THE PRICE OF CEMENT.

Taranaki Daily News, 26 September 1930, Page 6

THE PRICE OF CEMENT.

The reply of the Minister of Industries and Commerce, the Hon. P. A. de la Perrelle, to the New Zealand Farmers’ Union in regard to the prices of cement is scarcely likely to be the last word on the subject. The Minister says that after full investigation of the accounts of the three companies manufacturing cement in the Dominion he is satisfied that their prices are not unreasonable. But in the figures he quotes, which are taken from the published balance sheets of the companies, the Minister refers to an extremely interesting item. He does K not state exactly what profits ■were made, but lie points out that of these profits “a sum of upwards of £13,700 on the revenue side is received from investments, and in computing the net return on the manufacture and sale of cement this amount should be deducted.” Presumably such investments represent profits, or at least the utilisation of ' portion of the capital -upon which the cement making industry is asked to earn a return, and this would indicate that the manufacture of cement is an industry that no longer needs the heavy protection of one shilling per cwt. plus an additional 22 per cent surtax under this year’s .Budget. It is quite true, as Mr. de la Perrelle points out, that the cement manufacturers have had to expend large sums in research work and general development before any profits could be made. For that they are entitled to a fair return—even a generous return for some years. But to suggest that the high protection which enables the price of the local product to be kept up is to remain indefinitely seems hardly fair to the consumer. The Minister admits that freight and handling costs on cement from Great Britain increase its f.o.b. price there by from 130 to 200 per cent. Now that developmental work is largely completed it does not seem unreasonable that freight and handling charges should be held to afford the local industry sufficient protection and that the duties should be removed, thus permitting fairer competition. Advocates of high duties are fond of asserting that with adequate protection local manufactures can be cheapened to the consumer. The cement industry would seem to afford an excellent opportunity of demonstrating this by reducing the price of the manufactured article.