COMPETITION SETS PRICES

Chronicle (Levin), 22 October 1947, Page 7

COMPETITION SETS PRICES

HOW MANUFACTURERS LOOK UPON PRICE CONTROL WELLINGTON, Oct. 21. "Price control to date has to some extent created shortages with which tlie present Control of Prices. Bill atteinpts to deal by further intensifymg price control operations," stated tlie secretary of the Associated Oliambers of Commerce, Mr. A. 0. Heany, . today, in submissions to the Industries and Commerce Committee of the House of Representatives 011 the provisions oi the Control of Prices Bill. Mr. Heany suid tliat if the policy oi encouraging production were pursued as vigorouslv as the attem.pt to deaJ with the situation by restriction, Nevr Zealand would the sooner. reach a position where the free operation of prices set bv- competition, would provide an automatic guide to production and a regulator of consumption. The ControJ of Prices Act, if passed, shouid be operative for a limited period and the scope of the Tribunal's authoritv shouid be reduced progressivelv with a view to its ultimate elimination from the economic set-up of the Dominion, said Mr. Heany. He objected to trades havxng to produce accounts and balance sheets as their production would mean that the Tribunal, while ostensibly lixiug sale prices, would aetually be acting as a profit control authority. When profits arose from efficiency then control would penalise efficiency. "Many present day shortages are due to the fact that the prices allowed mahe manufacture unprofitahle, " said Mr. Heany. ' ' We see no good reason for the appointment of associate members oi vvhom an unliniited number may be appointed, " he said. "Associate members are required to have 110 qualifications except the time and willingness to act as ollicial snoopers and amateur investi* gators into the affairs, boolcs and records of anv business firm. The provisions regarding associate members of an entirely unknown quantity, are repugnant and smack of niethods which typify a totalitarian police State. " The povvers necessary for the operation of a properly constituted Tribunai shouid be granted only to qualiiied permahent officers, said "Mr. Heany, and the provisions regarding associate members sliould be struck out of the Bill. At most associate members shouid be conlined to oue representative of the consumers and one of the distributors but they shouid be shorn of the powers exteuded in the Bill. Objection was also made to puffilic hearings as a general rule, on the grouuds that they would cause the withholding of coniidential information to the Tribunal determining its own procedure and to the fact that 110 penalty had been provided for breaches of secrecv. Mr. Heany suggested that there shouid be a formula ou which prices were to he determined. The penalties provided were too drastic, said Mr. Heany, wlio advocated the deletion of the minimum penalty and leaving the matter to the discretion oi the court. In conclusion, Mr. Heany said the Bill was legislating for a permanent scarcity and that the necessity for price control could only be removed by a greater quantity of consunier goods. The elimination of controls would give iucreased production and the greater availability of goods would result in compptition which would automatically have the effect of reducing prices. I11 answer to a question, Mr. Heany said he would not favour dispensing with prii-e control as prices would skyrocket and some control was. necessary while shortages existed. Tlie time control shouid last depended 011 the nteasures taken to increase production and

equate the supply of goods with the! suppiy or money. • "The New Zealand Manufacturers' Eederatiou has so fur agreed with the 1 principies of the necessity for price 1 control," said the secretary of tlie ; Eederatiou, Mr. D. I. Macdonald, in his I submissions. That did not mean that i the federation accepted the need for price control as a permaneiit feature and Ihe federation was alanned at the Bill 's intention to create another permauent Government department to control prices. As individual industries returned to a norma! state oi' competition, they shouid be freed from the onerous restrictions of price control and the Government had frequently stated tliat its policy was to revoke controls as soon as possible. Mr. Macdonald said the Bill shouid contain a clause making it operative for a specilied terni, say one year, subject to annual review and the necessary modilication of renewal by Parliament at the end of that time and subsequent periods. Tlie Tribunal sliould be placed on a completely independent and judicial footing without dictation from the Government or other bodies. If price control was to be continued, there shouid be provision in the Bill for the activities of the Price Tribunal to be ile(?entrali.sed to the extent at least that district ollicers shouid be empowered to make decisions on routine applications. Mr. Macdonald, ai'ter referring to long delays that • occurred at present, said all possible means of speeding up tlie handling of applications shouid be used. He also made objection to the provision that accounts and balance sheets shouid be pvoduced as there was a real objection to having coniidential documents available to Government departments where they could be peruseii ! by unauthorisd persons. O11 the sub- j ject- of penalties, Mr. Macdonald sak! that in the past the average penalty 1 had been about £5 l()s and now the pro posed minimum was £50 for the indivi dual and £250 for a company. Mr. Macdonald said that salient points in the federation's consideration of the Bill were, firstly, that it shouid fix a definite time (one year) for the operation of price' control, subject to ; review at the end of that period and renewal for a further period only ii necessary; secondly, the need for a numerically small tribunal which was absolutely free from dictation or direc- 1 tion by any outside party and against j whose decisions there shouid be the 1 right of appeal to 'a higher court; j thirdly, that for so long as price control ! was to continue, the act shouid be bmd- j ing on what was probably the largest ! single unit engaged in the provision of I goods and services and whose charges j affected every citizen, namely, the ■ Orown. |