DIFFICULTIES SEEN AHEAD

Dominion, Volume 32, Issue 145, 15 March 1939, Page 10

DIFFICULTIES SEEN AHEAD

Importance Of Primary Industries “NEEDS MUST NOT BE IGNORED” A warning' that there were serious difficulties ahead of New Zealand if, in the process of developing secondary production,- the basic primary industries were overlooked, was .given by the president of the Wellington Chamber of Commerce, Mr. P. E. Pattrick, in his address to the annual meeting of the chamber last night.

Much of what New Zealand was doing, and attempting to do, in tlie way of social experiment, depended not only on the maintenance of a high volume'of production at remunerative levels, but also on a constantly expanding national production and national income, said Mr. Pattrick. It was, therefore, doubly disturbing to note that the value of New Zealand's merchandise exports for the calendar year 1638 was £5,337.000, or 12.5 per cent., less than iti 1937. No small element in the decline in production had been the fact that, because of high wages, shorter hours and relatively easy conditions provided bv the Public "Works Department, farmers had had their labour supply seriously depleted. Productive Enterprise. The efforts of the Government to effect a transference of workmen from Public Works undertakings to productive enterprise were to be heartily commended.

The Government needed, however, to shape its course: — First, so that it could not be accused of placing more emphasis .on embryo and potential secondary production (wherein tlie labour absorption capacity had still to bo measured) than on the needs of established and essential primary industries (wherein the shortage of man-power was definite, measurable, and urgent). Secondly, so that it could not be accused of being actuated at the eleventh hour, less by a desire to effect a labour transference to industry because of a clear perception of the needs of industry, than by an anxiety to remove private pay-rolls thousands of men whose present source of remuneration (the Employment Promotion Fund) would disappear on March 31, when new and additional taxation to provide for them would be necessary, unless other means could be found in the short time that was left. Key Commodities. The country could not hope to employ all its people in rural pursuits alone. Not only that, but a country ■which concentrated too exclusively on agricultural and pastoral production must always be keenly exposed to the impact of falling prices in overseas markets. After the example of England, it might even be wise, in the long run, to encourage the production of certain key commodities from a national security point of view upon a basis not strictly economic, such industries to be regarded as a form of national insurance, in the event of war or other national emergency.

There were, however, very serious difficulties ahead of New Zealand if, in the process of developing secondary production, the basic primary industries were overlooked and their needs ignored. “If we take our essentially rural economy as the basis, and on top of that raise a pyramid of desirable diversification of production, we shall get somewhere,” said Mr. Pattrick. 1

“By exchange control and import selection the Government has to a considerable extent insulated New Zealand secondary industry against the competition of overseas goods. By causing available labour to be drawn away from primary production, it has for the time being insulated wages from the effect of overseas prices. But if, because of high costs of production, the products of -secondary industry cannot be exported, that is where insulation breaks down.”