DOMINION POLICY

Gisborne Herald, Volume LXVI, Issue 19982, 6 July 1939, Page 13

DOMINION POLICY

ATTACK IN HOUSE EIGHT POINTS URGED FAILING N.Z. CREDIT ANSWER BY MR. SAVAGE SIGNS OF PROSPERITY (Per Press Association.) WELLINGTON, this day. The House :of Representatives met at 7.30 o’clock last night for the continuation of the Addres's-in-Reply debate. The Leader of the Opposition, the Hon. Adam Hamilton, in opening the case for his side of the House, stated ’.here (were very an,any matters to. discuss in the Dominion’s' present-day conditions. • We had experienced' some 100 years of our existence, he said, and, in the past, our conditions 'had been the envy of the world. In discussing Dresont-d'ay conditions, he added, the Opposition was not on trial; it was the Government which was on trial and the Opposition’s task was to examine and criticise the (results of Labour's policy. After discussing the GovernorGeneral’s speech and the policy of the Government outlined in it, Mr, Hamilton went on to refer .to what he termed to be the present financial crisis, and said 'the Government was blaming the weather for the farmers’ present difficulties. In the outline of the Governments programme contained in His Excellency’s speech, Mr. Hamilton considered that tt‘he proposal to revise taxation was a measure which would have a sting in it. Mr. Hamilton then moved an eight point amendment to the motion that the respectful address be presented to the Governor-Genera 1 to the following effect: — (1) That the Government has failed to give adequate attention to the primary question of providing the man-power and 1 training and equipment necessary for national defence. (2) That the Government has pursued such a spendthrift policy that it now finds itself with London reserves depleted, with the Reserve Bank strength exhausted and the general reserves and credits dissipated, all resulting in a shortage of money that has forced interests rates up substantially, and sent the Minister of Finance post haste to London seeking money to carry on. (3) That the imposition of import and export and. exchange control to avert financial disaster is the direct resuft of the Government’s neglect 1 _ df’■ prudent foresight and its failure to conserve the financial resources, and that the introduction of these regulations has damaged l our good ..name, and credit, deprived a section of the community of its livelihood and has caused acute business and trade dislocation. (4) That the Government has failed to promote peace in industry and that the work of the Arbitration Court has been seriously impaired, resulting in serious trade disturbances and costly bold-ups. (5) That while denying there is any unemployment, the Government in the last financial year spent a record total of £6,474,000 on the relief of unemployment. This amounts to slightly more than £3 a week for 40,000 unemployedl men for a. full year. (6) That the Government's policy 1 in increasing the cost of living has been a betrayal of many wage and l salary earners, and is equivalent to « substantial cut in their reaL Wages and' salaries, thereby reducing purchasing power.

(7) That the administration of native -affairs is unsatisfactory and the Government’s undertaking .that natives should participate in the development of their own land -has not been carried out.

(8) That the Government’s policy resulting in ever-rising internal costs in the Dominion has had the disastrous consequences of placing export industries at a serious economic disadvantage and the farmers, particularly sheep-farmers, find themselves unable to meet their farming costs out of revenue; that the Government's ipolicy of Ihigh costs and .making relief works' so much more attractive than productive -employment, is (having the effect of reducing production and is forcing cuit of occupation or proper production much second and third-class -land.

Speaking in support of the amendment, Mr. Hamilton, dealing with defence questions, said it was no answer to the criticism of the Government’s defence policy to say it had spent more in the last three years on defence than previous Governments. He considered that the land defences were lagging behind the naval and air defences.

The Opposition had offered its cooperation, but this had been rejected. He wondered if the Government’s heart was in the question of the defence of the Dominion. iVlr. Hamilton considered that the Government should institute a form of compulsory service for defence. All had a job to db, he said, and the defence of the Dominion was a .serious responsibility.

Speaking of ftie country’s present financial position, Mr. Hamilton stated the country’s total expenditure for 1938-39, was £56,500,000 whereas in 1935-36 it was £33,500,000 an increase of £23,000,000 or 70 per cent in three years.

The Government, he continued, should have made preparations to meet the loan falling duo. It had done so out of the reserves left it on previous occasions, and if it had observed a careful financial policy, it could have had £2,000,000 or £3,000,000 to meet commitments. He wondered if the people knew what the Government’s overdraft at the Reserve .Bank was at present. It was between £23,000,000 and £24,000,000, and when it had taken over the bank there had not been one penny of overdraft.

Were the import and export regulations going to be permanent or merely temporary, Mr. Hamilton asked,- dealing' with this phase Of the Gcwernment’s legislation. The necessity for them showed a lack of prudent foresight. Mr. Hamilton next went on to refer to the industrial troubles which .have been experienced under Labour's administration. “Let us look at the industrial peace which the Government claimed we are experiencing,” he said. In the three years before Labour took office, there were 51 strikes, but in the three and a half years under Labour there had been 189 strikes, 100,000 working days lost and £115,000 in wages lost.

He also stressed the increase in the cost of living, stating that such was the fault of the Government’s policy. Mr. Hamilton concluded by saying that the Government’s insulation policy had failed as the serious plight of the sheep farmers showed. The Dominion once enjoyed a good name, blit the Government’s mismanagement had brought about a state of affairs so serious that something must be done immediately. The Prime Minister, the Rt. Hon. M. J. Savage,- following Mr. Hamilton, contended there was more stability for the dairyfarmer to-day than there had ever been. It was true that the overseas prices for dairy produce had fallen and that unfavourable seasonal conditions had lessened the volume of primary production. For instance, the fall in dairy produce production was estimated at £2,250,000 sterling and the fall in prices represented another £1,500,000 in New Zealand currency.

This represented £4,250,000, but he failed to see how the Government could be legitimately blamed for the weather in. New Zealand or prices in London.

Mr. Savage contended that the reason for the flight of capital .from the Dominion and the reduction of overseas crcuits had been largely

political. For 1-1 years, lie said, from 1920 to 1933, New Zealand had borrowed in London at the rate of over £5,000,000 a year. The total sum borrowed abroad during this period was £73,000,000. There was only one year during that period in which the previous Government had not increased our indebtedness. During this period the annual interest charge rose from £4,000,000 to £6,840,000 in 1931, an increase (if nearly 70 per cent.

These 'loans had, of course, to be repaid or converted and, during the .next ten years loans of the Government’s predecessors amounting to over £100,000,000 had to be met.

After reiterating the statement that the Government was prepared- to spend every possible shilling in Britain, Mr. Savage drew attention to the bankruptcy irate under the National Government. Between 1921 and 1930, he said, when the 'Nationalists borrowed £60,000,000 the average rate of bankruptcy a year was 691 and, of this number, 164 were farmers. The total bankruptcies for 'the 10 years was 6914, of whom 1643 were farmers.

In three years of Labour Government the average had been 240 per annum, with the farmers -averaging only 29.

Did that indicate that the farmers were in a sound position before the Labour Government took over? asked Mr. Savage. Though the Leader of the Opposition had talked a great deal about reducing costs, he wanted to forget the wage-cutting policy enforced a few years ago. No- one on Ms side of the House was prepared to say what should be done -to-day to reduce costs. Mr. Hamilton should study the increased to-tafisator returns, the registration of radio sets and motor cars if he wished to determine the state of prosperity in the Dominion. All those .increases, Mr. Savage said, were due to the increased purchasing power, but that was not the whole story.

They must have increased production' as well and they could not merely turn the handle to create wealth and forget all about production.

The Opposition seemed to forget that when, production increased purchasing power increased also. He added that -the Opposition was charging the Government firstly, that it spent too much on buying overseas goods and! also that it had stopped spending too much. In this fashion, for over three years, he continued, the National Party had been crying “wolf” and trying to belittle the country’s credit, hut they had not succeeded in New Zealand. “We have .to expand New Zealand,” he declared. “We must expand or die. We cannot stand still.

“We must expand, not only primary production, but secondary production, but our first job is to bring about a better balanced production, because otherwise we cannot meet our overseas obligations and take our full requirements at the same time. “Therefore, we have to produce more of the consumable goods required from day to day in New Zealand.”

Mr. Savage contended there was nothing wrong with the Dominion’s credit and the Government had not lost Us good name as suggested by the Opposition. The -imports, 'he continued, were well within .the exports and over the three years of tlhe Government’s rule they had a favourable balance of £26,000,000. If the Government were to go down, he said, it would go -down fighting for the people’s right togovern and when it found itself being dictated -to by financial interests, it would do well to look to itself.