The Daily News MONDAY, SEPTEMBER 20, 1930. ADJUSTMENT OF COSTS

Taranaki Daily News, 29 September 1930, Page 6

The Daily News MONDAY, SEPTEMBER 20, 1930. ADJUSTMENT OF COSTS

A very important proposal has been put before the Acting-Prime Minister and the Minister of Labour by a large deputation representing the primary and secondary industries of New Zealand. It is that the Arbitration Court shall be empowered to review industrial awards by general order. In 1921, when the Dominion was affected by a serious depression, Parliament passed emergency legislation with the object of enabling the Court to meet unusual, conditions. It is suggested that similar action should be taken now. Its effect would be that instead of having to wait until awards expired the Court would be permitted on receipt of an application to review the condition of an industry and make such changes in the award as it might deem justified. If this course were adopted reduction of wages probably would be found to be desirable in some cases, and there might also be considerable alteration of conditions affecting the organisation of industry. . There can be no question but that New Zealand is facing difficult conditions, brought about for the most part by influences over which this country has no control. The national income has been seriously reduced because the produce exported from the Dominion is •bringing low prices. Exports for the twelve-inonth ended on June 30 were only worth £47,588,000, which is £8,660,000 less than, the value of the previous year’s exports. During the eight months ended on August 30 the exports just exceeded £35,000,000, and those for the corresponding period of last year were worth £8,000,000 more. Obviously such a country as Zealand must feel the effects of this very substantial 'reduction of its income. Unless this Dominion is to plunge into such difficulties as Australia is facing means of meeting the de ficit must be found. By reducing their expenditure on luxuries and on articles and services which they can do without the people can offset in some measure theloss on overseas trade. Those who have been directly and immediately affected by the loss, the primary -producers, have had to make savings, and their enforced economies have had their repercussions in both retail and wholesale business. Merchants and traders in turn have had to cut down expenses, and slackness in commerce has meant reduction in the number of men and women employed. But while some people have suffered a good deal, there has been no reduction in the wages fixed Under awards. In businesses and- industries whose rates of wages, hours of work and conditions of staffing are all closely regulated by the Arbitration Court the only means of saving available to the employer is reduction in the number of people to whom he / pays wages. But that is anything but a satisfactory solution of the problem which confronts him. It may mean something like industrial suicide. If he shortens hands to the extent rendered necessaiy. by the curtailment of his income his business may. suffer to such a de gree as to be ruined, and in. such a case his employees would suffer with him. That is an aspect of the matter which appears to be entirely overlooked by the Labour people who protest so vehemently against anything in the nature of a reduction of nominal wages. They demand the “right to work,” the right to live at as high a standard as they have ever been able to attain, the right to “union wages” for relief work, and all the rest of it. Theii’ idea seems to be that there is somewhere an inexhaustible fund, which can continue under all con-, ditions to disburse, weekly payments at fixed rates to 7 all the “workers” who demand them. Already the Wellington Trades and Labour Council-has issued a manifesto protesting violently against the proposal to empower the Arbitration Court to alter wages. The remedy suggested by this body for the inability of industry and commerce to maintain present wages conditions is the writing down of capital values in what it regards as over-capital-ised industries. .Surely examples of tlie writing down of capital have been numerous enough in this country during recent years, and those concerned with such transactions know well enough that the process has not enabled the payment of higher wages. On the contrary, workers not covered by awards have had to share with their employers the losses that have had to/be met in such reorganisations. And that is exactly what the employers are suggesting when they urge the Government to empower the Arbitration Court to review awards. The level of values of the produce exported by this country having dropped very seriously, the cost of production must be reduced. But the adjustment of cost is not to be brought about by one section of the community without the help of the rest. There must be all-round reduction, and when costs are reduced there will be all-round benefit. As costs are lowered the purchasing power of wages is increased, so that lower money wages will buy as much as

higher wages did and the standard of comfort will not be impaired. Moreover, reduction of costs means stimulation of industry and increased employment.