SURVEY REQUIRED

Evening Post, Volume CXXVI, Issue 137, 7 December 1938, Page 14

SURVEY REQUIRED

DEVELOPING N.Z.

LUXURY IMPORTS

"NOTHING TOO GOOD

FOR PEOPLE"

Referring to the procedure arising out of the insulation plan, Mr. Savage said that there would have to be a survey of what was happening in the Dominion; Manufacturers would have to be advised from time to time as to what was needed. "We cannot afford to be working in the dark and taking unnecessary fisks," he said. "This action we are taking is not just for the purposes of meeting an emergency. It is for the purpose of developing New Zealand. It is one of a number of ways that might be adopted, and while our methods might be altered, our objective will never be altered. 1' Asked whether luxury classes of imports were likely to be affected, Mr. Savage said that the luxuries of today were the necessaries of tomorrow, and there was nothing too' good for the people of New Zealand. Some people had luxuries as well as necessaries, and a lot of those who had luxuries ha less claim to them than a lot of people who did not even have the necessaries. "Our job i's to provide a foundation for all," he said, "starting with first things. The best music, the best means of travel, the ; best education, the best of everything, .is good-enough-for the people of New Zealand, and that is our objective." LOCAL INDUSTRY. Questioned as to how far the Government had progressed with its scheme for the encouragement of local industry, the Prime Minister said that it had already been engaged in a survey of the position, and would shortly be busy in establishing the machinery that would let the manufacturers know exactly where they stood, what was expected of them in various lines, and what they could expect from the Government. "It is not sufficient to tell the manufacturers that they should expand for twelve months and then leave them high and dry at the end of that period," said Mr. Savage. "When they are asked to expand their production and output they have to have some reasonable security that there is a market for that output, and it will be our job, as rapidly as possible, to make that information available to them. We are working on it now, and we will have more* in the way of machinery that will make for the peace of mind of our manufacturers." The Prime Minister pointed out that in the field of production they were not confined only to the secondary industries. "We have to give some attention to the primary industries," he said. "Take the question of land for settlement. We have to put into .practice ideas that have already been expressed by Mr. Webb and Mr. Semple and other Ministers of the Crown. We have talked about the desirability of having land in a state that is almost ready for an immediate return to the occupier. It is on those conditions that the farmer of the future will be asked to work. He will feel more (secure than he did before, when he, spent his last shilling in paying a deposit for his land, and the rest of his life in worrying how he was going to get out of debt. "ATTEMPT TO BUILD NEW ZEALAND." "This is really an attempt to build New Zealand," said the Prime Mm

amounting to about £12,000,000 in the case of the Government and to about £2.000,000 in the case of local bodies, the Government arranged with the banks for the formation of an exchange pool. Following the establishment of the pool, economic conditions improved and it was possible to sell Reserve Fund securities without loss. In addition, a long-term ' loan of £5.000,000 was raised and the Government's exchange requirements for the year were reduced to about £5.000.000. Exporters condemned the action of the Government, the contention being advanced that exchange should be left free to find its own level. This was due to an expectation that in a free market, and with the knowledge of the unusually heavy obligations of the Government and local bodies in London, the exchange rate could be forced up to even as high a point as 40 per cent. The trading banks, however declined to make any alteration in the exchange rate. Speaking at the annual meeting of shareholders of the Bank of New Zealand on June 17. 1932, the chairman' of directors (Mr Oliver Nicholson) made the following observations: "With the exception of one bank, it was felt that having regard to their balances in London, and the prospective surplus of exports over imports for the season, no change could be justified. It is certainly not the business of the banks to adjust exchange rates to meet variations in the price of produce Nor can they be influenced by the rates prevailing in other countries which are our principal competitors in the London mai'ket. . . . Further, control of the exchange enabled the banks to prevent the flight of capital from the Dominion, also to prevent New Zealand's funds in London being used for the benefit of Australia."

ister. ''Anyone who attempts to build New^Zealand and lift the standard CZ life without taking a reasonable measure of control of our overseas trade* will fall down on the job.

"That is my reply to those peoplo who thought it was just a political 'stunt' when we tajked about insulating ourselves from unfair competition overseas. Let me repeat that anyono who tries to lift the standard of'living without protecting those engaged in the work will be disappointed." v

Mr. Savage said that every time a Government lifted its Customs tariffs it was trying to insulate the country *' concerned against shocks from the put- >

side world. That was the main, reason for tariffs. Some people had argued tariffs from the revenue point of view. "We never have," he continued. "We have had to accept the position that we have inherited, but we have never argued tariffs as a means of getting revenue. *

"There is no one who can say, that what we are doing is not ah honest" attempt to lift standards in New Zealand. The relations between ourselves and Great Britain will not be altered. It is still our desire to expand our trade with Great Britain, and it, is still possible to do that We have already' undertaken in Britain to spend every, shilling we get from them with them. We cannot do more than that." DURATION OF PLAN. V Questioned as to the duration of the control plan, the Prime Minister said: "It will be for ever, I hope." He' recalled how he had an Australian interviewer, in reply to a. question as to what were the first steps the Government intended to take to establish Socialism, that the first step was taken when the Maoris arrived in New Zealand. "Our standard : of life has been increasing all the time • since then," he continued. "We have i had periodic setbacks; the last of them • being from 1931 to 1935;^^Bvtfw&lisnrea, been going ahead since then, and we are going to keep o« going ahead.. .•..■>: "It has been suggested that 4he onlyway to reduce the debt overseas is to lower the standard of life in New Zealand. I am not going to take that bad advice. This Government is not going to be responsible for any reduo tion in the standard of life. It is not necessary, and it is certainly not desirable." ■- i INTERNAL LOAN. The amount of the internal loan that the Government intends to raise and the details connected with it have not yet been determined, said the Prime Minister. He said that the policy of the Government had always been, and was now, to use the sayings of the people, plus the public credit. People had to be given an opportunity to invest their savings. - During the election campaign attempts were made to suggest that the Government was going to commandeer the savings of• the people, said Mr. Savage. "That was stated by our political opponents. The truth was that we were simply going to in the ordinary way, help the people to invest their savings with the Government and pay them a reasonable rate of interest. That was the policy of the Government from the start," said the Prime Minister, "and it is now." i Mr. Savage stated that whatever, might? be said about the overseas position, the worst phase was the overseas debt, for which the present Government was not responsible. "Our job is to see that our obligations overseas are fully met," he said with some emphasis, "and we intend to do that, whoever was responsible for them. It is. just as well to remind our political opponents that it was their policy that made the position overseas what it is today."

All New Zealand could get from overseas were goods and services in payment for goods and services exported, but unfortunately the Dominion had to send a lot of goods and services to meet its debt obligations. "I am not complaining about that," said Mr. Savage. "I am just stating a plain fact for the benefit of our political opponents. Those who have invested in New Zealand securities need not worry because of any' statements lam making. We will meet, our obligations to them all right."