LOWER PRICES.

Press, Volume LXVI, Issue 20098, 29 November 1930, Page 14

LOWER PRICES.

dangers of drift, j NEED FOR CUTTING COSTS, j \ IVllt CO AT it.S PROPOSES A I CONFERENCE. { j t | THE PRESS Special Service, j j AUCKLAND, November 28. j A national conference representative of. all the interests in the community to j discover means of accommodating the industries of New Zealand to the new economic conditions was proposed by the Leader of the Reform Party, the Rt. Hon. J. G. Coates, in the course of an address to his constituents at Matakohe. "I wish to urge upon the Government and the people that a national economic conference should be called together at tho earliest possible moment partly to continue the good work started by the National Industrial Conference of 1928 and partly to help in the solution of the new problems which have arisen during the last two years," said Mr Coatea. "I am not an alarmist and 1 am convinced that this Dominion, provided that it is prepared to face the position with courage and common sense, can reestablish its public finances and its industries upon a sound economic basis," lie continued. "Our only danger lies in a continuance of the policy of allowing matters to drift. What we have to face 13 the fact that prices in the world market have declined on an average about 30 per cent, and that it has become urgently necessary for us in New Zealand to readjust our own costs of production to meet this new level of world prices. The position to-day is that in many of this Dominion's industries, including the chief primary industries and many of the secondary and distributive industries which depend upon them, the total of wages plus interest, plus materials, plus taxation, plus other costs of production is greater than the probable market return for the product. In such circumstances it is impossible for an industry to be carried on and the result is an increasing amount of unemployment.

Loss of Spending Power. '•.During the past year our farmers liave received over £9,000,000 less for their produce than they received in the previous year and this represents an uverago cut of £IOO a year in every farmer's earnings. The farmer's spending power being thus reduced, it is obvious that the income of all other businesses and industries must suffer correspondingly since the farmer can no longer afford to buy the services and commodities at the old prices. Moreover, there has occurred a decline in the level of British wholesale prices from 359 points in 1925 to 130 in 1929, and to liil in June, and 105 in November, 1930. When this fall in import prices afTects New Zealand many of our own secondary industries will find themselves in difficulties unless they can reduce their own prices to a competitive level and this also depends upon their being able to reduce their own costs of production. "Problems Must be Paced." •'I believe that these serious and urgent problems mutt be faced and dealt with and that the best method will be found in the calling together of & national economic conference representative of the primary producers, manufacturers, importers, financial institutions, and workers, all of whom are vitally concerned, in that their very means of livelihood depends upon the effecting of such a reduction of costs as will enable their industries to continue. Such a conference should consider also the effect of the national overhead, that is, the costs of Government and public undertakings in relation to tho burden of taxation on producers."