NATIONAL ORGANISATION

Taranaki Daily News, 8 July 1931, Page 5

NATIONAL ORGANISATION

A BUSINESS PROGRAMME PLAN FOR FUTURE DEVELOPMENT. '-MOBILISED NATIONAL EFFORT. Admitting that wage reductions and taxation increases are immediate unpleasant necessities to meet existing conditions; Mr. W. J. Polson, M.P., in his presidential address yesterday to the Dominion Conference of the Farmers’ Union at Wellington, urged that attention should be given to a wider problem. Portions of his remarks follow. The Rt. Hon. David Lloyd George and 'his co-authors, in their book, “How to Tackle Unemployment,”, draw stern attention to the relatively slower rate than her competitors at which Great Britain has increased her production. The figures show a steady annual drop since 1913, until to-day approximately a fourth of her trade has disappeared. That fact constitutes our greatest problem in this country. Britain is our only customer, and if she cannot sell her products she cannot buy ours. What is to be done about it? Are we to attempt to hibernate and live on our own fat until the spring of prosperity returns, by reducing wages and increasing taxation, or can we carve out some fortune for ourselves ? There are three possibilities before Great Britan, Mr. Lloyd George and his collaborators point out: (1) A direct reduction of her standard of life; (2) the protection of her present relative inefficiency, leading also to a reduction in her standard of life; (3) an increase in her efficiency. It is clear that the alternatives referred to by Mr. Lloyd George confront us also, and that we cannot afford to delay consideration of them. We have heard a good deal from one section about mobilising the country’s credit. Credit depends upon many things. It has a habit of contracting and disappearing when violent hands are laid upon it. The credit of New Zealand has shrunk enormously during the past few months, and we may not be able to peg our exchange in an effort to sustain it. After all, it is nothing tangible. The actual tangible wealth we possess is the bullion in our banks, the small change of credit; the real -wealth of the eommunty is the value of its credit,

and that depends on its ability to meet its obligations and pay its debts. . It will be too late to seek to mobilise the country’s credit when it has disappeared. What we have to do is to restore and revive it. I wish to again make the point that we cannot go on in the old way. Our former markets are contracting or disappearing, our competitors are catching up, or have overtaken us; our debts are growing, our revenues decreasing, and our credit diminishing. We must organise or go under. It would be folly to disguise the dangers ahead, nor do the figures in connection with our exports and imports, when subjected to analysis, lend us any comfort. ESSENTIALS TO PROSPERITY. The'first consideration appears to be what are the essentials to prosperity? When we consider the position of New Zealand, her physical and geographical conditions, it is obvious that one course is open to her if she is to progress to so develop her primary industries that she will, through their success, be able to further develop her secondary industries, and so become a nation. We cannot, unfortunately, put the cart before the horse. It is impossible, under existing conditions, to export our products from secondary industries. It is equally impossible to shut out overseas competitors and supply our own wants entirely from local production—indeed, the more we attempt to foster local production and so employ labour, the further we pile up costs and, temporarily at all events, increase the burdens of the community. ' As I have previously endeavoured to point out, the immediate effect of manufacturing a substantially increased amount of our local requirements in the Dominion would be to transfer the burden from one set of shoulders to another. We would be forced to make up in taxation what we would lose in Customs revenue, and the primary producers, who are at present enabled to escape some of these taxes by the process of doing without, would be compelled to find their share. We would increase the cost of such goods in this country and so affect the living standards, and we would still further weaken the purchasing power of * our only customer and chief supplier, Great Britain, because by the amount : which she is unable to sell of her manufactures she is less able to buy our products. There is no answer to the statement that the only chance of increasing primary production in New Zealand is to get costs down, but that in itself .will not be sufficient. If we agree that it is is necessary to stimulate the primary industries before we proceed further with the development of the secondary ones, and if we design our taxation and economies to take that into consideration, our policy still must Envisage a further horizon if we are to escape from our present difficulties.

NO SECTION MUST BE FAVOURED.

We must not look at the question from the point of view of any section. It is not a matter of saving the farming community, but of finding the way out for everybody. If that fact is generally recognised it will be easier to bring public opinion to bear on the problem. If we are to recover and advance we must have a joint outlook. We need a salvage and reconstruction policy, something better than makeshift remedies a policy starting from the bottom upwards. We need readjustments, a constructive plan and. a return to soun , but much-neglected, economic principles. What are the general objectives, and what are the fundamentals of such a plan? First, a national understanding; second, the subordinating of all other issues to this one; third, the assent ol all sections to the adeption of a definite objective. I have sought to classify the requirements of the Dominion under five main headings, defining the scope of each division. Briefly, the proposal is to set up a national organisation with power to create subdivsons, or groups of specially selected individuals, each responsible for one of the following fields of work: —

1, The encouragement of the essential industries of the Dominion: (a) By the formation df plans for research in regard to production, distribution and finance; (b) by the examination of the requirements of our customers here and abroad; (c) by the investigation of potential markets and .the proposal of tariff bargains when desirable, in order to obtain them; (d) by the preparation of a systematised method of service, including sales organisation and advertising (e) by the study of world production to determine what new -industries can be added to those we possess. 2. The stabilisation of our future development by directing expansion, both primary and industrial, along inte h<rently conceived and scientifi-ady piai ned lines: (a) by the modernisation and replacement of inadequate existing facilities to enable cost reductions and greater flexibility; (b) by long-term

forecasts, in the preparation of which we should co-operate with our neighbours to enable us to be prepared to meet market fluctuations; (c) by determining with reasonable accuracy the expenditure necessary and desirable to carry out a three years’ programme of both governmental and public work; (d) by the close and steadfast cooperation of State, financial, business and producing interests in a long-term plan.

NEW STANDARD OF EFFICIENCY.

3. —The maintenance of increased efficiency in production and distribution of reasonably established standards of living: (a) By a policy for employment; (b) by the setting up of reserves in time of prosperity for the security of employment in times of reduced production; (c) by the creation of means to prepare charts of costs, production possibilities arid market conditions in industry and production; (d) by the discouragement of excessive credits in times of unusual prosperity, and the facilitation of legitimate credit in times of depression. 4_ The promotion of co-operation within the Empire to facilitate trade, increase services and circulate capital, therebv increasing economic stability and national spending power: (a) By interEmpire business co-operation studying trade discriminations, tariffs, international movements of capital, co-ordina-tion amongst organised industries, etc.; (b) by the joint purchase of material and supplies on a long-term plan which will facilitate trade stabilisation; (c) by the setting up of machinery .for mutual protection against foreign pricecutting; (d) by the provision, of or-

ganisations to facilitate distribution and publicity abroad, and particularly in those countries where any slight increases in spending powers would mean immediate returns to New Zealand producers.

5. —The establishment of such conditions between industry and labour as will make for smoother relationships, standards of comfort and stability of employment: (a) By employers undertaking a long-time planning programme to provide stability of employment; (b) by labour demanding of their leaders an understanding of sound business principles; (c) by joint efforts to increase efficiency and so maintain wages; (d) by maintaining and equalising employment through the adjustment of working hours; (e) by the creation of machinery for the joint discussion of industrial problems. HOW TO SET TO WORK.

We possess some of the machinery to-day for such a plan. For example, if we take the first one, “the encouragement of our essential industries,” there is no reason why a council consisting of representatives of the Scientific Research Department, the Department of Industries and Commerce, the Meat and Dairy Boards, and the representatives of industrial and commercial life, under the chairmanship of a representative and capable 'business man, should not cooperate in a real investigation with an eye to a general plan, as is done every day in the great business concerns of the world. We might learn, for example, what Japan does with the wool she buys from us; what- we could barter with the Dutch East Indies, or what we could offer China in exchange for silk

and tea. We certainly would have a plan for finance such as we have long sought after, brought into immediate prominence, and we might discover that soya bean or Russian furs might be grown successfully in certain parts of New Zealand.

Similarly, with the other- proposals I have outlined, would not a national examination of costs in industry make for efficiency? When have we prepared a long-term programme of either national or business undertakings ? What overhaul of our industrial methods with a view to co-ordination, modernisation and economy have we ever made ? It is not necessary to discuss each of these proposals in detail here. They are merely suggestions in the hope that they may be of some use.

After all, public policy should boil down to three or four things: What the nation can do, what will make for prosperity and for happiness, and what will ensure future development. In considering these things we have to study the needs of all. Therefore our Salvage Government requires a wide economic outlook, and it must have the wholehearted co-operation of the people. THE RIGHT LEAD IS NEEDED. Is such a plan possible? We have men of high intelligence in positions of responsibility in New Zealand, who adopt such methods in their own business, and know the importance of doing so. We. are a progressive and energetic people, and not to be dismayed by difficulties. All we need is the right lead. Such a plan would require to offer advantages to all sections and to abandon some, of the methods of the past. It would require co-operation betw®*ii lab-

our and, capital, including mutual consultation and collaboration, and means for a fair apportionment of any rewards. I admit the difficulties of such a scheme. Profit-sharing has not succeeded in attracting much support from either capital or labour, but possibly there are other avenues such, for example, as have been followed by the sheep farming industry and the shearers, with provision made in prosperous periods in which both should join, for such depressions as the present. The basis, however, must be goodwill and closer co-operation. The position is that unless we get together we will court national disaster —capital will lose its cash, industry its markets, production its rewards, and labour its standards of life. Each of the main departments I have outlined would require to be handled by a special committee, in which business men, workers and producers, as well as officials, would units in preparing and planning the campaign, the whole to be controlled by the national executive itself, with powers of initiation and veto. It might not be possible to achieve any remarkable results, but it would mean more business in government, which is a very different thing from. more, government in business, and, with patience, would soon begin to succeed. After all, is there any reason why this country could not be run as a business, with all the people in it shareholders in the undertaking, and is there is any other way of mobilising the country’s credit?