EXPANSION OF N.Z. MANUFACTURES

Dominion, Volume 37, Issue 16, 14 October 1943, Page 4

EXPANSION OF N.Z. MANUFACTURES

Appropriate Conditions

THREE ESSENTIALS STATED BY PROFESSOR

Dominion Special Service.

AUCKLAND. October 13.

•‘I would agree with Hie president of tlie New Zealand Manufacturers’ Federation that, under appropriate conditions, it is desirable that we should expand manufacturing industries, but I am by no means confident that these conditions will be ensured,” said Dr. H. Belshaw, Professor of Economics at the Auckland University College yesterday, when asked to comment on the presidential address delivered at the federation’s annual conference in Napier. , n “During the recent election comptiign, Professor Belshaw added, "Ministers of tile Crown gave a tolerably close indication that our pre-war policy of economic nationalism would be continued through our system of import and exchange control, thereby in the spirit at least denying the Atlantic Charter; for under such a system the temptation to maintain or establish uneconomic industries is likely to prove irresistible. “The conditions necessary to justify a policy of expanding manufactures are, first that this should be preceded by a comprehensive survey to determine the potentialities of manufacture in relation to prospective demands. Such a survey should be objective, which means that conclusions should be based -on economic and technological considerations, not political. Even if final decisions are made on political grounds it is desirable to know the economic cost of concessions to political expediency. “The second esesntial of a sound manufacturing policy is that the industries which are encouraged should be those which are economic. This means that, though temporary assistance may be necessary, industries should be able when established to continue without artificial props. Generally, they would be such as reach their most efficient size while still of comparatively small scale. The third condition is that, where necessary, existing manufacturing industries should be rationalized, which implies that they should be reorganized t<) achieve the maximum possible efficiency. “This may require painful readjustments in some cases,” said Professor Belshaw, “but one is not being unsympathetic to the claims of manufacture,. or swecpingly condemning manufacturing concerns as inefficient, to suggest that in some cases at least protection at the expense of the consumer might be unnecessary if effective reorganization were undertaken. . Further highly desirable conditions are the continuance and expansion of research facilities io aid manufacture, and the reorganization of financial methods to offset the disadvantages which the small manufacturer in particular may suffer owing to our comparatively undeveloped capital market.”