future, he said Australia would go on selling to New Zealand because her prices were favourable and her marketing channels well established. New Zealand might add to her exports to Australia paper pulp and products made from certain raw materials. '