POLITICAL

Hokitika Guardian, 15 December 1932, Page 8

POLITICAL

PROBLEMS FOR DECISION. THE budgetary position. WELLINGTON, December 12. Frequent meetings of Cabinet will be held between now and th© Christmas houdays, by waicli tune the Government expects to be in a position to go ahead with framing policy measure* early in the v.ew tear. Two meetings were held to-day, one in the morning and the other in the evening, the latter lasting until a late hour. Th a _i.eiii.eg s meeting ma.nly consisted in

a general' discussion ol’ economic prob ■em« which will be the subject of new legislation when Parliament reassembles on January 26th. Ministers have not had a real opportunity' of conferring since tho House adjourned on Friday evening owing to the absence of the Rt. Hon. G. W. Forbes and the Hon. E A. Ransom -over the week-end but a

meeting was called imm: diate'y on their jetur.n to-day. It is Cabinet’ntenticn to work right up to Christ-

mas, when Ministers will spend a few days at their homes, returning to ’Wellington early in the New Year, so ar to be ready when the House meets with Wislation t 0 meet’'the emergency. Although there was a proviso in All forces’ 'adjournment motion on Friday enabling him to recall members earlier than January 26th if necessary, it inot thought that this will, be done, for the Government considers it will need a full seven weeks’ respite from Parliamentary’work’if it is to complete its programme -and not have to present it

piecemeal. iVlinietei’s generally appear to regard the adjournment of Parliament as the end of a definite phase in a succession of-problems which ha s confronted tin Cra ition since its formation, nearly 15 months ago. ,It is recalled 'that s'-orfciv heft re the present -sendon opened Mr Forbes expressed the opinion that there would be no need for more emergency, legislation, and that the passing of the Estimates, legislation tc give effect to the Ottawa resolutions, and the Budget would be the principal business to be taken.-Since that time, however, events have moved rapidly in th.© world of economics, and th© continued slipping of price levels has altered the whole outlook. The .present

situation wa-s not counted upon, especially in vietv of"the fact that there was every indication that prices overseas would rise and so give much .needed

r-eldif to exporters. The pbsidon today, therefore,, is that tlief Government has been forced to v ecast many preconceived plans' for the current financial year, an well as fc’r 1933-34, which it is feared will present the major problem. BUDGETARY POSITION. iM,r dForbes remarked this evening that the adjournment would be availed of by Cabinet to deal not only with the present, crisis, but also with the Budgetary position for next year. Ill’s frankly acknowledged in Cabinet circl-e s that ■ tne* outlook is serious, and

that no half-meaeiues will be adequate to meet the position in view of tn? latest figures showing a further cOntraction of the national income, which will make it more difficult for private person,s as well as the 'State to meat their obligations. On the other hand it 1 i« not admitted that the future is without hope, and Mr Forbes himself said this evening that there was every prospect that now the bottom of the slump had apparently been reached remedial measures would begin to lead the way up the’'incline, while some benefit might be expected from what steps had already be e n taken. Notwithstanding anything the Government may do, it is emphasised in Cabinet circles that this country is powerless beneath the weight of overseas economic circumstances, arid a heal move toward recovery, it is urged, must come, from abroad. One influential member of Cabinet went so far as to say to-day that whatever the Government did would be largely in the nature of temporary expediency, for New Zealand’s whole economic life was dependent on overseas price movements. For this reason it was pointed out in Cabinet c.’rcles it woufd be wholly unreasonable to expect the Government to devise a plan which would bring a return of prosperity in a day. Anything done must depend fo r it s ‘ ultimate success on overseas events. The, sam e Minister said the country says in effect to the Government, “Physician, cure me immedia'ely,” but the cure is not as easy a; tin t, and it- in surely unreasonable to expect that it should be if it is to be lasting.

TALK OF FURTHER ’’CUT.” No matter what coarse it decides to take within the next few weeks, Cabinet, i. s fully aware that it, will, have itn critics. Although even the • Government itself has not decided upon a definite plan, it is stated reliably in the Parliamentary lobbies that there in every likelihood of the legislation of last year being advanced a stage further. It is almost cert.rfn that, step:', will he taken to bring about another reduction in interest rates, and there may also ho a move to inipa«o another wages cut throughout the Public Service. From what can be gathered at the moment, Cabinet may decide on a policy of further deflation, accompanCd by a measure of inflation, whether by meaivs of increasing primary exporters’ returns, by a bounty, or some other way.