WARNING NOTE

Otago Daily Times, Issue 27012, 22 February 1949, Page 4

WARNING NOTE

Rising Costs in New Zealand LESSON FROM SOUTH AFRICA

Unless New Zealand wanted to find itself in a similar position to South Africa, where a black market had arisen because prices of production of gold, the main export commodity, were above market prices, it had better put its house in order and make a serious attempt to cut down the rapidly increasing cost of living, said Sir James Fletcher, in an interview with the Otago Daily Times yesterday.

“ New Zealand can learn a distinct lesson from the situation which has developed in the Union of South Africa,” said Sir James, who recently visited the Union. “Immediately after the Second World War, probably no country offered greater opportunities than South Africa. The tax rate was probably the lowest in the-world, the cost of living was low, and there was ample domestic help. These factors appealed to a large section which wanted to make investments with a good return on capital and ideal conditions under which to live. South Africa attracted not only large numbers of people, but an enormous amount of capital was transferred from China, India and Britain. “ The inflow of this tremendous amount of capital to South Africa has now created a serious situation,” Sir James said. “Land values, for both

industrial and farm use, have in some cases doubled and trebled. There is no doubt that New Zealand has benefited through the Land Sales Court “With this volume-of capital available, many secondary industries have started. Despite the huge reservoir of native labour, it is in short supply today and wages, as far as native labour is concerned, have risen to almost three times the pre-war figure.” The chief export from South Africa was gold, Sir James continued. At the present time, owing to the high cost of labour, 50 per cent of th e Rand mines could not produce gold on the ruling fixed prices. According to recent cabled advice the South African Government was attempting to sell gold on the black market. “To-day In New Zealand we frave reached the position in which - the cost of living has risen to a height where it must be a serious embarrassment to people on fixed incomes, old age pensioners and wage earners in the lower group,” Sir James declared. “We are also facing in New Zealand fresh demands on all sides for increased wages. To any thinking person, another spiral in wages—apart from giving some measure of relief io certain groups—will not improve the position' ultimately, but will undoubtedly make it more difficult for the average householder to make ends meet. “ There is one more serious aspect, however,” he added. “ What effect, will a further substantial rise in wages mean in the cost of production? Will, we find ourselves in a position like South Africa and have a black market because prices of production would be above market prices? “ I consider that the time has arrived when we should examine the rising cost of living and see whether we are living extravagantly, and whether there is any way in which prices of staple goods and manufactured articles can be cut down,” Sir Jatnes said. “As a large employer of labour, "I realise there is a case to answer on the side of the emDloyers, and it is no use simply preaching the doctrine that the individual worker is to work harder and produce more, although this might be part of the cure, “ There is to-day a forcing-up of costs through firms competing for labour and supplies. I am convinced that, with greater co-operation, a definite saving could be made in almost every section of the industrial life of this country. » “As far as the Government is concerned,” Sir James continued, "much criticism has been levelled against a certain policy, but one is compelled tcadmit that it has been either the workers or the employers who have negotiated with the Government, each concerned with his own interests rather than the problem as it affects.; the whole country. “The time has arrived when it is not a question of damning the Government, blaming the workers,'or condemning the employer. Every section of the... community must realise that the problem of the cost of living is something, that can only be cured by a will on all to reach the solution.