WELLINGTON NEWS

Hokitika Guardian, 3 January 1930, Page 2

WELLINGTON NEWS

. NEW YEAR PROSPECTS

(Special Correspondent)

WELLINGTON, January 1

The prospects for 1930 are not as bright and as rosy as one could wish on the contrary its promises to be a very trying one, demanding the best that is in us to overcome the difficulties that will confront us. The prospects are blurred by the drop on the values of our primary products. There is nothing that is produced in the Dominion for export that is affected by falling prices, and, this is in comparison with those ruling in the year just ended. There was some prospect that butter and cheese would maintain their values, and so provide some set off to the downward trend in wool, meat and other of our products, but during the past three or four weeks butter and cheese have followed the rest in the downward slant and the forecasts by experts indicate a further recession in values. To what low level these two important export products will fall no one can say with any certainty, but if values do not go much below the value now current the increased production may bring the total monetary receipts up to the Jevel of last season which may he something to be thankful for. Allowing for increased production — and there have been increases in wool and in meat the total income from our exports will be substantially lower than in the past year, and it is ' the contraction in income that will cause the trouble. Less income involves less expenditure, and the effects of that will be felt in trade, commerce and industry. Furthermore there must follow a readjustment of values of securities both real estate and those of Stock Exchange character. Such securities hotli real estate and those of estate market in all our cities and in mayy of the inland towns is very much depressed, and values are tending downwards. Many ol the owners cl property are finding it increasingly difficult to sell at prices that were ruling, and of course such sellers arc bolding on in tiie hope that conditions will improve. The share market has witnessed a drop in value, and it is generally recognised that there is now very little money available for investment in such securities.

While there is no doubt about the decline in the value of securities and commodities there is a stubborn and so far successful resistance to any readjustment in the cost ol services. Wages and salaries remain unchanged at the highest post-war level, whilst commodities are approaching the prewar level. How to harmonise these two antagonistic elements is the problem of the hour, and as yet no solution is in sight. Economists advance various 'theories, but all are insistant that the cost of production must be reduced. This reduction cannot be achieved unless the cost of services are reduced, and that is the great obstacle to readjustment. Any attempt at readjustment would cause trouble, Some think that as a preliminary the Arbitration Court should be abolished, but that is admitted to be a drastic step, Some thinkers believe that if the pernicious policy of preference to unionists is abolished, and every man free to work without interference fro union bosses more and better'work would be done. It is claimed that all unions with a few exceptions are controlled by a militant minority minority who rule with an iron rod. While it may be advisable in the interests of the country to abolish preference to unionists that can only be done by legislaton, and it would be difficult to find a political party courageous enough to take the initiative.

Besides, the obstacle of high wages, there is the more formidable obstacles of high taxation and high rates. We have borrowed money freely and spent extravagently, and the interest on the borrowed money must be paid in full and punctually if we are to maintain our credit. The cost of Government administration has increased enormous ly and there is no chance of retrenchment, at least while the political parties vie with one another in their presumed anxiety to restore the salary cuts of the civil servants. The high rates and high taxes riTust be paid whatever the shrinkage in the incomes of the people. There is another factor that will add to the troubles of the current year and that is the increase in 'the imports. The most of the increase is due to the import df luxuries, principally motor vehicles. The hanks are doing their utmost to check imports, and this may prove effective, j.lie year will be a difficult one, but through co-oper-ation we can overcome all difficulties.