REPLY TO FARMERS

Evening Post, Volume CXV, Issue 71, 25 March 1933, Page 6

REPLY TO FARMERS

MANUFACTURERS' CASE

CALCULATIONS DEFENDED

The following statement is issued by the New Zealand Manufacturers' Federation, in reply to the New Zealand Farmers' Onion:— ' '.- ' ■ .'■ '

Mr. Poison and ihe Farmers' Union do a grave disservice to the farming community when they issue propaganda designed to antagonise the majority of the people of New Zealand who live in the towns and depend on urban industries. All New Zealand manufacturers sympathise with the farmers in their nresent untortunate plight; and we trust that they v\ ill soon be able to reorganise the farming industries on an economic basis. But farmers should not be misled by their leaders into an attack upon manufacturing industries. The country versus town cam° paign has been carried on persistently for many years; and hitherto the towns have patiently refrained from retaliation, town versus country. The farm industries have thus been allowed to obtain privilege after privilege, concession after concession, subsidy after subsidy at the expense of the urban industries, until now the farm industries are costing the rest of the community at least £12.000,000 a year in subsidies and concessions. How this figure, is. made up was shown in a recent •public statement by the New Zealand Manufacturers' Federation.

Now, in their weak rejoinder, the Farmers' Union have not seriously challenged the figures quoted by the Manufacturers. > Indeed it would have been impossible for them to do;so, for our,figures were q.uoted from the Government's appropriations as adopted by;Earliameht.i The only item; specifically. queried' • was one dealing with the cost of. the Agricultural Department. We quoted £189,000; the Farmers' Union say it was £138,000; but the actual net appropriation by Parliament was £595,000. This is unforunate for the union. The manufacturers,.wishing to be very fair, and to understate their case rather than the contrary, had omitted I various items amounting to £406,000. As regards the farmers' benefit by exchange, this was placed ,at £8,000,000, not, as. the Farmers' Union imagines, on a "wild guess," but by a simple arithmetical calculation of 25 per cent, on the value of exports, £32,000,000 sterling. Another serious error in the Farmers' Union statement is: the assertion that exporters are. "compelled to sell at the world price level." . The fact, is that they are selling in a protected market in the United Kingdom under a protective tarifi (in the case of butter) of Iss per cwt., which is now approximately 20 per cent, ad valorem. Moreover, theyr receive the benefit of 25 per cent, exchange, so that their actual receipts are very substantially higher than "world prices."

The Farmers' Union, returning to its attack upon the manufacturers, next observes that the duty paid on imported clothing, hosiery, boots and shoes, and woollen piece-goods amounted to £303,000; and the suggestion is that this was a set-off against the £12,000,000 subsidies and concessions to the farm industries. There are three points which the union did not mention, viz: (1) £300,000 is only one-fortieth of £12,000,000 (2) this £300,000 went to the Government, not to the manufacturers, and if it had not been raised by Customs it would have been necessary to raise it by come other form of taxation; (3) if New Zealand people had bought their own instead of imported goodSi they would have saved the £300,000 altogether—for it would then have been paid for them as taxation on their additional turnover by the New Zealand manufacturers and their additional employees. If the:farmers object to paying duty on imported articles they have the remedy^ in their own. hands. In the Farmers' Union propaganda, as also in the utterances of our, farmerpoliticians, there is, always one other serious misconception'which, distorts their view of all economic questions. There is in New Zealand today a widespread disease which may be termed "export mania." -It is the • erroneous supposition that..our national income .consists solely of the return we receive for our" export's, and the idea that exports constitute.the one all-important feature of our- national life—almost the very reason for our existence. The fact is that our national income, consists- of the return received^ for exports (less interest payable overseas) plus the- value of all the goods and.-ser-' vices produced and consumed in New Zealand. Surely the farmer ..who is producing meat or butter or milk for the New Zealand market is at least as important as the farmer producing for export. So is the. manufacturer who is producing goods for the people of New Zealand. The return from exports constitutes in fact only one-third of our total national income, the remainder being made up of the farm produce and manufactured goods, together with-all .-the other services, produced in New Zealand for home consumption. When' the value of our exports declines,—that is all the more reason to .increase bur, manufacturing inI dustries so that the deficiency in our 'national income may be made good. Indeed, when our exports declined twenty millions, if only we had been able to increase, the output of.our; New- .Zealand industries' by twenty millions, we sKouTd not as a nation have been one penny the worse as a result of the fall in'exports. This, is a fact which the Government and ■peopl*:of New Zealand will, need to realise Wore we can'hope for a recovery of our national wealth arid prosperity. . ' ■■