Another Point Of View On Exchange Rate Adjustment

Bay of Plenty Beacon, Volume 13, Issue 7, 13 October 1948, Page 5

Another Point Of View On Exchange Rate Adjustment

It will be recalled that recently the Beacon published a contributed article dealing with the recent exchange adjustment and its alleged detrimental effect on certain sections of the community—farmers and industrialists in particular. That there is another point of view is illustrated by. the following article, which appears in this month’s “Kiwi”, organ of* the 2 N.Z.E.F. Association:— Why all this pother about the exchange? It was introduced by a farm ing Government for the benefit of farmers and they have been beneficiaries at the expense of the New Zealand public ever since. Every man and woman has been contributing to make a gift to the farmers of £25 for every £IOO of butter, cheese and wool that has been shipped and, in addition, local market prices have been based on the overseas prices, a further distinct advantage to ,the primary producers. The policy certainly enabled the industry to become more strongly established; mortgages were paid off, improved plant introduced, a higher average established in the standard of stock with consequent increased and better production. This was definitely beneficial to- the Dominion’s overseas, trade, but. the whole scheme had one serious disadvantage. The New Zealand public had to pay 25 per cent more for imports, together with profits based on the higher cost. ‘ ' The further effects of the exchange’ were visible in the everincreasing price of New Zealand manufactures which were sold at prices comparable to "the imported lines. Moreover, to camouflage the vastly increased costs to the working section of. the community subsidies running into millions of pounds have been paid to various industries —these subsidies were taken from the wage envelope by means of taxation (sales tax and income tax) and it is irrefutable that the industries have had a great harvest. * 1 Wage increases have, of course, been granted to certain sections of the community but comparisons with the increased costs of commodities would be positively “odorous.” Household cutlery has advanced from about 300 to 420 per cent; cups and saucers 620 per cent,, and many other astounding advances could be quoted. ' .