The Sun 42 Wyndham Street, Auckland, N.Z. THURSDAY, JULY 14, 1927. A PROMISE OF BETTER TIMES

Sun (Auckland), Volume 1, Issue 96, 14 July 1927, Page 10

The Sun 42 Wyndham Street, Auckland, N.Z. THURSDAY, JULY 14, 1927. A PROMISE OF BETTER TIMES

’I’JIIt central point in the news of the day is the promise of 1 better times for this country. in the considered opinion of Dr. H. Belsliaw, professor of economics at Auckland University < ollege, “some improvement in the general business position of New Zealand should be expected in the near future.” If this reading of economic signs be confirmed soon by results, even the extravagant ineptitude of the worst Parliament the Dominion has suffered in many years, will be overlooked, though neither forgotten nor excused. Everything, except politics, tends to promote anticipation of improved conditions. State departmental returns of overseas Irade for the past six months sliow r that the sixteen thousand proprietors of business and commercial concerns in New Zealand have not been so serious a drag as formerly on the seventy tlioiisand owners of primary industries. Importers have restrained their activities during the period and thus have done a great deal, though not quite enough, toward the correction of an unfavourable balance of payments as between imports and exports. It may be said that the position is now reasonably satisfactory, with appreciable indications of a general effort to place stability before speculative trade. It lias to be noted, however, that the way to better times is by no means an easy one with free travel along the worst parts of the road. Many difficulties’ have still to be overcome before the community can wlioop with the delight that springs from buoyant prosperity. These difficulties are to be found in many different forms, and perhaps the most obdurate of them all is the national dislike of the old, tiresome, but practical, virtues of economy, thrift and harder work for the same money that lias been paid so long for measured service and labour. Production is far below the practicable level of achievement in a virile country with relatively generous resources. In the opinion of Professor Belshaw the policy of the banks in raising the bank rate as a check upon over-importation, was brought into practice too late in the day to be of much good. Indeed, it is now a factor retarding recovery. This journal lias been among the few commentators who have dared to say that there was no justification for an increase in the bank rate at all. A similar view lias been taken by an Australian economist, who says it is difficult to understand the increase in the deposit and advance rates. “It is true,” lie adds, “that speculative tradingshould be curtailed as far as possible, but there are ways other than raising the bank rate. It can scarcely be deemed in the best interests of recovery that a drag such as high-priced bank accommodation should be placed on it at the outset. ... Finally, the discrepancy in the London and New Zealand rates is sufficiently great to play into the hands of financial speculators, a possibility which should be minimised at all costs.” Quite so, but will the banks ever take the lead in promoting better times? The greatest need to-day, however, is a substantial reduction in the scale of taxation. If the Reform Government be able to decrease taxation this year, many of its sins and most of its slackness will be forgiven.