Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. WEDNESDAY, MARCH 5, 1947 FACTOR IN POST-WAR ECONOMY

Bay of Plenty Beacon, Volume 11, Issue 2, 5 March 1947, Page 4

Bay of Plenty Beacon Published Mondays, Wednesdays and Fridays. WEDNESDAY, MARCH 5, 1947 FACTOR IN POST-WAR ECONOMY

ONE aspect of the cost of the war to New Zealand of which little account has been taken and yet which has a material bearing on the post-war economy is the deterioration which has taken place in capital goods, such as railways, buildings, and machinery. They can be restored only out of current production, which involves delay in meeting consumers’ immediate demands. In pre-war years New Zealand employed about a tenth of her occupied labour force making capital goods, such as houses, factories and other buildings, roads, and bridges. In addition, there must have been almost as many employed in manufacturing other durable goods, including machines for industry; durable household goods, such as furniture, stoves, and refrigerators, and stocks of commodities to be held by dealers at various stages of the distribution system. To provide weapons and supplies of war, New Zealand diverted much of her resources away from current civilian production of consumers’ goods and capital equipment. Thus stocks of all kinds of goods declined, and dealers’ shelves were denuded. Consumers’ durable goods, like furniture and motor cars, were out and could not be renewed, or even maintained at pre-war levels of efficiency. Industry had to make do with old machines, and postpone rebuilding. At the same time, public utilities received minimum attention. Railways and other parts of the transport system were not maintained at pre-war standards. According to some estimates, New Zealand lost the equivalent, during the war years, of four years’ capital investments, which will have to be made good before we can regain the full capacity to produce consumption goods, and so restore pre-war standards of living. Out of a pre-war national income of about £144.8 million New Zealand was investing approximately 10 per cent, a year. During the six war years net investment totalled £2B million, so that the economy fell £56 million behind in accumulating capital goods, such as buildings, machines and stocks. This capital shortage may be made good within five years, and in some instances within a shorter period, but—and here is the factor which has a major bearing on the national economy—it will have to be done out of a total national income which is no greater, and perhaps less, than before the war. Taking into account the age of capital equipment in many industries, and leaving higher prices out of the reckoning, volume of output cannot be materially greater than in 1939. We can therefore estimate that the value of production is still about £144.8 million at 1938-39 prices, and that normal capital requirements at pre-war rates of investment are at least £ls million, which must be withheld from consumption each year. And if we are to make good the wartime lag over the next five years another £l2 million a year must be saved. On these figures the flow of consumption goods could be only 90 per cent, of pre-war levels. Another factor limiting our consumption standard in the near future is the high cost of imports. Formerly we obtained a fourth of our real income from overseas in exchange for exports. In 1938-39 exports in New Zealand currency averaged £57 millions over a 12monthly period and imports £53 millions. Today, although we have to pay less interest overseas, and have replaced some imports by local production, our import needs are heavy, and a given volume of imports costs more exports than in 1939. This is because import prices have risen a great deal more than export prices. To sum up, our labour force, if it is to make good the capital losses of war in five years, can provide only 90 per cent, of pre-war consumption which, spread over, say, 10 per cent, more population, will provide a standard of living little better than 80 per cent, of prewar levels. The sooner the sacrifices are made the sooner standards can be restored. Greater effort, better methods, and higher 'efficiency from all sections of the community are the only short cuts to high standards of living. mmti- ■

Truth of an Old Saying Proved The old saying about it being an ill wind that blows no one any good has been amply borne out in Hastings district after the storm recently. Dismally surveying orchards literally carpeted with fallen fruit, growers offered the public as many apples and pears at a penny a pound as they could carry away,, provided they picked them up. Men and women of all ages immediately took advantage of the opportunity to get unlimited quantities of unusually cheap fruit. Orchardists were besieged by hundreds of people equipped with everything from paper bags to wheelbarrows. At first some orchardists offered the fruitfree if people would pick it up and take it away, as a means of clearing their properties, but it was soon discovered that the windfalls had a good market value and a price was put on them.

Army Gradation List Units of the regular forces such as the New Zealand Staff Corps, New Zealand Permanent Staff and New Zealand Permanent Army Service Corps ceased to exist as from January 9, under the reorganisation. Officers in these units have been posted to such new corps at the New Zealand Armoured Corps, New Zealand Engineers, New Zealand Regiment, New Zealand Corps of Signals and New Zealand Army Service Corps. The Royal New Zealand Artilery, the New Zealand Electrical and Mechanical Engineers, and- the New Zealand Army Ordnance Corps continue to exist. A gradation list of regular force officers posted to the new units appears in the New Zealand Gazette. Officers who have passed the normal age for retirement are included in a super-num-erary list.