RISING COSTS

Wairarapa Times-Age, 7 October 1938, Page 6

RISING COSTS

FARMERS & MANUFACTURERS CONCERNED JOINT STATEMENT MADE TO GOVERNMENT. EARLY CONFERENCE URGED. (By Telegraph—Press Association.) WELLINGTON, This Day. The following joint statement has been issued by the New Zealand Farmers' Union and the New Zealand Manufacturers’ Federation: — Some six months ago representatives of the New Zealand.Manufacturers’ Federation and the New Zealand Farmers' Union met to discuss matters of vital interest to both bodies. Several meetings were held, and the question of joint co-operation was discussed by the annual conferences of both the Federation and the Farmers’ Union. It was felt by members of both organisations that there was a mistaken idea prevalent that both primary and secondary industries were in a very favourable economic condition, and it was decided that statements should be published in order that the people of New Zealand should be made aware of the true position. It was agreed that these statements should be presented to the Government before publication in order that any comments which the Government might care to make could be published along with them. The first statement was presented to the Government, some weeks ago, and it is herewith released for publication together with Ministerial correspondence in regard to it. COPY OF STATEMENT. The present position and the trends apparent therein are causing grave concern to the producers of the country. The New Zealand Farmers’ Union and the New Zealand Manufacturers’ Federation accordingly feel impelled to join in setting out facts which theyl considei 1 should, in the interests of the Dominion, be fully disclosed. It has been manifest to both organisations that economic conditions in New Zealand are encouraging a state of affairs which must react to the detriment of the whole country, and both bodies consider it imperative that attention should be directed to the consequences which must ensue should present trends continue. In our opinion, the result of these present conditions ruling in New Zealand must be a definite decrease in national production. Costs today are at the highest level they have ever reached in the history of the Dominion, and, moreover, they show no tendency to fall, but, if anything, appear to be continuing their upward trend. On the other hand, overseas prices have been steadily receding during the past year, and, as evidence of this, we furnish the wholesale prices index number published by the British Board of Trade which shows a steady drop from 111.5 in July last year to 100.7 in June of this year. DROP IN OVERSEAS PRICES. This drop in overseas prices is transmitted to New Zealand in two ways. We must expect lower prices in the sale of our primary produce overseas, with the result that land, on the margin of cultivation in New Zealand is forced out of production; secondly, the lower priced imports drive the New Zealand manufactured goods off our local Dominion market. This has already occurred. The net result is, therefore, a decrease in production, both farming and manufacturing. -The drop in manufacturing production is already manifest and it appears certain that the drop in primary production will follow. Possibly the 61 per cent reduction in the dairy industry is evidence of this. There are, therefore, two influences which will effect a fall in our national income. The first is through a shrinkage in the price we receive for our exports and the second is the shrinkage of both farming and factory production to which we have already referred. Unless falling prices are matched by decreased costs the greatest difficulties result. In New Zealand today, decreased prices are being acco’mpanied by rising costs and there can be only one result—a fall in the real national income at a time when the State is making heavier calls on it by way of taxation than ever before in the history of the Dominion. NO CONFERENCE MEANTIME.

Acknowledging on September 30 last a copy of the above statement, the Hon P. Fraser stated that the importance of the matter raised was recognised and suggested that the best method of dealing with the question would be to arrange a conference with the Minister concerned. He added that at the moment it would be difficult to arrange this, but that if his correspondents got into touch with the Minister of Industries and Commerce, the latter would be glad to arrange a conference as soon as possible. On October 1, the Dominion Secretary of the Farmers’ Union wrote the Minister of Industries and Commerce (the Hon D. G. Sullivan) asking whether a conference could be arranged and suggesting, in order that the joint

statement might not be held to have a party political significance, that the conference be held not later than October 6.

Mr Sullivan replied on October 3 regretting that it was not possible to arrange the conference just at present and offering an assurance that every effort would be made to do so at the earliest possible moment.