TRADE BALANCE

Waikato Times, Volume 127, Issue 21189, 12 August 1940, Page 9

TRADE BALANCE

INFLUENCE ON COURT EFFECTIVE WAGE RATE HIGH LEVEL ESTIMATED In a memorandum attached to the general order of the Court of Arbitration granting a 5 per cent increase in wages, the president of the court, Mr Justice Tyndall, states that if no increase in the retail price index occurred in the coming six months, an addition of 5 per cent would make the effective wage index identical in value with the highest figure on record, namely, that for the calendar year 1938. Assuming that the retail price index increases during the next six months at a rate comparable with that of the past six months, then a 5 per cent rise in nominal wages will result in an effective wage index almost identical in value with the average level enjoyed by the workers over the past three to four years. Record Trade Balance With regard to the economic and financial position, which the Court was required to consider, His Honour indicates that the majority of the Court attached special importance to the external trade figures for 193940. “It will be seen,” he states, “that the position in regard to exports is very healthy, the value, £65,800,000, being the highest for any production year on record, and that the apparent trade balance is £19,800,000, also a record figure.” His Honour concedes that the figure for imports, £46,000,000, is probably £2,000,000 or £3,000,000 below the actual payments incurred by importers, owing to war conditions. Nevertheless, in his view, the statistics show the trading position to be very satisfactory. The substantial increase in exports can be expected to be followed by a substantial expansion in the next year of sheltered production for the local market.

After giving full regard to the uncertainty of trade in wartime, he feels that the immediate outlook for the Dominion’s exportable products is generally satisfactory in the prevailing conditions. All indications point to increased factory production in the current year, provided adequate supplies of raw materials are available. Britain and Australia After pointing out that wages in Britain have been very materially increased during the past nine months, following a considerable rise in the cost of living, and that lesser increases are reported from Australia, His Honour states that, taking all the relevant factors into consideration, he is led to the conclusion that a 5 per cent, increase in rates of remuneration is justified by the conditions existing. His Honour points out that the Court’s powers under the regulations are limited to the variation of rates of remuneration and do not extend to any other conditions of employment, such as hours of work. The workers, he says, claimed an increase of 9.6 per cent., equal to the rise in the retail price index since September 7, 1937, the date of the Court’s last pronouncement on rates of wages. However, the figure was increased to 10.6 per cent, on the basis of later official statistics. War Taxes Disregarded During the hearing several references were made to the special war taxation. His Honour remarks. If the Court were to take into account the impact of this taxation on the workers, it would in effect be reviewing the decision of the Legislature. “I do not propose, therefore,” he adds, “to take into account the na 4 lonai security tax and the other special taxation primarily imposed and specifically earmarked by war purposes.” His Honour gives reasons at length for declining to take the date of the Court’s last pronouncement as a starting point. The pronouncement, he states, was purely a voluntary statement by the Court, designed to give an indication of its future policy in dealing with industrial disputes and to promote agreements by conciliation. It did not immediately increase wages rates, and a very large proportion of the workers did not, and were not intended to, receive the benefits of the policy then announced until some time in 1938, and in some cas es not until 1939. Moreover, the pronouncement dealt only with hourly wages for casual

workers, and did not cover weekly wages or those of workers in regular employment. Appeal for Production The memorandum devotes considerable space to a consideration of arguments presented by Professor C. ; J. Tocker, a witness for the employers, to show the dependence of local sheltered production, and of New Zealand’s prosperity in general, upon receipts from exports. In affirming the probability that factory production will expand if sufficient raw materials are available, His Honour adds: “On the other hand, the war must be paid for and a reduction in standard of living for the people of the Dominion as a whole is inevitable. The extent of that reduction, so long as Britain is able to purchase our produce at present prices and our shipping facilities are maintained, is principally influenced by our production. “I feel it is not out of place for me to stress to the utmost the necessity for increasing our productive effort. The withdrawal of manpower from industry for military service necessitates greater individual effort to maintain production; to increase production involves still greater effort.” ~