Wairarapa Times-Age WEDNESDAY, OCTOBER 19, 1938. BUILDING UP PROSPERITY.

Wairarapa Times-Age, 19 October 1938, Page 4

Wairarapa Times-Age WEDNESDAY, OCTOBER 19, 1938. BUILDING UP PROSPERITY.

'J’ALKING over the radio telephone with an Australian newspaper representative, the Prime Minister (Mr Savage) said, to quote his own report of the conversation, “that our job in New Zealand was to develop a system whereby people would be able to buy to the same value as they created things and services, and that we were not out to destroy.” If the Labour Government is prepared to carry the policy thus broadly enunciated into working effect, it should be able to enlist the co-operation, not only of its supporters but of many who do not share, or do not fully endorse, its political faith. There undoubtedly are possibilities of approaching along these lines results which would be of great value to the Dominion and its people.

Enabling people to buy to the same value as they create goods and services implies, amongst other things, that a just economic relationship should be established between one section of the community and another. It does not necessarily imply that people engaged in one industry must be as well paid as those engaged in some other industry, for the value “of things and services created” may be determined, as the value .of much New Zealand production in fact is determined, by factors and processes not subject to internal control. The Prime Minister’s statement of policy may fairly be taken to mean, however, that the aim of his Government, in the extent to which it is able to exercise control, will be to establish and maintain an equitable economic relationship between the different sections of the community.

A practical application of this policy would mean that in the extent to which the wages and other rewards of producers of all kinds are regulated internally, any adjustment affecting-one section would be made with due regard to the effect on the relative position of all other sections. The aim, that is to say, should be to maintain as far as possible an equitable and constant relationship betweenJ;he wages and profits earned in different branches of industry. It is not for a moment .to be suggested that an ideal and perfect adjustment on these lines is feasible, but it is possible to do something —considerably more, probably than has been done in the past —to prevent particular industrial groups from gaining an unfair advantage over the rest.

An examination of our national, industrial economy with a view to determining the extent, to which primary, secondary and other industries may be brought into an. equitable economic relationship is well worth while, not only as a matter of justice and stability, but because it would amount also to an exploration bf the conditions in which the expansion and more varied development of industry this country greatly needs might best and most hopefully be promoted.

It is a truism that a vigorous and enterprising expansion of industry, making the Dominion progressively more self-sufficient than it is at present, and enabling it progressively to increase its population, is the most obvious condition of continuing national welfare. Enterprise capably directed undoubtedly is capable of enabling New Ze'aland to add rapidly to its available resources and to carry additional, population.

Without going into details, it is fairly obvious that the expansion of industry in New Zealand is not at present by any means as spontaneous as it reasonably might be. A readiness on the part of the Government to examine the whole position on its merits and to discuss with those engaged in industry the difficulties by which they are faced might open the way to a much more promising state of affairs.

It is not easy to perceive any fundamental reason why New Zealand should not be making much more rapid progress than it is in industrial expansion. Some more or less current and accepted economic ideas on the subject are, when examined, by no means convincing. Recently, for instance, an Australian banking publication observed that:—

Generally speaking, it is wiser to strive to keep open channels of trade giving access to products more cheaply than they can be produced at home.

A truer standard for New Zealand perhaps might be defined by saying that any manufacturing or other industry is worth establishing and maintaining if its products can be exchanged on fair terms for the primary products of the Dominion. We cannot afford to neglect the maintenance of a reasonable balance in. our trading relations, particularly with Britain. On the other hand the fact that goods of a given kind might be imported at a lower price than that of alternative goods produced within the Dominion is not necessarily conclusive. The whole of the circumstances in which we trade, including the relative terms on which we buy and sell, and the conditions of employment, or unemployment, within the Dominion, must be taken into account in order to arrive at a true estimate of the value of a local industry and the justification for maintaining it. '

If the Prime Minister wishes to give full effect to the sentiments lie has expressed in regard to the development and regulation of economic relationships, he cannot do better.than open up a comprehensive survey of the conditions in which industries might be expanded in this country and of the obstacles meantime raised to that expansion.