N.Z. AND THE WAR

Evening Star, Issue 23372, 15 September 1939, Page 10

N.Z. AND THE WAR

DCiIKIBN TO USE ALL RESOURCES NO OVERSEAS FORGE AT PRESENT FINANCE MINISTER OH WAR EXPOSES LEGISLATION AND TAX PROPOSALS NEXT WEEK (From Ouk Parliamentary'Reporter.) WELLINGTON, September 15. / An outline of New Zealand’s commitments to Great Britain for the conduct of the war with Germany was given to the House of Representatives by the Acting Prime Minister (the Hon, P. "Fraser) this afternoon. He said there was no intention to send a force overseas immediately. That would not be done until the training was adequate and transport assured. The first section of enlisted men would go into camp at the end of this month. Other bodies of men would be recruited and trained at regular intervals, according to pre-arranged plan, New Zealand would train pilots and other classes of airmen for the Royal Air Force in as large num- , bers as possible and as quickly as possible. CONSULTATION WITH BRITAIN Mr Fraser said that since the outbreak of war the Government had been in consultation with the Government in the United Kingdom as to the means and methods by which this Dominion can best assist in a common cause. “ At our request we have received from the British Government detailed and most helpful appreciation of tho position, indicating the measures which in their opinion would be most opproipriate for the Dominion to take. Every single suggestion that has been made by tho British Government has been accepted and agreed to by the New Zealand Government and is being put into operation as rapidly as possible. “ Indeed, many of them had already been anticipated and put in hand before receipt of the British Government’s suggestions. “We are at present engaged in recruiting a force which, after training, is intended for service either here or abroad in any part. of the world as circumstances may require. The first section of these troops will go into camp about the end of this month, and after a period of training they will he followed by further bodies of men, according to a regular and prearranged plan.

The House will not expect me to indicate in detail the intentions of the Government with respect to this force, but it will be proper to say

that there is no intention, nor is it

the desire of the British Government, that this force should be

despatched overseas immediately. It will not, of course, be despatched until its training is adequate for the task on which it will be employed, nor until safe means of transport are assured. At the same time the force will, as soon as possible, be made and held ready to meet the situation as it develops, and as may be agreed upon between the British and New Zealand Governments. It is not possible to indicate the naval measures that have been adopted, except to call attention to the fact that operational control of the New Zealand Division of the Royal Navy has already been transferred to the Admiralty. THE AIR FORCE.

“ As far as the Air Force is concerned, apart from the measures necessary for the protection of the Dominion, our principal object in the meantime is the training of pilots, observers, and air gunners for the Royal Air Force as quickly and in as large numbers as possible, utilising to the maximum the facilities available in accordance with a plan already approved by both the British and the New Zealand Governments. The House and the country may rely upon it that it is the intention of the New Zealand Government to do everything in its power to ensure that tho "steps taken by New Zealand are worthy of the Dominion. •! would emphasise that in all respects the action taken or to be taken by us has been

and will bo fully co-ordinated with the wishes and actions of the Governments of the United Kingdom and the other dominions. ORGANISING MAN POWER. “ It will be realised readily that for the purposes of a conflict such as that in which we are now engaged, it will be necessary to organise the whole man power of the country to the best advantage, not only for military purposes, but to enable this Dominion to continue to play its part as an important source of foodstuffs and primary products. Clearly the maintenance of farms in New Zealand will be as essential to the Allied cause as the provision of fighting forces. “ Many serious problems are involved in this connection, and, though a considerable amount of attention has already been directed to the question of organising the necossary labour required, it is clear that a great deal further investigation 111113’ be called for. The preliminary steps in this direction are now in hand. “ There can be no doubt that in many cases men who are engaged in essential industries will be rendering greater. service to their country, to the British Commonwealth, and to the Allied cause by remaining at their work rather than by undertaking military service at the moment, and while the Government is anxious to obtain the greatest possible number of recruits for the armed forces, it must at all times exercise due care to ensure that this does not cripple the production of the Dominion, which may be so essential to victory. “ 1 am sure that those volunteers who are told that their services are more valuable in their ordinary work will realise the position, and as soon as practicable the Government will take steps to see that in such cases the man concerned is given an authoritative decision to that effect, which will be iidequato evidence to the whole country that bis duty lies in his ordinary job. Service ic the farm industries can offer opportunities for service for those not eligible for enlistment. BUDGET UPSET REARRANGEMENT OF FINANCE TAXING ACT AMENDMENT The Minister of Finance, the Hon. W. Nash, in a statement to Parliament, said: “ The outbreak of war will upset the Budget Estimates in various ways. The restrictions upon the consumption of petrol will involve a decrease in the Customs duty on that commodity. The Customs revenue will also inevitably bo affected by inability to obtain imports in the same quantities as would otherwise have been the case. Indirectly the sales tax and other items of revenue will also bo affected, but at this stage it is not possible to measure the contraction in the Budget revenue as a whole. On the expenditure side provision was made in the Budget for a considerable expansion of expenditure upon defence. Additional taxation was imposed on that account. However, for the Dominon to play a worthy part in the war will involve an expenditure far beyond that provided for in the three votes in the Consolidated Fund and the vote in the Works Fund. Furthermore, it will be appreciated that it is not possible to estimate for 12, months ahead, even approximately, how much will be spent or to prepare detailed estimates of items of expenditure. Thus it becomes necessary to depart from the usual procedure and .to adopt special measures. WAR ACCOUNT. Accordingly, legislation will be introduced empowering the opening of a War Expenses Account, out of which all the necessary costs for Defence or the conduct of the war can be paid. Provision will be made for the present Defence votes in the Consolidated Fund to be closed, and the unexpended portions thereof transferred to the War Expenses Account vote. Defence in the Works Fund will also be closed, and any expenditure already charged to that vote will be transferred to the War Expenses Account. Thus all expenditure on the war will be pooled in one ac-’ count. The War Expenses Account will be financed as far as possible from revenue, and additional taxation proposals will be submitted next wgek. All must share in the war effort—some by personal service in the armed forces, and the remainder by paying for the maintenance of those forces.

“ While the additional taxation will

reduce the spending power of the people, it may be pointed out that, in the circumstances existing, the standard of living generally depends upon the goods available for consumption. Tho recruiting of men for the armed forces lessens tho labour supply on the one hand, and on the other hand sets up aii. abnormal demand for goods for main ten ante of that force. Greater efforts in the productive field can offset this abnormal demand to some extent. But, otherwise, it is inevitable that less goods will be available for consumption by the civilian population, hi such circumstances the mere maintenance of money incomes cannot maintain the standard of living. We must marshal our forces and direct all available labour into tho channels best calculated to assist the war effort and maintain the production of consumable commodities. WORKS CURTAILMENT, “ As men are withdrawn for military service, public works and other works that do not immediately assist production will be curtailed. Whilst the desire of the Government is to meet the cost of the war out of revenue, as it proceeds it may be impossible to do so, and it will in any case, be necessary to make provision for loan authority, which will be submitted for the approval of the-House. “ Within the maximum contribution to the United Kingdom, our resources should bo conserved as much as possible, and the country should not be overburdened with a huge dead weight of war debt. For these reasons tho loan authority will be used as sparingly as possible. ‘‘Theßeserve Bank credit will be used where necessary, but care will be taken that the use of this credit does not result simply in inflation of currency with its harmful results. “ To sum up the whole problem, a huge and continuous supply of goods and services will be required for war purposes. These can be obtained only by more efficient and consistent work, and better qrganisation. each man in his own job increasing his output, with lower production costs, and by saving, through economy, of consumption 111 other directions. Everyone is in duty bound to do his best in these directions. • TAX AMENDMENTS. “ Amendments to the Land and Income Tax Act will be introduced to carry out tho proposals mentioned in the Budget, and to prevent the evasion of payments; also to remove some anomalies and hardships of the existing law.” NO PROFIT FROM WAR. Negotiations with the Government of the United Kingdom for tho purchase of our primary products were commenced immediately on the putbreak of war and are still continuing. The basis of our representations is that the procedure to be adopted should provide that no advantage or profit shall accrue to anyone on account of war conditions, and working on this basis, some thought has been given to (a) The price to be paid by the United Kingdom for produce from other countries. (b) The price and procedure to be followed by the United Kingdom when disposing of its purchases from the Dominion. (c) The desirability of maintaining the Dominion’s trade relations with other countries. (d) Safeguards to cover advances in prices and other costs of imported commodities, together with (e) The steps necessary to avoid a disorganised marketing system at the conclusion of hostilities. “ Keeping these major points in mind, the Government has advised His Majesty’s Government in the United Kingdom that the whole of the products and resources of the Dominion in the surplus over our own needs are at tho disposal of the United Kingdom.

“ Some time will be required to introduce the necessary administrative machinery in the Dominion, but the general principles have already been determined. If the negotiations are satisfactorily completed the Now Zealand Gpvernment will become the sole buver in the Dominion of all butter, cheese, meat and wool, and these products will be sold direct to the United Kingdom Government, who will be the sole distributor in the United Kingdom. The members of the staff of our marketing organisations in London have been transferred to the service of the United Kingdom Government to carry out the executive work in’ connection with the distribution there. The arrangements will entail an extension of the Primary Products Marketing Act to cover the purchase of meat and wool. d Negotiations with regard to wheat and other exportable products will be opened as soon as the major principles relative to the meat, wool, and dairy produce have been decided. The Government will keep the House informed as the negotiations proceed. FULL FINANCIAL CONTROL. “ Measures will also be introduced to ensure that the Government, has full financial control of the resources of the

Dominion, and the legislation necessary for this purpose will be introduced on either Tuesday or Wednesday of the coming week “ The objective of the Government is to make its major contribution, whatever sacrifices that may entail, to the prosecution of the war. The Government has determined to use all the nation’s resources to this end—personal, material, and financial.