THE OTAGO DAILY TIMES THURSDAY, NOVEMBER 13, 1947 A FATEFUL DECISION

Otago Daily Times, Issue 26617, 13 November 1947, Page 6

THE OTAGO DAILY TIMES THURSDAY, NOVEMBER 13, 1947 A FATEFUL DECISION

With his announcement that legislative or political action in any State would not affect the Federal Government’s decision to proceed with the Bank Nationalisation Bill, Mr Chifley has definitely turned his back on democratic parliamentary government and has staked the fate of the Parliamentary Labour movement in Australia on his ability to have the Bill made law and to defy any challenge which may be made on constitutional grounds. Mr Chifley has not always been noted for governing with a strong hand, but in this matter he has acted throughout with a blind disregard for any consideration other than the securing of his own ends. The first indication that bank nationalisation was contemplated was given in his blunt announcement on August 16 that legislation would be introduced for this purpose. This statement was made a few days after the Australian High Court had ruled against the Federal Government’s directive that State Governments and local bodies must trade with the Commonwealth Bank. The fact that for nearly two months thereafter Mr Chifley deigned to make no explanation created a most unfavourable impression. During this interval members of the Government attempted to explain the policy with embarrassing results, for it was clear that they were either not fully informed of, or in accord with, their leader’s intentions. In the face of a storm of criticism Mr Chifley introduced his Bill into the Federal Parliament in midOctober. Commenting on the proceedings, the Economist said: “His speech, to judge from the cabled summaries, appeared to consist in equal parts of the Socialist doctrine that there is magic in public ownership and of the money cranks’ argument that there is something sinister about the Money Power — that is, of two brands of nonsense.” Mr Chifley contended that by returning the Government at the 1946 elections the Australian people had not only approved the Bank Act of 1945 but also the principle of full control of banking in the national interest. Such an issue was not raised during the election, and Mr Chifley during the campaign actually claimed that the Bank Act gave the Commonwealth full control in financial matters. The measure.of control is conceded to stop short only at the point at which a bank could be directed to lend or not to lend to an individual customer, and it gives “ complete and flexible control ” of the volume of credit. The only explanation for the Bill would seem to be that it is th,e product of that obsession with doctrine to which all Socialist Governments are apparently susceptible. That is bad enough in itself, but the crux of the objection is that the Bill involves a change in the economic structure of Australia on which the people have had no opportunity to express an opinion. Requests that a referendum should be held have been obstinately refused. The verdict of the Victorian elections was against bank nationalisation. Tasmania is considering forcing an election to make a similar test of feeling and the governments of Western and South Australia, which are already antiLabour, have announced that they will fight the legislation in the High Court. In such circumstances it is almost incredible that Mr Chifley should persist in his headstrong course. By doing so he is giving to the world a demonstration of the manner in which Socialist-Labour is impelled in the course of its development towards the evils of totalitarianism. THE LIME SUBSIDY The report of the Agricultural and Pastoral Committee of the House of Representatives on the effect of the removal of the lime subsidy confirmed the opinion expressed in these columns at the time —that the Government had made an egregious blunder and that the whole economy of New Zealand would be upset if this prop to the successful farming of second class lands was removed. The debate in the House on the committee’s report has made the point abundantly clear that members now realise that the subsidy will have to be restored in some form, and it is probable that the committee’s recommendation that the subsidies should be met from the primary industry accounts will be adopted. The Government has evidently realised that to pursue its intention of removing the subsidy would hinder the development of the marginal lands which are an essential factor in the country-wide system of grassland management, and is hastening to remedy its error. But there is no reason why the mistake should ever have been committed. All the information and most of the recommendations contained in the Agricultural and Pastoral Committee’s report were presented to the Government in 1940 in the report of the Agricultural Lime Commission, and the fact that the Government chose to disregard the recommendations of that commission at a time when encouragement to extra production should have been a prime consideration must be accepted as another instance of the present administration’s utter ignorance of, or contempt for, the needs of the real producers of the nation’s wealth. It has been reported that the leaders of primary industry in New Zealand have agreed to the proposal that the subsidies should be subscribed from the dairy and meat stabilisation accounts. Many farmers in New Zealand will question the wisdom of this ready acquiescence. These funds are held for the benefit of the respective industries, and at present they are in a healthy state, but the unpleasant prospect of a retrogression in prices at some time in the future when every primary producing country is attempting to export surpluses cannot be dismissed; nor can the possibility be ignored simply because of its unpleasantness. Should the day ever return when New Zealand butter is again selling in London at seventy shillings a hundredweight, and wool and meat at similarly depressed prices, the

reserves in the stabilisation accounts will quickly be swallowed up, and since in times of low prices extra production is generally attempted in order to augment the aggregate income, the stabilisation accounts would be hard pressed to meet the demands that would be made for the materials necessary for intensive cultivation. The Lime Commission, in its report, recommended that the Consolidated Fund should bear the cost of the lime subsidy, and in view of the dividend returned to the country -as a whole from the investment of adequate liming on farm lands it would appear that the public funds could well afford to bear the cost of the subsidy.