Danger

Thirdly, a point of agreement between us. "To make the New Zealand economy stable, costs and profits must be lowered" he says. JB is afraid that our new internal cost structure will be too high, that this will make our primary produce too dear to sell to overseas customers at its cost of production, and that our local industries will be unable to produce goods at a price to compete with imports. That is the danger we face, and I assent, that the abolition of imports is a step to meet it. This is I believe, because:

1. "Costs" viewed from a national (small "n") point of view are not increased. The wage earner who maintains his standard of living with a wage increase to compensate for subsidy removal consumes no different proportion of the national income than before.

2. The employer must then base his prices on these full and real costs. It is at present impossible for, say, a woollen mill to sell at spuriously competitive prices because of the wool, coal, freight and wage subsidies. (By wage, subsidies I mean that part [unclear: of] the worker's cost of living at present met by [unclear: subsidies.)]

3. Some industries might find it [unclear: impossible] to recover the full extra coats, either because of cheaper imports (where permitted) or consumer resistance, e.g., (the radio industry. This will mean reduction of profits and/or payments to workers. I regard the payment of wages and bonuses in excess of award wages as part and parcel of the high profits accruing to the employers in many businesses. As long as the product sells, employers will, pay the high wages. I am not attacking the wage structure (I want to make that clear) but I am protesting at spuriously high payments in excess of wages in comparable fields.