EVADING THE REAL ISSUE

Evening Post, Volume CXXVIII, Issue 117, 14 November 1939, Page 8

EVADING THE REAL ISSUE

The explanation given. by the Minister of Customs of import control will not satisfy the people Who know the rest of the story. Mr. Nash presented the system as one to which there was no alternative except the unemployment of thousands of men and suffering for their families. The inference Was that the Government had discovered a method by which hardship might be avoided,, industries fostered, essential requirements obtained, overseas obligations met, and prosperity continued. The Government has' discovered nothing of the kind. It has only found a way of side-stepping the issue for a while, and continuing the prodigal expenditure which is the prime cause of the trouble. Thjs way subjects a section of the-community, the importers, to disproportionate hardship, but with the certainty that ultimately all sections will be involved, because the real remedial measures have been shirked. This would t have been made fully apparent if Mr. Nash had explained at the outset now the shortage of sterling funds arose. He did not do so in this address, and his explanation on a previous occasion was, as we pointed out at the time, quite inadequate, because it left important factors out of the account. The real trouble was that the Government's blundering policy had overtaxed the resources of the country, exhausted reserves, and broken down confidence. The Government jcame into , office with the boastful I assurance that it had a plan, for permanent .prosperity. All unemployment would be ended and industry would flourish. It was soon found that this plan was nothing more thair spending, higher wages, shorter hours, and the lavish distribution of a revenue increased by higher taxation. It was proclaimed that more purchasing power in the hands of the people would achieve the miracle, that all that was needed to establish and expand industries and make work for everyone was that everyone should have more money to spend.; - In vaift ;the warning was given that the extra rijoney was being diverted to the purchase of imported goods, that industries were being handicapped by increasing costs, and that the unemployment cure by public works expansion and high spending was just laying up trouble for the future. The Government refused to listen. It tried one expedient after another in the attempt to prove, that its original plan was right. Higher duties, the Industrial Efficiency Act, and public works on an expanding scale were tried, and gave temporary relief, but only at the cost of making the real problem more difficult. All this was not explained by Mr. Nash. He did not say that the' Government had given the country a false and temporary prosperity by living right up to the income of prosperous years, and beyond—by living on capital. He did not admit* and the Government will not admit, that the Government's mistaken policy is at the root of all the difficulty, that the alleged "insulation" of New- Zealand is an illusip#, that all that has been achieved has been the "insulation" of the country from the sources of assistance which might have been drawn upon if a policy inspiring confidence had been followed. The Government did the country the greatest disservice when it concealed, for political purposes, the state into which the national trade and finance had drifted. Had it acknowledged the facts of which warning was given it would have been seen that the platform of a grandiose Social Security scheme and even greater expenditure was rash and imprudent in the extreme. Such an. acknowledgment was'not made, and the remedies, which should have been promptly applied, were deferred, making the trouble

much more acute

The difficulty is greater now than it was a year ago, and import restriction is more severe. This is in spite of the help obtained by export credits—help which more than offsets the extraordinary defence imports necessitated by the ''war. The war cannot be blamed. The difficulty will continue to grow in intensity, and the effects will be wider spread until the Government frankly recognises that its policy of spending a way to prosperity is dangerous and unworkable. It must change the policy. Eighteen months ago, when sterling funds were still abundant and confidence yet remained, a change could, have been made from prodigality to prudence, and there would have been little hardship for anyone. The longer the task is shirked the greater will be the cost in hardship. Already the way of compulsory payment can be seen in the inflationary rise in costs of living and costs' of production which constitutes the most insidious form of taxation and wage reduction., This is.paying for the Government's plan, and the payment will be. higher and higher till the plan is abandoned.