THE OTAGO DAILY TIMES FRIDAY, MARCH 25, 1949. THE NEW STICK

Otago Daily Times, Issue 27039, 25 March 1949, Page 4

THE OTAGO DAILY TIMES FRIDAY, MARCH 25, 1949. THE NEW STICK

The decision of the Price Tribunal, as agent of a Socialist Government, to embark on a policy of intensified discrimination against one section of the community can hardly be said to have come unexpectedly. For some time the Government has been under pressure from its union bosses to raid company profits, these having been indicated by glib Socialist economists as being a likely source from which to draw the additional share in the national income which the unions are demanding. These same self-styled experts have failed to point out, however, that if company earnings can be mulcted, without dangerously affecting the national economy to the extent necessary to absorb additional costs in wage increases, the responsibility for one of two discreditable courses must be admitted by the Government. Either the whole costly and arbitrary system of price control has been operating as inefficiently as its critics have claimed, or the Government is deliberately and wickedly sacrificing the interests of one section of the people—including the many small investors who draw their incomes from company dividends—on the altar of political expediency. Discrimination by the present Government, especially through the agency of the Price Tribunal, is, of course, no new development in the economic life in the country, but its new policy, if put into practice, will be the tribunal’s frank admission that its function is one of political piracy and not, as has been so ostentatiously bruited, that of encouraging economic recovery or combating inflation. It would be idle to pretend that there are not companies in New Zealand which have produced balance sheets indicative of an ability to bear a greater proportion of working costs from current profits. The reasons for this are many, and not least of them is the Price Tribunal itself which, by establishing a mean of mediocrity, has provided the opportunity for organisations in which management and methods of production are efficient to operate more profitably than those performing on Price Tribunal standards. Another important factor has been the confusion arising from the Government’s obsession with a policy of industrialisation, a policy which has given unwarranted opportunities to favoured industries for obtaining their requirements from the limited labour resources. The clothing industry—which is, apparently, to be the first victim of the new bludgeon—has already been seriously inconvenienced by these trends. The margins permitted to clothing manufacturers on such essential articles as shirts and children’s garments were reduced to a minimum, with the inevitable consequence that manufacturers, faced with shortages of staff and soaring costs, produced only a minimum of these lines. To counter any new attempts at coercion they will naturally have recourse to the same defence, and the public will once again be made to suffer. There is yet another point which the unions that are clamouring for a greater share of company earnings have overlooked. In his last Budget Mr Nash estimated company incomes for the year at £55,500,000, and company taxation at £ 24,000,000. If the ability of companies to contribute on such a scale to the nation’s huge tax bill is reduced, the money will have to be found from the pockets of the workers, and any monetary gains they might receive in increased wages will prove to be illusory benefits indeed.