SUBSIDIES INEVITABLE

Chronicle (Levin), 13 June 1946, Page 6

SUBSIDIES INEVITABLE

—Press " Assocmtion

MAKING STABILISATION WORK

By Telegraph-

W JJJjxjXJN LrTUJN, JUne 12. Suhsidising was inevitable and inescapable, and necessary to make stabilisation work, said Hon. A. McLagan, M.L.C., the president, a,t the annual conference of the New Zealand Federation of Labour, which opened at Wellington yesterday. Even if' working people paid the whole amount of the subsidies they would still he the gainers, he said. "We have no option but to maintain , some inefficient units of capitalism in production," Mr. McLagan said. "If we had condemned inefficient units to unprofitable production they would not have carried on." Any attempt during the\war to do away with capitalism would have decreased production and would not have been justified, said Mr. McLagan," when replying to criticism that subsidies had strengthened the position of capitalism. The conference approved that portion of the annual report which reaffirmed the federation's adherence to a policy of stabilisation under a Labour Government and envisaging a continuance of subsidies. Discussing stabilisation in the president 's annual report, Mr. McLagan said that the federation urged increased production which would be rewarded by a higlier standard of living and iiuproved conditions of employment for workers. It would support an interim policy of the encouragement of lirms and industries which could ■ show increased production of essential goods. "■The Nevv Zealand Federation of Labour reaffirms its adherence to a policy of stabilisation under a Labour Government as one of the necessary prerequisites of economic justice under iinmediate postwar conditions," said Mr. McLagan. ' ' One good reason was that the period following a world war was generally more fraught with danger to the economic well- being of the people Than the period of actual eombat. " To overcome the disparity between the higli volume of money in circulation and the lovv level of consumer gouds it was necessary to ehange from vvartime to peacetime production as quiekly as possible," said Mr. McLagan. "With the return of the demobilised servicemen to industry and an increase in the volume of goods, money takes on greater purchasing value. "When stabilisation was introduced it was not the purpose of your executive that all wage rates and ali conditions of employiuent be fixed aud he'ld. The aim was to improve the general standards of those performing tlie useful work of the nation as a means tovvards iinai victory over the forces of Fascism and to UjChieve security. "With peace our policy remains one of supporting an elastic form of stabilisation baving for its end the removal of injustices, the control of prices, and the increasing of the volume of essential goods relative to purchasiiig power." The secretary of the federation (Mr. Iv. Baxter) said there was an erroneous impression that stabilisation was a /T¥ P.GtK. federation was to seek, under stabilisation, removal of injustices and anomalies. "The time may not be far distant when we will have to have a federation wage policy, particularly for essential industries," Mr. Baxter said. In ansvver to a question, Mr. McLagan said he believed the federation could quite usefully attempt to bring all partios concerned together for a new stabilisation conference. "If we are unable to get them all together," he said, "I feel we should get those we can to take part." Increased production would strengtlien "Labour, concluded Mr. McLagan. He urged retention of stabilisation, vvith sufficient elasticity to nieet postwar conditions.