RISING COSTS IN INDUSTRIES

Southland Times, Issue 23634, 8 October 1938, Page 11

RISING COSTS IN INDUSTRIES

PRODUCERS GRAVELY CONCERNED JOINT STATEMENT TO GOVERNMENT (United Press Association) WELLINGTON, October 7. Some six months ago representatives of the New Zealand Manufacturers’ Federation and the New Zealand Farmers’ Union met to discuss matters of vital interest to both bodies, says a joint statement issued by the two organizations. Several meetings were held, and the question of joint co-operation was discussed by the annual conferences of both the federation and the Farmers’ Union. It was felt by members of both organizations that there was a mistaken idea prevalent that both primary and secondary industries were in a very favourable economic condition, and it was decided that statements should be published in order that the people of New Zealand should be made aware of the true position.

It was agreed that these statements should be presented to the Government before publication in order that any comments which the Government might care to make could be published along with them. The first statement was presented to the Government some weeks ago, and it is herewith released for publication together with ministerial correspondence concerning it> The statement is as follows:—

' “The present position and the trends apparent therein are causing grave.concem(to the producers of the country. The New Zealand Farmers’ Union and the New Zealand Manufacturers Federation accordingly feel impelled to join in setting out facts which they consider should, in the interests of the Dominion, be fully disclosed.

PRODUCTION MAY FALL “It has been manifest to both organizations that economic conditions in New Zealand are encouraging a state of affairs, which must react to the detriment of the whole country, and both bodies consider it imperative that attention should be directed to the consequences which -must ensue should present trends continue. In our opinion, the result of these present conditions ruling in New Zealand must be a definite decrease in national production. Costs tdday are at the highest level they have ever reached in the history of the Dominion, and, moreover, they show no tendency to fall, but, if anything, appear to be continuing their upward trend. On the other hand, overseas prices have been steadily receding during the past year, and as evidence of this we furnish the wholesale prices index number published by the British Board of Trade, which shows a steady drop from 111.5 in July last year to 100.7 in June of this year. “This drop in overseas prices is transmitted to New Zealand in two ways. We must expect lower prices in the sale of our primary produce overseas, .with the result that land on the margin of cultivation in New Zealand is forced out of production; second, the lowerpriced imports drive the New Zealand manufactured goods off our local Dominion market. This has already occurred. The net result is, therefore, a decrease in production, both fanning and manufacturing. “The drop in manufacturing production is already manifest and it appears certain that the drop in primary production will follow. Possibly _ the 6} per cent reduction in the dairy industry is evidence of this. There are, therefore, two influences which will effect a fall in our national income. The first is through a shrinkage in the price we receive for our exports and the second is the shrinkage of both fanning and factory production to which we have already referred. “Unless falling prices are matched by decreased costs, the greatest difficulties result. In New Zealand today, decreased prices are being accompanied by rising costs and there can be only one result—a fall in the real national income at a time when the State is making heavier calls on it by way of taxation than ever before in the history of the Dominion.”

MINISTER’S REPLY Following is a copy of the reply to the above statement which was addressed to the general secretary, New Zealand Manufacturers’ Federation, by the Hon. P. Fraser:— “With reference to the statement handed to me by you and a representative of the New Zealand Farmers’ Union, I regret to advise you that as the Prime Minister and the Minister of Industries and Commerce are at present out of Wellington, and as it is at present necessary to devote so much time to the. international situation, it has been impossible for me to reply earlier to your representations.

“I wish to assure you that the importance of the matter you have raised is recognized, and I suggest that the best method of dealing with the question is for a conference with the Minister concerned. At the moment it may be difficult to arrange this, but if you will get into touch with the Minister of In-, dustries and Commerce later on he will be glad to arrange a conference as soon as possible.” , The following letter was addressed to the Minister of Industries and Commerce, by the Dominion secretary, New Zealand Farmers’ Union, dated October 1, 1938:— “Following on the reply sent by the Hon. P. Fraser to the joint statement on behalf of the New Zealand Farmers' Union and the New Zealand Manufacturers’ Federation, I am communicating with you in order to ask whether or not it is possible for you to arrange a conferqpce as suggested. In order that our statement will not be held to have a

party political significance, we would suggest that such conference be. held not later than Thursday of this week. You will realize that some of our members are impatient of our delay in publishing the memorandum, for they feel that it is essential that the public should be made aware of the difficulties under which our industries are labouring. I will be glad to have your early advice with regard to this matter.” The Dominion secretary, New Zealand Farmers’ Union, received the following letter, dated October 3, 1938, sfrom the Minister of Industries and Commerce:—

“I have to acknowledge receipt of your letter of October 1 in reference to the proposed conference which has been suggested following the submission of a statement regarding costs by the New Zealand Farmers’ Union and the New Zealand Manufacturers’ Federation. I have noted your suggestion that the conference might take place not later than Thursday of this week, but I regret exceedingly, as a number of the Ministers are at present out of Wellington, and as I personally shall be out of town all this week, it is not possible to arrange the conference just at present. As pointed out by the Hon. P. Fraser in his letter the importance of the matter is fully recognized, and I can assure you that every effort will be made, to arrange the conference at the earliest possible moment”