PLIGHT OF INDUSTRY

Wanganui Chronicle, Volume 80, Issue 251, 22 October 1937, Page 11

PLIGHT OF INDUSTRY

REMEDIES TRACED “40-HOUR WEEK MUST GO” TO MAINTAIN WAGE LEVELS Manufacturers in New Zealand have of late been producing a good deal of evidence to show (1) that the protection enjoyed by them in the past has been neutralised to a considerable extent through increases in costs of production brought about by recent industrial legislation, and (2) that heavy imports of manufactured goods have adversely affected the output oi New Zealand factories, led to staff reductions, and even imperilled the continued operation of some plants (says a statement by the Associated Chambers of Commerce of New Zealand).

The position which exists to-day is undoubtedly a serious one. The Government has admitted that it recognised its industrial legislation would have a tendency to increase costs of production in New Zealand, and it has expressed its determination “that economic industries in the Dominion will be safeguarded in the general interest.” No indication has been given as to what steps the Government proposes to take to this end, but it appears clear that one of three things must happen:— (1) The Government must increase the Customs tariff to bring the cost of imported goods up to the level oi the cost of goods produced in New

Zealand under the new laws. (2) The Government must cut down imports compulsorily by means of a system of licensing and rationing, thus permitting New Zealand-made goods to sell at abnormally high prices based on the present abnormal costs of production. (3) The Government must take such action as will permit of a reduced, cost of manufacture in New Zealand. Effect on Cost of Living As to remedy No. 1 (increased Customs duties) this would make a serious addition to the already increasing cost of living in New Zealand. it would cause grave offence to Great Britain and other customer countries overseas, and it would injure our whole products, and has too many competitors in that field, to be able to take any high-handed tariff action, firstly against Britain, which buys 80 per cent, of the Dominion s exported merchandise, or secondly against other customer countries, since New Zealand’s existing margins of preference against foreign goods—in some causes up to 64 and 67 per cent. —are already regarded by foreign countries as being insuperable obstacles to improved trade relations. In regard to remedy No. 2 (import licensing and rationing) this would be a revolution in the Dominion’s import trade, and would have all the evil effects of remedy No. 1, together with complete dislocation of tne business of every trader in New Zealand, and the opening of the door to grave abuse. The system has proved a curse in those unstable countries where it has been tried. The disruption that would be caused would be a heavy debit to set against the advantages that might result to local manufacturers by such action. There would have to be an immense degree of Government control and direction, and further costs to the taxpayer. Already the Government is the sole trader in the country’s exported dairy produce, which it has placed in the nands of a few firms in Great Britain to real with. Does the Government intend to assume similar sole control of the whole of New Zealand’s import trade —an immeasurably more complex matter? If it does not mean Government displacement of those engaged in the import trade in New Zealand, it must mean that the Government will allot to importers those overseas credits created by the sale of New Zealand products, and that the Government will, in addition, ! stipulate what goods are to be imported, -and to what extent. This in turn means that importers, far from being able to purchase what they think is most in demand in New Zealand, wili have to purchase, under official direction, only those articles from overseas which do not compete with the highcost products of local industries, including vital necessities. The implications of such a system can be readily guaged by the consuming public of the Dominion.

A further objection to remedies No. 1 and 2, is that by raising the cost of living they will make necessary a further increase in wages, which will cause manufacturing costs in New Zealand to rise still higher, so that

the last state will be no better than the first. Increased Efficiency Needed As to remedy No. 3 (reduction of costs) this appears to be the only sound course open to local manufacturers and Government alike. How, then, is this to be done? By reduced wages, or by increased efficiency? We do not believe in low wages, but we know quite well that to enable higli wages to be paid, every penny of it must be earned —otherwise it cannot last, and the people are but living in a fool’s paradise. How then can the efficiency of industry in New Zealand be so increased that it can pay high wages and yet continue to exist? The result of recent labour legislation has been less work for more money, and that policy has brought New Zealand’s industrial life to a crisis. The country must alter its slogan from “less work,” to "more work for more money.” The more money the workers have the better, but it must be earned—that is ordinary, common sense.

Many manufacturers claim that since the enactment of recent labour legislation their operatives have worked less willingly and intensively than before the working week was shortened, thus industry is working fewer hours a week and at the same time accomplishing less work an hour—a combination that is ruinous. A shorter working week and less eliicient labour lessons production and puts up costs quite apart from high wages. Again, the shorter working week and the

reputed general slackening of effort on the part of operatives has created an artificial shortage of certain types of labour, particularly skilled labour and female labour. Thus the local manufacturer is again hampered. It is evident that New Zealand, by introducing the 40-hour week in conjunction with higher wage levels, has moved too far and too fast, and has imperilled i'| industries in relation to other countries which have not followed suit. Australia, for one, which is infinitely more highly developed industrially than New Zealand, and which has resources in many ways superior to those of New Zealand, has recently turned down the 40-hour week proposal. It seems that the 40hour week must go in New Zealand if this country is to maintain wagef and a high standard of living.