N.Z. DIFFICULTIES

Hokitika Guardian, 14 February 1933, Page 6

N.Z. DIFFICULTIES

POSITION COULD EE MANAGED

MR. J: McCOOMB’S SOLUTION

CHRISTCHURCH February 13

Declaring that New Zealand’s difficulties could be managed if tackled properly and asserting that the Prime Minister was wrong in saying that New Zealand was treading the road Australia. had trod in raising the exchange rate, Mr J. MeCoomb’s, M.P., speaking fat Lyttelton on Saturday night, strongly assailed the artificiality of New Zealand’s exchange rate and compared the position of the Dominion with that of Australia. “The Australian Government did not voluntarily debase the Australian pound,” he said. “The Australian Government made titanic efforts to prevent a rise in the exchange rate, and the Government’s efforts were successful to' a considerable degree, REDUCING IMPORTS. “In 1030 Australia was in exceedingly grave financial difficulties—and still is. In 1929-30 her imports exceeded her exports' by a stupendous sum, and she was unable to meet her commitments and pay her interest overseas.' " Exchange threatened to go to 15 per cent or 50 per cent. To prevent so disastrous a . rise in the exchange rate the Government forced the hanks to export gold and placed restrictions on capital expenditure within the country. “In April of 1930 the Government placed a total prohibition on imports of sixty-seven important items in the Customs schedule, representing goods which could be manufactured or grown in the Commonwealth. On a shorter list importation was rationed in order to reduce .importation by 50 per cent.

“Then there was a long list -of items on which an already high tariff was increased by 50 per cent, including agricultural products and groceries, textiles, felts and furs and manufactures, hides, leather, boots, harness, etc. The duties on boots and shoes as on many other items, were raised from 45 per cent and 60 per cent to 67.} per cent and 90 per cent, which was nearly equivalent to total prohibition of import. The duty on apparel went to 90 per cent and 112 per cent.

It was these measures designed to prevent exchange from rising rather than the rise in the -rate of exchange wlijeli gave an impetus to -some of the local Industries. Some casual observers have failed to make this distinction. Unfortunately, the New Zealand Government has entirely opposite policies in views and next session the protective duties may be substantially reduced. But many of the secondary industries in Australia, with all this added protection are languishing. , They have a larger share of the local market, but it is a sadly diminished market because, -of the Government’s deflation policy.

AUSTRALIA’S UNEMPLOYED. “in 1929 the unemployed were 9 per cent of the totnl working population of Australia. The latest abstract of statistics give- the number as 29.6 per cent, which is a colossal army. Bet ween 1939 and 1932 the number of manufacturing establishments decreased by 949, the number of employees decreased by 80,000, and wages deceased by £22.202,174. The value of material operated on deereaseu by £58,840,041, while the valuo of output decreased from £390,912,373 to £290,798,564. “Australia is inj greater difficulties than New Zealand, and our difficulties were manageable had they been tackled in the right way. The floating debt of Australia is over £90,000,000. Unlike Australia’s our exchange rate of 25 per cent' is entirely artificial. Even the 10 per cent was unwarranted in view of the London balances which are accumulating.