WELLINGTON NEWS

Hokitika Guardian, 2 June 1931, Page 8

WELLINGTON NEWS

AIR OF UNCERTAINTY. (Special Correspondent.) WELLINGTON, May 29. The position in the business world of New Zealand at the present moment is one of uncertainty, and there are two , definite causes. The first is the decisJ ion of the Arbitration Court on the i wages question which is expected to he ■ delivered almost immediately. Some people contend that the employers preI sented a case for reduction with arguj ments that were convincing at least to the lay mind. The pith of the arguj ment for the workers was that if wages j were increased the purchasing power ol ' the community would be increased and the depression would thus pass away, j This reason did not appeal even to the proverbial man in the street for he wanted to know who was to find the ; money to pay the higher wages, and where it is coming from. Of course there are a number of people who believe that there is plenty ol money in the country but people have buttoned up their pockets and refuse to spend their money. The idea that there is plenty of money in the country is a fiction. How can there be plenty of money when the national income lias declined by £20,0(X)000 or more. People cannot spend the money that they do not possess. Howover the decision of the Arbitration Court is anxiously awaited and if the orders an 'all-romw.l reduction of 10 per cent it will cause some purse strings to he loosened and more money spent in different directions, but the ’ expenditure in the aggregate will noi ! amount to a great deal. Awaiting the decision of the Afb tration. Court is at the moment causing a feeling of uncertainly. Another dis- . turbing factor is the project taxation of the Government. That it will be ' heavy and widely distributed in generj ally believed, but no one knows whetli--1 er the burden will be made heavier in i direct taxation or whether indirect tax--1 ation will carry tin* heavier load. The forecasters are already at work J and tea, sugar, and beer are said to la certainties to be loaded with taxes. Meer and tobacco are generally regarded as being proper items for heavy tax- ] ation because they are classed as luxuries. But even luxuries can be taxed too heavily and result in diminishing returns. A sales tax is also forecasted which will further restrict, spending. When one recalls wli.at is impending it cannot lie wondered that people are acting cautiously, and not spending more than they can help. There is a slow circulation of. money which is depressing retail trade. 'Hie postion is a peculiar one. . Wo arc not spending money as usual because we are uncertain as to the immediate future and we wish to reserve) our resources to meet a possible adverse situation. When the tinoertitiuties are removed and we know the measure of taxation |we have to face and the reduction in i wages that we will have to tolerate a j good many people will be forced to I further curtail expenditure and the retail trades in which there is exfessivo competition will suffer seriously, and

there is bound to be an increase in insolvency. But this latter is not a matter for regret foivit is necessary that weak units in. every business, which are a menace to, business should be weeded out. There is undoubtedly an excessive number of distributors and the elimination of a percentage will do no harm. Next year or two we must devote to readjustments and return to a strict obedience of the laws of economics. So far as we are concerned it is Britain who pays the piper and is calling for the tune, to which we have to submit. 'The present depression will run its course like that of the depression of 1890-94 at all events the happenings are somewhat similar.

We will presently see Bank rates down to 2 per cent in London and kept there for some time. Commodity prices may not fall lower, but they are not likely to rise much higher, and we must soon forget the halycon days when New Zealand salted butter was lSos in London. The lesson we have to learn is to recast our ideas of values, we must think in shillings where previously we figured in pounds. This will be very bard but a very necessary task and we will not shirk our duties but will face our difficulties as the men and women did 37 years ago when the hardships were greater than they are now. At the moment there is a great deal of uneertainity as to what will happen in the winter months, but uneertainity will soon yield to realities, and the people oan be trusted to look facs in the face, unlss of course they are grossly misled by designing Labour mandarins.