STABILISED POUND

Waikato Times, Volume 127, Issue 21246, 17 October 1940, Page 8

STABILISED POUND

FAIR STANDARD FOR ALL FINDINGS OF COMMITTEE RECOMMENDATIONS MADE In its recommendations the committee has attempted to ensure that, commensurate with the maximum war effort, (1) sufficient of the necessities of life will be available to all; (2) shortages in the supply of goods will be fairly spread over the whole community; (3) prices of goods necessary for the maintenance of a fair standard of living shall he kept down as much as possible; (4) the goods value of the pound will, as far as possible, remain constant. To the utmost of our ability, and as far as it is possible to do so, without crippling the productive resources of the Dominion, we should pay for the war as we go, firstly by taxation, and secondly by borrowing the savings of the people in New Zealand. The committee is unanimous, however, that even for wai purposes borrowing overseas should be reduced to the lowest possible level in fairness to our British countrymen who are alreadv bearing war burdens much greater than our own. But while labour and materials are available, it would be unwise to refrain from using them in furtherance of our war effort, even if they can only be utilised by financing with money borrowed oversea-.

Increased Production (a) Primary Production.—There is a vital and urgent necessity for the greatest and most efficient production, particularly of those goods Britain specially needs. The committee is impressed by the fact that, although the figures indicate that there is a large number of experienced and inexperienced workers available, there is a seriou* difficulty in filling vacancies on farms. If farm workers cannot be obtained in full supply it is obvious it will not be possible to maintain the necessary volume of farm production. It is, therefore, recommended that the Government give serious attention to overcoming this difficulty which, in the main, results from the disparity between the labour conditions on farms and those obtaining in other occupations. Although New Zealand produces the greater part of its foodstuffs, clothing and housing without much assistance from overseas, practically the whole of the Dominion’s manufactures are dependent, more or less, on imported raw materials. It is clear, therefore, that the quantity of our future imports depends upon the volume of our exports, because nothing can be bought overseas unless the money is available at the place of purchase. (b) Industries and Services.—lncreased production is urgently needed in all industries producing for war purposes, and in some others; for example the footwear, clothing and building trades, which are not supplying fully the normal requirements of the civil population. The committee is agreed that in those industries. where the need for an increase in production is shown to exist, every effort should be made to bring that about by any. or all of the following:— ( 1) An adequate supply of materials. (2) The best possible use of available labour. (3) Additional hours ui work, where found necessary.

With the object of increasing production and of promoting goodwill and smooth working, the committee recommends a greater measure of co-operation between employer and employee and suggests that voluntary committees of employers and employees be set up. Import Control As the volume of imports obtainable is limited, it is essential that the goods most needed to carry on production should be given preference. It is necessary that the policy of import control should be continued. Because of the enormous demands made upon Britain’s productive and financial resources for the prosecution of the war. the committee is unanimous that in common fairness both borrowing overseas and the importation of goods should be reduced to the lowest possible level. Price Control While recognising that the Price Tribunal has exercised a beneficial influence in stabilising some prices, the committee considers that there has not been sufficient control over retail prices. The committee is of the opinion that the administration and policing and the present degree of price control must be greatly improved if control is to be effective. It also considers that the question of introducing a system of legally enforced standards-marking should be examined in order to safeguard the interests of the public. In addition, authorised prices should be clearly marked on all such standard goods exposed for sale. Better results could be obtained (a) by a more rigid inspection system and deterrent penalties for proved breaches; (b) by publication of price increases granted by the tribunal from time to time; (c) by ensuring that where prices are fixed they shall be, wherever possible, for specified standard qualities of goods; (d) by adding a representative of the consumers to the Price Tribunal. To be any value the representative would require to have experience and the ability to protect the consumers’ interest.

Standardisation The committee is agreed that considerable savings could be effected by the adoption of standards. To assist in the stabilisation of prices an effort should be made to standardise a range of essential commodities and ;he present machinery for standardisation should be improved and expanded. Stabilisation of Prices The committee is agreed that it is not possible to stabilise money wages unless essential commodities are available at prices fixed for the same period as money wages. It therefore recommends that, in addition to wages, salaries and rents, the prices of the following categories of essential commodities and services be stablised: Essential foodstuffs, essential standard articles of clothing, footwear, and household necessities; public services, fuel and light. In making this recommendation the members of the committee are fully aware that it is not practicable to stabilise the prices of commodities or raw materials imported from overseas. The committee. moreover, agrees that in certain circumstances, such as short supply or increased prices, the consumption of some imported goods may have to be reduced by all, or other commodities used instead. The committee strongly recommends that every effort be made to ensure that the goods value of the pound will remain constant, as otherwise all attempts at stablisation must fail. Subsidies The committee desires to stress that stabilisation of prices by State subsidies is dangerous, and should be resorted to only when these cannot be avoided and then only under stringent control.

Fundamental objections to subsidising are: (1) It tends to kill initiative by lessening the incentive to aim constantly at improved methods and processes in order to attain maximum efficiency and greater output. (2) It prevents the operation of the natural cure for increasing the costs of one commodity—namely, the turning to substitutes by consumers. (3) If carried beyond very narrow limits it loses its effect and is of no benefit. Rents and Lodging Prices Throughout the Dominion, but particularly in the cities, rent or lodging is taking an excessive proportion of the wages of the average person. The committee is agreed that stabilisation of prices and wages would be ineffective without comI plete control of rents and lodging prices. Housing This problem has given the committee serious concern. It is agreed: (a) That the present rate of buildis well below bare requirements, and therefore some adequate scheme is absolutely necessary. (b) That the capital cost of building houses is unduly high, and that efforts should be made to reduce costs without sacrificing quality. The committee recommends, therefore, that the Government should give urgent consideration to the following questions:— (a) Ways and means of speeding up production, of increasing the number of houses built and of keeping costs down to the lowest possible level. (b) Methods of standardising and simplifying plans of houses; and the desirability of constructing flats in the cities. (c) Giving every encouragement to the erection of houses by those who wish to own their own homes. (d) The remission of sales tax on the major items of building materials. The committee also recommends that a census be taken of available skilled labour, and, if necessary, efforts be made to train additional workers, and that the co-operation of the building trades’ unions be sought. It is also recommended that consideration be given to the possibility of financing the Government housing Scheme by a housing loan, and that as far as possible priority over other capital expenditure be given to housing. Transport The evidence submitted indicated that considerable variations exist in road transport charges, and the committee recommends that a national tribunal be set up to investigate the position and lay down principles for the guidance of the licensing authorities in fixing charges. Public Expenditure In view of the very heavy war commitments the country is called upon to bear, this committee recomments that all State and local body expenditure be carefully surveyed with the object of effecting reductions and economies wherever possible. Savings Schemes The committee recommends the introduction of a popular national savings scheme. Profit Limitation The committee affirms the principle that no one shall profit out of the war. Family Allowances The committee agrees that family allowances are helpful in assisting parents with large families. Publicity

It is true to say that all sections of the community are prepared to make every necessary sacrfice, but they want to be satisfied that sacrifices are in fact necessary, and they want to feel that the equal sacrifices are being made by all. The committee feels sure, therefore, that if the reasons for the sacrifices are made clear to the public by means of adequate and effective publicity the response will be unanimous. It is recommended that in the future a far greater amount of attention be given to the effectiveness of the publicity used. The committee feels that if the best advertising ability is used a scheme could be devised that would ensure a unanimous response from the public to the sacrifices and the proposals that this report contains. Such publicity would be particularly helpful in connection with the proposed national savings scheme.

sumption, and such a position reveals an inflationary tendency. Currency inflation is the most cruel and the least scientific method of making a levy on the people. It presses most heavily on the poorer members of the ccmmuntiy, especially those who have large families to maintain, and those on small wages or fixed incomes. Indeed, every wage and salary earner finds that the cost of living keeps ahead of his wages and thus his standard of living is reduced. In short, if these difficulties cannot be overcome, the poorer people ;.i the community will suffer most by shortage of goods and increased prices. The most effective method of overcoming these difficulties is to secure increased production.