MINISTER’S REPLY

Dominion, Volume 36, Issue 20, 19 October 1942, Page 6

MINISTER’S REPLY

Reference To Danger Of Inflation AMICABLE SOLUTION EXPECTED Opposition criticism of the retention of the additional wool payment made by the British Government was replied to by the Minister ol Marketing, Mr. Barclay, and the Minister of Supply-and Munitions, Mr. Sullivan, during the second reading debate on the Finance Bill (No. 2) in the House of Representatives on Saturday. Mr. Sullivan said he regarded the speech of the Leader of the Opposition as inflammatory and calculated to create sectional feelings with damaging results on the economy of the country. Mr. Barclay .said he had called a conference of the Sheepowners’ Federation and told them that because there had been an increase that was no reason why -the consumers in New Zealand should have to pay more for their woollen goods. It was suggested at the conference that a subsidy to offset that should be made from the Consolidated Fund. That would have meant that the workers and taxpayers would have to contribute money so that the woolgrowers would get their increase, and he was opposed to that. To give the 15 per cent, increase would Increase woollen goods from the mills by 4 to 5 per cent., said the Minister. It was stated by the Treasury that payment of the full amount would mean inflation and he agreed with that view. When the workers sought a 5 per cent, wagedncrease Professor Tocker and the Press had said that would mean inflation and then argued that the 15 per cent, payment to the woolgrowers would not mean inflation. . The Minister said members of the Opposition were trying to make political capital out of the position. They had changed the tune from coal or chaos to wool or chaos, at the tiine the Government were trying to effect stabilization.. “I ask the Opposition who is to provide the £200,000 required to retain domestic wool at its present price?” continued Mr. Barclay. “There are only three ways of doing it. Either by reserving part of the payment from the British Goverment, or by the Consolidated Fund, or by the consumers. The Government has chosen the first course.”

Margin of Disagreement.

“Negotiations are proceeding between the Stabilization Committee and the Sheepowners’ Federation with a view to a solution of the question,” said Mr. Sullivan. “The margin of disagreement has been narrowed down and I have not the slightest doubt that the question would have been amicably settled. What will happen now I cannot say, because the atmosphere created by the Leader of the Opposition and the deputy leader who has just sat down will be anything but helpful.” Speaking about the internal economy of the Dominion the Minister said that,'unless a ceiling could be placed upon income the lid would be off completely, with the Arbitration Court going full blast, with wage increase applications and Inflation weil under way. Stabilization had been agreed upon in principle by all sections of the community. There was no intention of depriving the farmers of any of their money, but only of withholding a portion of it in reserve with a view to assisting economic stability. In any case the woolgrowers had not asked for a price increase. It had come out of the blue. ■ The banking world in New Zealand, continued. Mr. 'Sullivan, was definitely of the view that an inflationary situation faced the country. In support of this opinion the Minister cited figures showing that in 1939 the national income amounted to £186,000,000, and in 1942 it was £230,000,000, an increase of £44,000,000. On the other hand, whereas the value of consumer goods available in 1939 totalled £135,000,000 this had fallen in 1942 to £85,000,000. Thus the gap between income and goods had widened in tliat period to nearly £100,000,000. “How long can that go on?” asked the Minister. “The whole question of stability has .a close relationship to what is done with this wool money. If Die woolgrowers and the meat producers get increases then the lid is off and other sections will demand increases also. Ttz was most unfortunate that the speech of the Leader of the Opposition was calculated to sabotage the chance of agreement between the woolgrowers and the Stabilization Committee.” . The debate was interrupted by the adjournment.

DRAIN ON MANPOWER Surveys Now In Progress

“I believe our manpower cannot stand the present drain,” said Mr. Lee (Democratic Labour, Grey Lynn) when speaking on the Finance Bill (No. 2) in the House of Representatives on Saturday. “We have got to face up to the situation,” said Mr. Lee. Members had been told how many men were iu the various forces, but had not been told what they had to meet in the future, said Mr. Lee. They should also know what New Zealand would look like when the men being called up were in the field; what industries were going to be maintained and hoii' they were going to lie maintained. While everybody was conscious of the urgency of dealing witli the problem and facing up to it they were drifting on. Tlie Minister of Supply, Mr. Sullivan, intervened to say that surveys had been in progress for some time and had been considered by tlie War Cabinet.

Mr. Lee said he was delighted to hear that. Members were stumbling in the dark. He hoped that as rapidly as the surveys were completed they would also get a statement of manpower targets and be given the opportunity of discussing the future policy of the Government in the House. He believed Parliament was entitled to such a. discussion.

WORK OF PARLIAMENT Second Reading Of Finance

The debate on the Finance Bill (No. 2) began in the House of Representatives on Saturday morning. The second reading of the Bill was formally moved by the Prime Minister, Mr. Fraser, who said that in view of the miscellaneous clauses in the measure he would give explanations of them in the committee stages. The opportunity was taken by members of the Opposition, however, to discuss the action of the Government in withholding the extra wool payment made by the British Government. Though no progress was made with the Bill, which was still at the second reading stage, the Prime Minister did not ask the House to resume after the luncheon adjournment, and the House rose at 1.5 p.m. till 2.30 p.m. today.