HIGHER PRICES POSSIBLE

Southland Times, Issue 23461, 18 March 1938, Page 8

HIGHER PRICES POSSIBLE

INCREASED COSTS AND TARIFF DRAPERY AND FOOTWEAR MAY BE AFFECTED An indication that an adjustment of prices will be made in many drapery, clothing, millinery and footwear lines, owing to the recent tariff alterations, is given in the latest issue of The New Zealand Draper. The journal also states that prices of goods of local manufacture may rise because of added costs caused by increased wages, shorter hours and dearer materials. The article states that hopes of expanding trade within the Empire, if not with the rest of the wor'.d, have been somewhat dashed by the sudden amendments to the tariff schedules. Gratification is expressed, however, at the fact that only a slight alteration has been made affecting Britain. “It is difficult to see how retailers can avoid making adjustments in prices to meet the higher duties,” states the journal. “With the exchange rate on London in their favour, Australian manufacturers in other lines than footwear have been enabled to undersell competitive British lines, and if an extra 20 per cent, duty causes a diversion of orders from Australia to Britain, it means that the British goods will be dearer than those from the Commonwealth under the old tariffs. Prices will have to advance in sympathy, which must lead to increased costs of living. “The purchasing power of money must fall when costs rise. One means by which real wages might be raised is by reduced taxation. The amount raised by the sales tax is now over double what it was intended to be, and a reduction by one-half would increase buying power. Similarly, a reduction in the exchange rate would provide the wage-earner with more value for his money. LONG-NEEDED ADJUSTMENT “With such a substantial diminution in the number of unemployed, the amount levied by taxation on wages and income must realize an amount far above that now needed. A solid reduction in this tax would add to the incomes of the people. A long-needed adjustment in the incidence of income tax, and its imposition in such a manner that it would not be added to the price of goods, would greatly reduce manufacturing costs and the distributing costs of companies engaged in the retail trades. “While on the one hand it is difficult to avoid raising prices, the means and remedy to offset this are in the hands of the Government, and the adoption of the steps mentioned would mean a national benefit.”