AS OTHERS SEE US

Hokitika Guardian, 1 April 1932, Page 8

AS OTHERS SEE US

A SOCIALISTIC STATE. LOS AJNGELES VIEW. - WELLINGTON, March 29. Bankrupt ' Socialism” is the heading on an article discussing New Zealand affairs, published in a recent issue of the “Los Angeles Times.” Although the writer is guilty of under-statement in some respects and over-statement in others (note the figure given of per capita, debt in Australia), there is enough truth in the picture to make New Zealanders uncomfortably aware of the likeness.

It may chock many to find their country branded .as .socialistic in a wholesale way, but reflection will reveal bow far the Dominion has gone in that direction with State and municipal enterprises. In any case it is often salutary to see ourselves as others see us. The article is as follows :

Political ohanges in both Australia and New Zealand, countries which are competing for the cellar championship of credit among English-speaking peoples, indicate that both have been brought to a realisation that Utopian policies do not pay. New Zealand, particularly, has cherished Socialist aspirations and for forty years has been carrying on an amelioration programme. It has been called the most nearly Socialistic country outside of Russia.

Now it is discovered that the programme has been made possible only by continually increasing the Government debt, that the improvements have never paid out and probably never will and that either taxes must be piled on until the taxpayers revolt, or the debt must be repudiated.

INTEREST ABSORBS HALF Revenue.

The per capita debt of New Zealand is the highest in the world, nearly six times that of the United States, being 842 dollars for each of the 1,450,000 inhabitants of the island empire, as compared with 813 dollars for England, 399 dollars for Australia, 300 dollars for France., 239 dollars for Canada, 188 dollars for Belgium and 147 dollars for the United States. Its gross total is 1,349,555,000 dollars, to which must be added 353,373,000 dollars debt of local governments to make the picture complete. To pay interest on it requires a full half of all the Dovernnulnt’s revenue—la,nfd uo thing has been done to reduce it!

It may be asked where tlic money has gone. Some dollars lias been spent in building Govern-ment-owned railways, so unsuccessfully run that, during the last four years they have fallen more than 10,000,000 dollars short o. paying the interest on the money borrowed to pay for them. A vast hydro-electric power scheme has eaten up 50,000,000 dollars and will require 54,000,000 dollars more to finish it according to the original plans. The plants already working are running consistently behind their expenses.; There is a State Fire Insurance. Department, a State Loan Department and so on, none of which does more than meet expenses and many not even that. The crisis came recently when underwriters in London of the most recent New Zealand loan were left with more than 20,00c,000 dollars of unsold bonds on their hands. When that happened, New Zealand awoke to the fact that- her forty-year borrowing spree was at an end and that bond payments hereafter will have to be met from taxation.

UTOPIA ON THE ROCKS. With all its attempts at industrial expansion, New Zealand remains primarily an agricultural country. Wool, butter, meats and cheese each supplied far greater in volume or value than all manufactured products combined, while hides and tallow together were nearly equal to the products of the factories in 1928. With these exports the country maintained a “favourable” trade balance of approximately 22,000,000 dollars in good years, or enough to keep her credit good, but that export trade has largely disappeared.

At the present time* London exchange, depreciated as* it is, costs nearly 10 per cent, more in New Zealand, or New Zealand exchange is at 10 per cent, discount in London, as the case may be. This is a favourable situation compared only with that of Australia, where the exchange premium has recently been about 20 per cent!

Necessity will dictate a sharp curtailment in the expenditures of New Zealand for humanitarian purposes in the I’uture; railway and electric rates must go up and wages go down, and the charges of Slate industry i» gen-, pral must he increased until they at least pay their own wav. This on t p of increased taxation mda ns that the soft living conditions of New Zealand are definitely at an end and that many years ol hard work will have to p.|.y lor them. Another Utopia has gone on the rocks. This is not an occasion be 't'bilat ion ; it is merely proof that com a,no leas cannot be penimiumllv !■ m d Those will) believe tlm; ( ’'ive: alma i

nvimrsliip of industry helps any "uiiiinunity arc invited to cont.miplale .rs results, in New Zealand.