Wirarapa Times-Age FRIDAY, OCTOBER 7, 1938. FACTS THAT NEED FACING.

Wairarapa Times-Age, 7 October 1938, Page 4

Wirarapa Times-Age FRIDAY, OCTOBER 7, 1938. FACTS THAT NEED FACING.

QUESTIONS that touch the roots not only of national policy,Tut of the prosperity and welfare of our community are raised in the joint statement which has been submitted to the Government by the New Zealand Farmers Union and the New Zealand Manufacturers’ Federation In brief the contention put forward by these bodies is that while production costs are at the highest level they have ever reached in this country and show no tendency to fall, but are rather continuing their upward trend, on the other hand oversea prices have been receding steadily during the past year. It is contended that the operation of these factors in combination must lead to a decline in both farming and manufacturing production, and in the national income “at a time when the State is making heavier calls on it by way of taxation than ever before m the history of the Dominion.”

It is affirmed by the Farmers’ Union and Manufacturers’ Federation that: “The drop in manufacturing production is already manifest and it appears certain that the drop in primary production will follow.

This question is not being sprung on the Government in the way of a political surprise attack. Every essential detail involved has been under discussion throughout the period during which the Labour Party has been, in office. Whether any practical conclusion has yet been reached, however, is another matter. Whatever politicians may have to say on the subject, it is certainly desirable that people who are not politicians, but are about to exercise the privilege of making and unmaking them, should form their own ideas on the wisdom or otherwise of skying costs and internal prices in this country, irrespective of the movement of prices in our oversea markets.

Generally speaking, the Government defends its policy of raising money wages and other costs and internal prices on the ground that most people are better off than they were before the rise set in. It is contended by Government spokesmen, for instance, that while the cost of living has increased, wages have increased in a greater ratio and that wage-earners have benefited accordingly. Even if this contention were of unimpeachable validity—it is, in fact, subject to some important detail reservations—it would demonstrate only a marginal benefit. That is to say the benefit of increased money wages where it has been obtained is cancelled out to an appreciable extent by higher livingcosts. The rise in real wages is much less than the rise in money wages and only a marginal benefit is left.

In a trading country depending as much as New Zealand does on the proceeds of sales in oversea markets, a policy under which this marginal benefit would be conferred without an all-round increase in. wages and other producing costs and living costs —an increase which in considerable part benefits no one—obviously would have a great deal to commend it.

Most of us are agreed in this country that real wages ought to be at the highest level that industry can reasonably bear, but in approaching or maintaining that standard the possibility appears of making a definite and an important departure from the policy favoured and pursued by the present Government of allowing rising internal prices and rising’ internal costs to cliase one another in an indefinitely ascending spiral. Individually and as a community, we have much to gain from keeping money costs and prices of all kinds reasonably within bounds. Under that policy there would be every opportunity of adding to the purchasing power of money wages and other income. Under the policy at present in vogue, more and more money is needed even to maintain purchasing power.

At the same time, under the policy of keeping internal costs within bounds and looking for social benefit and advancement largely to a lowering of the prices of goods and services, we should safeguard ourselves, in the extent to which that is possible, against the dangers dealt with by the Farmers’ Union and the Manufacturers’ Federation in their joint statement. Rising internal costs while the prices of exports in oversea markets are falling obviously must check both primary and manufacturing production in the Dominion in greater or less degree. This as plainly implies an approach to conditions in which the welfare and prosperity of all sections of the population of the Dominion would be undermined, irrespective of what Government then happened to be in office.

Much as the facts of the position hftve been obscured and distorted by political talk, the question here raised definitely is not'one of opposed sectional interests. The conditions which would ensure unchecked production in our primary and manufacturing industries are also those in which the prosperity of all sections of the community would best be built up and safeguarded.

THE COUNTRY QUOTA.

A STRAIGHTFORWARD statement of the intentions of his Government regarding the country quota may in all justice be demanded of the Prime Minister. The arrangement under which an addition of 28 per cent is made, for electoral purposes, to the rural population (i.e., population other than that contained in a city or borough of over 2,000 inhabitants, or in any area within five miles of the chief post offices in the four metropolitan centres) is of long standing, was established for reasons that were and are°of great importance and certainly should not be tampered with in any hole and corner fashion. Telegrams on the subject which have passed between the Prime Minister and the Farmers’ Union were published in our news columns yesterday. Those who read these telegrams will have noted that Mr Savage refused to commit himself with reference to the country quota and evaded a direct question whether his Government would pledge itself not to alter the country quota, during the term of ithe Parliament about to be elected, in the event of the Labour Party being again returned to power. It must be hoped that as a matter of fair play and open dealing the Prime Minister will disclose the intentions of his Government in this matter. If he declines to do so, the only conclusion possible will be that the Labour Party intends, if it is again returned to office, to alter the country quota, but thinks it inexpedient, on the eve of an election, to make its intention known.