GOVERNMENT DEFENDED

Press, Volume LXXI, Issue 21409, 27 February 1935, Page 12

GOVERNMENT DEFENDED

♦— "INTERFERENCE IN BUSINESS" NEED FOR CO-OPERATION EMPHASISED NEW ZEALAND'S POSITION [THE PRESS Special Service.] WELLINGTON, February 26.

A vigorous reply to criticism that the Government was increasingly interfering in business was made by the Minister for Industries and Commeice (the Hon. R. Masters), in his address at the seventy-first annual meeting of the Wellington Chamber of Commerce to-night. The Minister took the opportunity to speak of returning prosperity, as indicated in expanding trade, and he referred to the success which he claimed had attended the Government's policy of rehabilitation. Mr Masters, who based his remarks on points made by the president ol the chamber <Mr D. J. McGowan) in his presidential address, referred to the necessity of Government intervention in modern world trade, a tendency which was becoming more pronounced and inevitable, whether it was liked or not. In mentioning Australia's apparent return to prosperity, Mr Masters emphasised that if New Zealand thought to follow the Commonwealth policy of borrowing, and the heavy subsidising of industry with loan money, unemployment could be abolished to-morrow. He expressed the opinion that the more conservative programme followed in this country was on sounder lines. The Government here was dealing with the situation without adding one penny to the national indebtedness. Taking first the unemployment prpblem the Minister said it was pleasing to realise that the position was very much easier. In October,l933 the peak period, New Zealand had 75,24b registered unemployed. The figure had gone down to 52,086, at the end of December, 1934, a drop of 23,000 On the No. 5 scheme, the peak total was 44.743, and at the end of January, 1933, the aggregate working under the .scheme was 32,911, a fall of 12,000. A large proportion had been reabsorbed into industry, and 23,000 fewer were no longer a charge on the fund, and were contributing to the maintenance of their less fortunate fellows.

Australia and Prosperity A pood deal had been made of the return of Australia to prosperity, to New Zealand's disadvantage; but the position as to unemployment over there and in the Dominion was totally dissimilar. Australia was said to be out of her difficulties, but it not generally understood that the Commonwealth had adopted a policy of borrowing, and the subsidising of industry, to meet the problem. "If we were to adopt the samp policy of raising loans for direct relief," said the Minister, "we could abolish unemployment to-morrow. But lor how long? We would be heaping loads of indebtedness on the country by scores of millions of Treasury bills." Mr Masters cited figures showing that Australia had resorted to a subsidy of £5,000,000 for the sugar industry. £5,300,000 for butter, £4,000,000 for wheat, £BOO.OOO for rice ;-.nd dried fruits, and £600.000 for other primary industries. These subsidies devolved as a direct cost to the consumer to maintain prices above world parity. The total annual subsidy on primary products was therefore f. 16,000.000. If New Zealand wished to pursue the same policy, then the Government could give it to the country if it was considered a sound way in which to meet the position. Now Zealand's Trade Evidence of the active condition, both ot New Zealand's export and import trade, was disclosed by the fact that last year exports wc-rc valued at £47,000.000. a figure higher than in any year since 1920. Imports totalled £:il.281,000, a volume also higher than in any year since 1930. The balance of trade in favour of the Dominion was £16,000,000, a figure higher than at any period in the last decade. Men of commerce would agree that the improvement had been very great. The finances of the country similarly reflected return to more prosperous conditions. The customs revenue for the nine months ended on December 31, 1934. had increased by £BOO.OOO, the beer duty had shown a rise of £17.000, and the sales tax, which was a clear indication of the spending power of the community, had in - creased by £300,000 in the period under review. Voices: What about reducing it? The Minister: Nothing would give the Government greater pleasure than to be able to reduce the whole lot.

Continuing, Mr Masters said the film tax, also a sure indication of freer public spending, had risen by £IO,OOO for the nine months. Income tax returns had grown from £511,131 for the corresponding nine moz'ths of 1933 to £956,046 for the nine nontha to December 31. 1934, an increase of nearly 100 per cent. The Minister ;?aid he had realised that if he had started a policy of price fixation, he would not have been able to ;top. Up to Ine present time, he had been successful in not having fixed any prices. The chamber had complained against competition from the railways; but he would point out that selected business men were running the railways. The Government was not doing it. Voices: Let us appoint the Railways Board. Mr Masters: I dare say that if we let you appoint a Government, you would appoint one to suit yourselves. Governments and Business Officially speaking, the Minister went on, he desired to say that the Government had no wish to see governments competing in private business! (Hear, hear.) But the whole position of governments i their relation to business had changed during the last few years, and governments in spite of themselves were being forced into trading. Under the conditions that were obtaining, politics and trade were becoming more intertwined month by month. He predicted that governments would be taking a larger part in trade and commerce in the future. As business men, members of the chamber had one duty to perform, and it was the duty to see that men were put into Parliament who were competent to deal with the new problems of trade, politics, and commerce as these arose. It was not a question of interference but of cooperation.