WORKERS’ REMUNERATION

Wanganui Chronicle, Volume 74, Issue 112, 14 May 1931, Page 8

WORKERS’ REMUNERATION

ARBITRATION COURT ISSUE

EVIDENCE IN CASE FOR EMPLOYERS CONCLUDED

COURT ASKED TO CONSIDER RATIONING OF WORK

WELLINGTON, MAY 13. The first stage of the Arbitration Court’s hearing of argument and evidence on the question of whether a general order should be issued relating to workers’ remuneration, was completed this afternoon. When Mr H. D. Aeland, president of the New Zealand Sheepowners’ and Farmers’ Federation had concluded his evidence, and the cross-examination had come to an end, Mr Bishop intimated that he did not propose to call any further witnesses. He wished, however, to intimate that he would subsequently ask the Court to give consideration to the question of making it possible for work to be rationed in industry generally. There were already a number of instances where rationing had been put into effect to avoid dismissals, but under some awards this was not permissabl e. Mr Roberts asked whether the Court had authority to agree to such a course. His Honour: That point will be argued later. Mr Roberts submitted that the present sitting of the Court had no relation to such a matter. It was concerned purely with the question of the issue of a general order. Mr Bishop pointed out that he had given notice of his intention at the present stage, in fairness to the other side.

MR HUNT’S EVIDENCE

FUBTHEB cboss-examination [ Per Press Association. ] WELLINGTON, May 13. The cross-examination of Mr W. D. Hunt was continued at the Arbitration Court this morning when the hearing of evidence on the question of whether a general order should be issued in respect of wages was resumed. Further questioned by Mr Bloodworth, Mr Hunt stated that New Zealand butter was mor. than holding its own in the markets in the Old Country. It would be possible to get a higher price for it, but it would not be possible to get anything like the necessary volume consumed at a higher price. The same principle applied to labour. It was necessary to fix the rate at which the industry could afford to employ labour. If the rates were higher the industry could not afford to employ all the country’s labour. Mr Bloodworth: I think you will agree with me that the home market is valuable and we want more people in New Zealand in order to increase the home market. Mr Hunt: Yes. Mr Bloodworth; We don’t want to have to depend upon outside markets. Mr Hunt: We can’t do without them. Mr Bloodworth: If we hope to induce people to come to New Zealand and increase the home market, will it help us to reduce the standard of living? Mr Hunt: No.

Mr Hunt went on to say that if wages were lixed at a lower level and costs were brought down so that everyone could be employed, it would follow that the purchasing power would be widened and the standard of living would be improved.

Reduced Living Costs.

Replying to Mr Young, Mr Hunt said that he was not in favour of a fixed wages fund. He considered that the wages fund must be dependent upon the extent of production. It was just about as certain that the cost of living would fall following a reduction in wages as it was that the sun would rise to-morrow morning. Mr Young: There may be a cloud over the sun, and you won’t be able to see it. Mr Hunt: But it will be there just the same. Mr Chapman: Won’t you suggest that the industries which even now in adverse times an able to'pay good dividends, say 8 per cent., should participate in general wage reductions? Mr Hunt: I don’t see how you could differentiate. Any industry consists of a large number of units, and while some units are making good profits, others are on the border line. The benefit of wage reductions in any industry will be passed on to the producing community in the form of reduced •osts. ’ ’ Replying to Judge Frazer, Mr Hunt said that he expected to see the first signs of economic improvement in Europe and the United States. He did not expect any substantial improvement here before there had been an improvement in those countries. Mr Bloodworth asked witness whether he was aware that wages had approximately four years ago been paid at something like 10 per cent, above award rates. Witness: That would depend upon supply and demand. Judge Frazer remarked that in some trades, particularly building, rates above the award minimum had been paid. He would not like to take the responsibility of estimating what had been the general rat*. Mr Bloodworth asked witness whether he recognised that workers had already suffered a reduction of wages by being brought down to the award minimum. Mr Hunt: Wages have not yet been brought down sufficiently to meet the tremendous reduction in the prices for our primary products.

Produce Prices,

Cross-examined by Mr Roberts, Mr Hunt expressed the opinion that as soon as produce prices improved wages would also improve. Mr Roberts: Did the employers agree to raising wages when produce values were very high a few years ago? Mr Hunt: Wages rose. Mr Roberts: Yes, with leaden wings and following two, three and four years behind increased values. Mr Hunt: Many employers were paying more than award rates. Mr McCombs asked whether M r Hunt would be satisfied if wages were reduced and interest rates left alone. Mr Hunt: Both will have to come down. Mr McCombs: Then you agree with me that the Government should have gassed legislation to reduce the interest roles? Mr Hunt: The Government could re-

duce interest rates without legislation. Legislation would have unsatisfactory effects.

Mr Hunt’s evidence having been concluded, the Court adjourned for lunch.

Low Wool Values

In the course of his evidence, Mr Aeland, after quoting figures relating to production and prices in connection with the wool industry, said that during the 1930-31 export season, wool prices had been at extremely low levels and had averaged round about s|d per pound. The wool farmers’ position had been serious enough for the period 1926-30, but a decline to the disastrously low levels of the 1930-31 season had brought about such a state of affairs that a continuance of the present costs and prices must mean early and inevitable ruin to practically every sheep farmer. Tables of figures compiled by the farm economist at Lincoln College had shown that under present circumstances the total receipts of pure wool in the country were insufficient to cover working costs alone, even if nothing had to be paid for interest and other overhead expenses. The prices of all produce varied in accordance with export prices. Export prices had fallen 40 per cent, since the 192829 season. A 40 per cent, decline in the value of the product meant a loss to the primary producer of £30,000,000. It was probable that most farmers in New Zealand were at present producing at a loss, but the price fall had been the severest in the case of wool, and wool producers had had to meet the decline, which meant that present wool prices were only about one-third of what was received three years ago. Under present conditions wool production could be financed only by drawing heavily on capital and reserves, and both capital and reserves were being used to finance production, because farmers were unwilling to give up their land and occupations without a struggle, and because they hoped that prices might rise and costs might fall, which would enable production again to become a paying proposition. They could, however scarcely hope to receive in the near future a level of prices approaching the average received for the period 1926-30. The average of this period they lost money on production, and consequently they could not hope to produce profitably at the level of prices expected in the near future unless their costs were considerably reduced. If these costs were not reduced it seemed inevitable that sooner or later the production of wool must suffer a serious contraction, and any reduction in the total production of wool would be a disastrous matter for New Zealand.

Sheep Land Only

A tremendous area of land was suitable for no purpose other than wool production, and throughout the whole his tory of New Zealand, wool had been the largest single product of the coun try. Wages entered heavily into every single item of farm costs, and though no precise estimate was possible, it seemed likely that wage costs would determine directly or indirectly more than half the total costs of running a farm. Such wage costs were manifestly not confined to wages paid on the farm, but farmers’ costs of production included wages paid in the transport, handling and distribution and marketing of his own products, as well as the wages paid in all trades providing any subsidiary services which entered into the farmers’ costs of production. The latter were an extremely important part of the total. Costs in every industry and the effects of high wages and high taxation were seen in the present excessively high levels of internal prices, which determined so largely the costs of production in pri mary industries. The farmer could not control to any appreciable extent the prices he received for his product overseas, and the proportion sold in the New Zealand market was so small that no attempt at control there could make, much difference. The costs of production entailed in farming could not at the present time be paid for out of receipts for produce. Costs were admittedly high in other industries, and were kept high largely by taxation and wages. Such high costs meant that other industries must pass on theii costs in high prices, and they continued to be passed on until they reached the ultimate consumers, who could not pass them on any further. The farmer, in particular, could not pass them on so long as they remained excessive in relation to the prices received for his produce, and his only alternative was to carry on production at a loss until his capital was exhausted. National Purchasing Power. Concluding, Mr Aeland said: “Our national purchasing power is already reduced. Purchasing power means the power to purchase goods and services, because it has been reduced we have

unemployment and depression. These can be remedied only by an increase in purchasing power, Jout purchasing power can be increased not by inncreasing costs but by lowering cnsts, so that the reduced income from the people will again be able to buy as much goods and services as formerly. It is essential that industry in New Zealand must be placed on a competitive basis with the rest of the industrial world if we are to survive. Primary producers, if they are to carry on, must be able not only to balance their budget but must also bo allowed a margin on their yearly production which will enable them to live under conditions at least equal to those of the other sections of the community. Mr Roberts cross-examined Mr Acland at length on the subject of the shearers’ contract, which the former contended did not expire until October, while Mr Acland insisted that it had automatically expired at the end of the recent shearing season. Mr Roberts asked Mr Acland whether he was in favour of compulsory arbitration. Witness said he had never been in favour of this procedure, but there was no opportunity of avoiding it at the present time. Mr Bishop remarked that he had authority to state chat the sheepowners would be prepared to meet the shearers to discuss the matter at any time, either before or after the issue of any general order which might be made. Increased Cost of Living. His Honour: That is very satisfactory. -Mr McCombs asked witness whether he was aware that ca-penters’ wages had, as Mr Bishop had stated, increased from Is 9d per hour in 1914 to 2s (id at the present time. Mr Acland: If Mr Bishop said so, 1 have no doubt that his figures were accurate. Mr McCombs: Then the increase is only 50 per cent. Witness: “Yes. Mr McCombs: And the cost of living has increased 50.4 per cent. So that if carpenters’ wages are reduced, they will be reduced below the 1914 standard. Air Acland replied that it was impossible to overcome economic law, and if there was insufficient money to pay wages at a certain rate, it was impossible to continue doing so. Air AlcCombs submitted that during the period under consideration, there had been years in which large profits had been made, and those people who had benefited by the profits should now stand the losses. Witness: If they have the money to do it! Air AlcCombs: Then if they have squandered it on motor cars and benzine, do you suggest they should now pass the responsibility on to those who had no opportunity of sharing in the profits? Witness: 1 agree that too much has been spent on motor cars. 1 am afraid those who squandered their money have practically nothing left to-day. Mr AlcCombs said that much had been made of the contention that practically all New Zealand’s wealth was dependent on the export market. Were there no countries where wealth was not dependent on the export market? Witness said there were countries such as France, which were reputed to be wealthy, and which depended very lit tie upon imports and exports. Air AlcCombs: Is it not a fact that wealth can be produced very largely in New Zealand? Witness: Yes, but we have still got to pay large amounts in interest on our external debt. Mr Chapman asked whether witness considered that industries which had been able to accommodate themselves t) present conditions and still make a profit, should reduce wages. Mr Acland said that if industries could afford to pay present wages, they should do so. If they reduced wages, they should be prepared to pass on the reduction in the. form of lower prices for the goods they sold. When cross-examination of Mr Acland had concluded, the Court adjourn cd till Monday to enable the representatives of the employees to prepare their reply.