£11,500,000 VOTE

Gisborne Herald, Volume LXVI, Issue 20030, 31 August 1939, Page 14

£11,500,000 VOTE

DEBATE IN HOUSE

RESTRICTION OF IMPORTS

CRITICISM AND DEFENCE

NATIONALISED BANKING

WOOL TRADE CONTROL

(IVr Press Association.) WELLINGTON, this day

The Imprest Supply Bill was introduced in the House of Representatives yesterday afternoon by the Gevernor-General’s message, urgency being accorded its passing on the motion of the acting-Prime Minister, the Hon. P. Fraser.

Opening the debate on the bill, Mr. W. J. Poison (Nat., Stratford) strongly criticised the import restriction scheme, stating that such a policy could not possibly last long.

It: was a story of stupidity, blundering and ignorance of the cardinal principles of economics, he said. Such a policy had never been experienced before in the history of this country or, he thought, in any other country in the British commonwealth. It was responsible for hardship, stress and unemployment, and had brought about the loss, of goodwill between Great Britain and ourselves.

New .Zealand, he continued, was threatened with economic collapse unless there was a change in policy. He quoted a statement the Minister of Finance, the Hon. W. Nash, had made in London to Reynolds News, in which Mr. Nash said that if New Zealand could not receive accommodation in Britain lie would have to return to New Zealand and tell the people of the Dominion they would have to look elsewhere for finance and markets. Was there any other member of the Cabinet who supported such a policy, he asked. He also wanted to know where we would get such markets. Perhaps in Russia, Japan, or even China. Experience Without Precedent Mr. C. A. Wilkinson (Ind., Egmonl) also criticised the import restrictions, stating that the present position was just about as bad as it could possibly be. We were being faced with the necessity for cash payments before goods would be shipped—a position which had never before been experienced by this country.

He realised that the supply of sterling was short and that it would be impossible to meet all charges for goods if they came to charge at once, but something must be done to relieve the present position, which was so serious as 1o amount practically to a tragedy.

He then criticised the issue of import licenses by the Customs Department, stating that often when these licenses were issued to importers they were refused the necessary credits to pay for their goods. It was a case of the two authorities clashing. The whole position was absurd, and he advocated that licenses and credit should be issued by a single authority.

Mr. W. J. Broadfoot (Nat., Waitomo) contended that New Zealand’s credit had been damaged and import business hurt by the Government’s import selection policy. Only One Market

He referred to the visit by Mr. Nasli to America, stating that information had been published that the Minister was prepared to discuss reciprocal trade with the United Stales and finance as well. It was not to New Zealand's advantage to enter into negotiations with America, he continued, because New Zealand had only one market. It was necessary for the Dominion to retain Britain’s goodwill and thereby keep that market.

Mr. J. A. Lee (Lab., Grey Lynn) said that the Opposition members had not said a single word against the financial forces which had compelled New Zealand to make the import restrictions more harsh than was perhaps necessary. Surely it was the duty of the Opposition to fight for the British manufacturer and the British working man as well as for the British money-lender.

Everyone knew why the imports were being restricted, he said. The

Governor of the Bank of England, Mr. Montagu Norman, had driven such a harsh bargain that the British manufacturer had been bilked to assist the British money-lender, and New Zealand was compelled, in meeting the requirements of that bargain, to take steps to ration her funds. ' The Labour Government was not prepared to sacrifice New Zealand every time that prices fell simultaneously with increased productivity, and it had set out to organise the Dominion's economy.

Time-Payment Plan Mr. S. G. He Hand (Hat.. Christchurch North) express :d the opinion that the best way <o get money back into New Zealand was to get the Government to welcome capital and owners oi capital. He advocated patriotic silence by those who could not :;:e any good in capital or those .0 whom it belonged. Sterling was only being made available to-day. he said, criticising the import control policy, on the timepayment plan. It was a sorry thing for the country that payment couk. not be made on due date.

Mr. F. W. Doidge (Nat.. Tauranga) welcomed Mr. Nasn’s return in a few days, because, he said, the Opposition would be interested to learn how he could make his London statements on import control square with the Prime Minister’s statements and Mr. Nash’s own statement at the Labour conference last Easter. He complained of the Government’s interference in business, especially with regard to the internal marketing of fruit and vegetables. Import Selection The Rt. Hon. J. G. Coates (Nat., Kaipara) also urged the Government to make some alteration in its import selection policy, which he characterised as most unsatisfactory at present. While in the past the Government had met arguments against the policy by stating that the manufacturers were satisfied, he doubted if such were the case to-day. With the best intentions, the Government had commenced its present policy and had handed over its control to two departments. He doubted if the Customs Department and its officials were competent to deal with the powers which had been placed in their hands—powers which, in some cases, were sufficient to make or break certain industries. Could civil servants, in all fairness, be asked to handle classes of business with which they were unfamiliar. He advocated that industries should combine with the importers and banks, who, he thought, would be willing to co-operate with tile Government and work out a more satisfactory scheme.

When the House resumed at 7.3 C p.m, the Minister of Industries and Commerce, the 1-lon. D. G. Sullivan, briefly outlined the duties of his department as they concerned the import selection scheme.

He admitted quite frankly that at the moment the -position in regard tc the amount of sterling funds available was unquestionably very acute. ludeec it had (been suggested by Mr. Coates, said Mr. Sullivan, that the administration ef the import selection might be taken out cf the 'hands of civil servants red placed in the hands ol bankers and industry, but the position went very much further than that. If he could use -an analogy, it was like trying to make a suit for a small boy fit a mao three times his size. That was a problem which would tax the ingenuity of the best of experts. It was from, that point cl view that the acute difficulties cf administration in connection with the imports and sterling funds proceeded. Had it not been for the acute shortage,, the 'difficulties would not exist, and the whole thing would -be going cu- like a welloiled machine. These difficulties had little, if anything, to do with the administration by public servants, and business men had always received every courtesy and assistance from them. Secondary Industries

Dealing with the services of manufacturers, 'the Minister said that the New Zealand secondary industries had done a remarkalbly good jdb in filling gaps since the import selection scheme had het'.i. introduced. Mr. .Sullivan announced that a committee had been

set up representative of outside industries, hanks and several departmental representatives to advise the Customs Department on- import licenses, and this advice could ibe .passed on to the Reserve Bank, which controlled sterling credits. He also outlined other steps which had been taken to make progress towards improving the situation, and replying to criticism of the policy of import selection itself, said the principle was in operation in nearly every country of the world, including Britain herself. The Hon. Sir Alfred Ransom '(Nat., Pahiatua) criticised the import selection policy and advocated an increased population. Had we a larger population, he said, we would not be so dependent on overseas markets and would be able to consume a greater proportion of our own produce, but the Government showed no tendency to adopt a policy which would assist in _ increasing the Dominion’s population. Dr. D. G. McMillan (Lab., Dunedin West) said he had a statement to make on behalf of the Minister of

Industries and Commerce. Mr. Sullivan, he said, wished to emphasise that it was a purely temporary and, passing difficulty which was being experienced at present and he had no fear regarding the future. I moor, control, said Dr. McMillan, could not bo effectively operated by the banks and he continued that, in view of the present international situation, wo should build up an internal economy which would make us self-sufficient.

Recent events had proved that wars were not won on the battlefields, but in the realms of finance and he went on to suggest that, to build up New Zealand’s economic self-sufficiency, we should nationalise the Bank of New Zealand, restrict the payment of interest, use public credit -and establish State industries such as woollen mills, coal mines, etc. The Rt. Hon. G. W. Forbes (Nat., Hurunu-i) said that if there was one industry in which the Government was successful it. was certainly in the direction of spending money. The Government, which claimed to be assisting the sheep farmers, had a poor record to show on their behalf. Instead- of receiving any assistance from the Government, the sheep farmer had found his costs had been increased, freight charges had gone up and telephone rentals had been increased, while the farmers had to find £13,000 annually in direct taxation. to keep the local wool-pack industry going. Mr. J. G. Barclay (Lab., Marsden) said that there had been a number of statements by the Opposition that production had declined, but last year we had killed . 1,000,000 more sheep and lambs than in the year before. Did that look like decreased production? he asked.

Mr. H. S. S. Kyle .'(Nat., Riccarton) asked the acting Prime Minister, the Hon. P. Fraser, if he supported Dr. McMillan in his contention that the Bank of New Zealand and the woollen industry should be nationalised in New Zealand. There was evidently a big difference between the Right and the Left wings of the Government and it was no wonder that capital had left the Dominion, even though Government members questioned the patriotism of people who sent their money overseas, said Mr. Kyle. Storage For GO Per Cent Mr. H. G. Dickie (Nat., Patea) said he understood that the Government was going to ask the l’rezeing companies to provide storage for 60 per cent of their annual kill. He deprecated the fact that it was proposed to retain such a large quantity of meat in New Zealand until December and contended that it would be advisable to ship it to Britain where it would be nearer the Dominion’s market.

Mr. Fraser: It is a question of national security.

Mr. Dickie: Then why haven’t we got it out of the -country long ago? He continued that the whole thing seemed like a bad piece of mismanagement between the Government and the Meat Board.

Mr. Barclay: The Imperial Government won’t allow us to send it home. . Mr. A. N. Grigg (Nat., Mid-Canter-bury) expressed the opinion that in connection with import control, the Government should have compiled a list of essentials and non-essentials which would be affected by the scheme. It should have given importers some say in what those lists should comprise. Had this been done, it would have made for sympathetic working of the restriction plan. Mr. W. A. Bodkin (Nat., Central Otago) said that while he did not support the cutting of wages, if it came to a choice of two evils he would favour wage cuts to preserve the value of the money which the workers were earning.

Mr. Fraser, in a very brief reply, referring to Mr. Dickie’s contention regarding freezing companies, defended the Meat Board, which, he said, was .very efficient and -had the full confidence of the meat producers of the country. The bill which provides £11,488,000 for supply lor the months of September and October, was then rapidly put through the remaining sta_ges and passed and the House rose at 11.20 p.m. until 2.30 p.m. to-day.