MOUNTING PRODUCTION COSTS.

Hawke's Bay Herald-Tribune, Issue 111, 27 May 1937, Page 4

MOUNTING PRODUCTION COSTS.

Rising costs in New Zealand industry are beginning to worry the Savage Government, says tbe Sydney Bulletin. In an appeal to tbe aational Labour Gonference Minister Sullivan asked workers seeking furtber wage and boliday improvements to remember tbat costs of local production could be pusbed beyond an economic level. Mr. Sullivan went furtber;— During tbe period Labour has been in pqwer, costs of produetion have bee/i increased by tbe 40-bour week and the restoration of and increases in wages. I am at present inveatigating tbe claimg of a number of industries tbat, as a result of out industrial Jegislation and increased costs, "tbey are no longer able to sustaiu tbeir position in competition witb goods' from overseas. He bas already learned that increase in imports in oue or two of the smaller industries bas reached 100 per cent., "but tbe local market turnover has also increased, so New Zealand iudugtpy may be benefiting at tbe same time ... I have no doubt tbe Government will find a way of solving any difficulty tbat may be proved." One way, comments tbe ' ' Bulletin,' ' would be to feeep its elegtion projnise and r§moye the saleg tax, wbipb fgr the finaneial year ended m March rode on the sboulders of industry to tbe exteut of £3,040,000, an excess of £140,000 over tbe estimated return. But bere tbe Savage Government is confronted witb the obligation of finding money to foot expenditure now 45 per cent, greater than in 1938-33, wben the saies tax wai first imposed as an ' 'emergency" measure. On tbe one band, it must prevent fuTther incyease§ in pjoduetien copts of industries, now sailing glose to werkable murgins, or the mess will tbrow more men on to Government, paysheets. On tbe otbeT band, 1 1 ig bound to improvg tbe gonditiqn.s of tbe elasses tbat daiai tp haye put it in pffipe. An aU-round fall in overseas farpi-produce prices wpuld place tbe Labour Government in a really tougb spofc