POLITICAL WEATHER VANE

Rotorua Morning Post, Volume 2, Issue 442, 28 January 1933, Page 4

POLITICAL WEATHER VANE

It is clifficult to muster any very coherent thoughts after wading through the exhaustive and exhausting outlines of the country's finaneial position or lack of position, given in the House yesterday by the leaders of the Coalition party. Two impressions, however, do emerge. i One is the critical and disastrous I eondition into which the counj try's finances have drifted and I the other is the clamant desire | of the two right honourable gentlemen to explain their

change of front on the exchange question. We must confess that we are not so confident as Mr. Forbes now proclaims himself to be that a pegged exchange will prove the "open sesame" to prosperity. It will, on the other hand, provide a definite measure j of assistance to the country's sorely tried primary producers, and it is, at least, infinitely preI ferable to a continuance of the 3 j policy of drift and indecision 1 ; which has so far been evident. It | j can only be described as a palliative but it may prove a palj ! liative which will give the DoI J minion breathing space and time

I to shoulder its burdens anew. | It is, however, interesting and a | j little ironical to find in Mr. Fori bes and Mr. Coates such strenu- | ous champions of the gods which j previously they so vociferously j i decried. "A continuance of a | policy of undirected deflation is j unthinkable," Mr. Coates proclaims. "It will be remembered that a short time ago I emphas- ! ised the opinion that the question of exchange was one that ' should be properly determined j j by the banks (said Mr. Forbes). Since that date and consequent i upon a ciose examination of the | position, the Government came j to the conclusion that the matI ter had become one of serious i national importance and could not be left to outside agencies." Taken in conjunction, this sudden reversal in the attitude of the leaders of the Coalition provides a most dramatic "volte ' face" and it would be interesting to know what has brought it about. Until the present time, | the policy of the Coalition, if it | | can be so described, was one of 1 stereotyped deflation and hands

of pious horror were held up at the mere mention of that unorthodox word "inflation." Wages reductions, curtailment of services, of borrowing and spending, all these were there but against any suggestion of inflation, a face of virtuous indignation was turned. NoW, however, we have the iflteresting spectacle of Mr. Coates advocating inflation and of Mr. Forbes excusing it. The French have a proverb "Qui S'excuse, S'accuse" (who excuses himself, accuses himself) and many will

place this implication upon Mr. Forbes' rather lame explanation of his change of front. "Since that date, and consequent upon a close examination of the position the Government has come to the conclusion that the matter- is one of serious national importance," Mr. Forbes stated. It is encouraging to learn that the Government has at last become convinced of this fact, and as we have previously remarked, it is only regrettable that it has delayed so long "the close examination of the position" which was apparently necessary to convince it that the matter is one of urgency. After considering the figures given by Mr. Coates in his finaneial review, this question of urgency should not remain any longer in doubt. It is, at the best, a lame excuse for the Prime Minister to contend that it required the present critical position to awaken him to a realisation of the necessity for action. The morass into which we have drifted has been apparent for some time past; it is not a matter of any sudden emergency but one to which the Government should have been

fully alive from the beginning. If inflated exchange is justified at present, it was even more justified months ago, when according to the arguments of Messrs Forbes and Coates, it might have done something to avert the present position. Now Mr. Coates asserts that the full eifect of the change cannot be felt for some time and that while the country is admittedly drifting from bad to worse, it is to be expected that its first effect upon the budget will be an adverse one. According to the arguments of both the right honourable gentlemen, the country was in better eondition some months ago to sustain this adverse effect than it is at present. There is no doubt that in this they are correct, and that being so, it is to be regretted that they have taken so long to make up minds to change their minds. i