THE BACKBONE OF NEW ZEALAND

Hokitika Guardian, 17 September 1929, Page 8

THE BACKBONE OF NEW ZEALAND

DOMINION’S HIGH CREDIT.

LONDON, August 9.

The “ Times ” on August 7, devoted a leader to s New Zealand’s financial policy, based on the Budget which Sir Joseph Ward presented to Parliament this week. The voters whose support' Sir Joseph won at the last election were very largely the small agriculturists ; these men are the backbone of the country, and one of the chief tasks of the Government is to ensure that they shall prosper and increase. Since the war, says the writer, New Zealand has had more than one difficult period. The present difficulties —persistent unemployment, a deficit of "500,000 this year, and the straitened position of the small farmers—are to lie met in the new Budget on lines evolved to meet them over 30 years ago, when Sir Joseph Ward first made his mark in public finance with his State Advances Office. Land settlement is the basis of New' Zealand’s economic life; mistakes in the nineteenth century as to the terms on which land was alienated have proved the most costly of all mistakes; and Sir Joseph Ward proposes not only to lend money cheaply to small producers, but-to use taxation to hasten sub-divi-sion and to take compulsory powers to break up large estates for closer settlement. This step, again, is nothing new in the history of New Zealand and Australia. At the present'time the trouble is not the unwillingness of the owners to sell, but the price they ask; and once again the high price of improved land in New Zealand is in the forefront of public discussion. There is little question of the soundness of Sir Joseph Ward’s main policy of extending land settlement as the best means of reducing unemployment in the New' Zealand towns. ... It is on his general loan policy that the criticism of the Opposition is most vigilant and acute. The general stringency in the lending capitals of tjie world provides abundant external reason, if any w r ere needed, for New' Zealand to borrow as little as possible just now.

CURTAILMENT OF LOAN EXPEN-

DITURE,

Jt has always been a problem for th rulers of' undeveloped countries how r tr borrow for development without bring ing in so much money that values become inflated, and successive Finance Ministers in New' Zealand have had to steer a middle course between doing less than they might ns lenders to their own people and more than is w'ise as borrowers from outside. The last New Zealand loan, one of £7,000,000, was promptly over-subscribed in London last January. That money has not yet been touched, and the high credit it proved New Zealand to enjoy is plainly an object of equal solicitude both to the Reform and to the United Parties; for Mr Downie Stewart has begged Sir Joseph AVard to curtail loan expenditure, and Sir Joseph AVard, who is finding some of the money for settlements in New' Zealand itself, has made it clear that the point' is his-also. The trade returns show a marked rise in the exports, and there are other indications that there is a good deal o r money in the country and that the present difficulties are more matters of wise public finance than anything else. Sir Joseph AVard’s measures will ho watched w'ith particular interest in Great Britain, as preparing the w r ay for a resumption of assisted settlement from this country.

But, while we follow New Zealand’s efforts to extend her trade, we shall do well to make more efforts ourselves to retain the very favoured pqsition we enjoy in her markets. New Zealand takes more from us per head than any other country, but our percentage of her trade has revealed a tendency to drop—to drop slightly, it is true, but still to drop—while other countries, notably the United States, have managed to advance.