STEEL INDUSTRY BILL

Timaru Herald, Volume CXLIV, Issue 20982, 10 March 1938, Page 13

STEEL INDUSTRY BILL

SECOND READING DEBATE STATE v. PRIVATE ENTERPRISE By Telegraph—Press Association WELLINGTON, March 9. Continuing the interrupted debate on the second reading of the Iron and Steel Industry Bill, Mr J. Hargest (Nationalist, Awarua) said he stood for private enterprise. Referring to the activities of the Pacific Steel Company at Onekaka. he said the Government had been unhelpful towards the company. He proceeded to criticise the Government's legislation in regard to private industries, stating that many such industries had only been saved from ruin during the last month or two by the revision of the tariffs. He contended that the present Bill was merely another attempt on the part of the Government to socialise industry, and urged that before the new industry was controlled by the State they should look at some Industries already so controlled. He instanced the losses oh the railways and the Government's hostels, such as the Chateau Tongartro. If the proposed iron and steel industry failed the cost of the failure would fall upon the taxpayer. The Minister must know that for many years to come the industry could not support Itself. He had been told that steel could be bought at £lO/10/- a ton at New Zealand ports, but a very moderate estimate of the cost of the steel produced under the Government's scheme Was £l5/10/- a ton. In conclusion, Mr Hargest stated he was opposed to the measure on four main grounds. Those were: (1) That it was to be a State enterprise creating a monopoly and was another step in the complete socialisation of all industry. (2) That it would incur Tosses that would fall on the taxpayers. (3) That it would increase the cost of living and the cast of building, and (4) Because it would create a State monopoly and it would react against New Zealand’s interest in the Home market. A Clamour Fcr Steel Mr W. M. Dehham (Labour, Invercargill) said he believed the industry would be one of the most valuable ever established in New Zealand. It should have been established years ago and the Unemployment Board had recommended that it should be developed under State control. If private, enterprise were better than State control the industry would have been developed years ago. The whole world was clatnOUring for steel, and development in New Zealand wis being delayed because private eliterprise had dillydallied with the industry for 3.0 .years. Those who supported private -enterprise objected to State interference, Mr Denham said, but in the past had asked the State to subsidise the wages of the men to be employed at Onekaka before the Industry could be started. The Unemployment Board was to subsidise wages for six years—public money was to be used to put wealth into the pockets of private individuals. Mr C. A. Wilkinson (Nationalist, Egmont) said the answer to the case made by the Government was that the industry was highly speculative in character and the enterprise was exceedingly risky. Private enterprise had failed to produce a profit from the industry, and no information had been placed before the House which would lead members to believe that the State would be any more successful ih the venture it was undertaking. If this information could be made available it was possible that the attitude of the Opposition would be considerably changed. The step planned by the Government was another manifestation of its policy of the socialisation of industry. Although he did not doubt the State’s ability to start the industry, it was very doubtful if a profit could be made. New Zealand would be brought into competition With Australia, and It must be remembered that Australian steel could be sold in New Zealand at £lO/10/- a ton. If New Zealand planned to sell its produce at £l5 a ton it was clear it was entering the trade with no prospect of success. Mr T. H. McCombs (Labour, Lyttelton) said the type of steel which was selling at £lO/10/- a ton was the very cheapest fgrade made, and would only be about one-third of the production of the proposed works. Tile Minister had mentioned that it might be desirable to establish works in Wellington. He would be very sorry to see this happen because he would not like to see the development of a black-belt in New Zealand such as occurred in the steel industry areas in England and the United States on account of the smoke nuisance associated wtih the industry. If the works were established at Onekaka, he added, it would practically mean the construction of a new town, and if this were So he hoped it would be laid out on modern toWn planning lines. Crux of the Case Mr W. A. Bodkin (Nationalist, Central Otago) said his impression of the Minister's statement when introducing the second reading of the Bill was that the establishment of the industry was of such importance to the Dominion that the country should be prepared to pay for it. Under the Bill the country was committed to an expenditure of £5,000,000 and all the facts and figures regarding tlife establishment Of the i'ndlistry had not been submitted to the House. This should be done to enable them to check up on the costs of production etcetera. The whole crux of the case, he said, was could the New Zealand industry compete with Broken Hill? But no information had been provided to enable a check up to be made in this direction. The Minister of Finance had said the establishment or the iron and steel industry Was essential to the industrial development of the Dominion, but rubber and oil were also essential to the indiistriM development of the country, but few of the major industrial countries of the world had these natural resources. The main thing was cotild an adequate supply of these necessities be secured? and he would assure them that adequate supplies of iron and steel could be obtained by New Zealand from overseas. Referring to the £5,000,000 which the Government proposed to expend on the industry, he asked if it were the Government’s intention to secure this sum from the Reserve Bank, if so, he asked what

rate of interest would be paid. The Attorney-General, the Hon. H. G. R. Mason, said the argument had been advanced by the Opposition that if the Government subsidised private enterprise it might withdraw its assistance to that enterprise at any time. That was not altogether correct, because the Government’s initial assistance might be looked upon as the acceptance of a moral obligation to see that industry through. Mr Mason emphasised the necessity for diversified industries in the Dominion, and expressed the opinion that there would be a very small loss, if any at all, on the iron and steel industry when it was established. With regard to the compensation proposals in the Bill, which had been criticised by Opposition members, he said he would challenge members to show any mistakes or ambiguities in these proposals. If these were proved to exist he Would have no hesitation in saying they would be rectified. It had also been contended that plentiful supplies of iron and steel could be obtained from overseas, but he would draw attention to the delay in arrival of shipments of these commodities within the last few months. In some cases the delay had extended to a period of eight months and construction operations had consequently been held up considerably. Within a reasonable time without heavy assistance from the State, so it seemed only reasonable that the State should establish it itself. Change of Policy Mr W. J. Polson (Nationalist. Stratford), said it was somewhat difficult to keep pace with the Government’s rapid changes of economic policy. In one case, for instance, the Petroleum Bill, they set out to assist private enterprise in the development of industry. while now they were turning about and emphasising the value of State control in connection With the iron and steel industry. Retaliation Against Britain Referring to the proposed establishment of the iron and steel industry in New Zealand, Mr Polson said it looked as if it were retaliation against Britain to satisfy the pique of the Minister for being taken down badly in connection with his efforts to negotiate trade agreements. The Hon. P. Fraser: Utter rubbish. Mr Polson: The Minister Is a judge of rubbish. Mr Fraser: I am When I look at you. Mr Speaker: Order! Order! Mr Fraser immediately withdrew his remark. The Hon. F. Langstone described as sheer moonshine the Suggestion that the iron and steel industry was to be established by way of retaliation because Mr Nash had not got his own way in London. He criticised the manner in which private Interests had been hawking Onekaka concessions around. The Government, he said, was not antagonistic to private enterprise, and it was only where private enterprise failed or when the undertaking was too big for it to tackle that the State stepped ih. Mr K. J. Hollyoake (Nationalist, Motueka), said the facilities available in the shape of natural resources at Onekaka made it extremely desirable that the iron and steel industry should be established there. The Opposition, lie said, held that reasonably assisted and reasonably controlled private enterprise would prove more beneficial from the national viewpoint than an iron and steel industry controlled by the State. Mr Holyoake contended that the Government’s accusation that private industry had failed in this instance could not be supported. Rather, he said, the industry had not been given an opportunity by the Government to start. Onekaka Orc Deposits The Hon. P. C. Webb said that to his mind the members of the Opposition were acting on instinct rather than on reason. He expressed surprise at the fact that Mr Holyoake, who represented the Motueka seat, should not wholeheartedly support the Bill. The Minister referred to the fact that past Liberal Governments had favoured State control of the iron and steel industry. There was estimated to be 60,000,000 tons of valuable ore at Onekaka. These deposits would last 500 years, and in the name of the people of this country the Government said these valuable deposit's should be retained in the name of the people of New Zealand. Tile Bill was a practical one and there was no side-step-ping in it. The Government was not flinching and had obtained the advice of the very best experts on its proposals. At this stage the debate was interrupted by the introduction by the Governor-Geheral’s Message of the finance number two Bill, the passing of the first reading of which was granted urgency on the motion of Mr Fraser. After a brief explanation by the Minister of Finance the Bill was read a first time and the house rose at 10.20 p.m.