THE GOVERNMENT'S CONTROL POLICY

Wairarapa Times-Age, 8 December 1938, Page 7

THE GOVERNMENT'S CONTROL POLICY

Prime Minister Sees No Reason for Anxiety SCIENTIFIC SELECTION OF IMPORTS INCREASED PRODUCTION ESSENTIAL (By Telegraph.—Press Association.) WELLINGTON. This Day. The guaranteed price was a first step in cushioning the Dominion against the effect of depression overseas, the Prime Minister (the Rt Hon M. J. Savage) stated in a broadcast address last night. The Government was now taking a second step in its policy to control the use of oversea funds.

There was no reason whatever, said Mr Savage, for any anxiety about the present and future economic and financial condition of New Zealand. There was no alternative to the present plan of regulation except to reduce the standard of living, and the Government was totally opposed to that. Though the Government could plan and legislate with the very best of intentions for the welfare of the people, without their co-operation little progress could be made. There was depression and uncertainty of the most ominous kind overseas, and without control of overseas trade the Dominion could not protect itself.

Mr Savage said that the scientific selection of imports was the most effective way of building up the country’s own industries. Increased production was essential. What the Government was introducing was a regulative procedure. The Government’s scheme was a positive plan to maintain a high standard of living. New Zealand’s obligations to Great Britain would never be lost sight of by the Government.

First and foremost, Mr Savage said, it was the aim of the Government to build and maintain the standard of living of all New Zealanders. It was no use trying to lift the standard of living under the old economic system of "go as you please and the devil take the hindmost.” It was necessary to have a clear idea of what should be done. First of all they had to see that the purchasing power of the. people was distributed so that all had a chance to provide for their needs. The Government had gone a long way toward achieving this. In the past three years many economic and social records had been attained. “We have also got to ensure that more and more goods are produced to meet our wants and our needs,” said Mr Savage. “We must increase production. That is essential. The appeal we have made to workers in industry is not made merely for the sake of producing more. All sections will benefit by increasing production, and if people produce more 'they must all gain. The Government will see that everyone gets his or her share.

“The Government wants to give everyone a chance to work who is able to work. We do not want unemployment in New Zealand, and we want everybody who is employed to be working at a productive job, not a job chipping weeds by the roadside, but one which is producing an asset and one which preserves a man’s selfrespect. FARMING AND TRADE. “In the past New Zealand has depended on expanding farm production and expanding markets overseas. This has had the effect of developing our rich farm lands, but it has also meant that we have been more subject perhaps than any other country to alternate booms and depressions with great poverty and unemployment. Falling overseas prices have been allowed to affect New Zealand far too much. “We talk about insulating ourselves against overseas knocks; we have suffered too many of them in the past to want any repetition of their evil effects. But unless ,we have some control over our overseas trade we just cannot protect ourselves. There is at the moment a very good example of this; the price of butter in the London market has fallen heavily in recent weeks, but the income of the dairyfarmers has been kept up by means of the guaranteed price. The dairy farmer suffers no longer from falling overseas prices. The benefit is not likely to be overlooked. This system of guaranteed prices is a first step in cushioning New Zealand against the effect of depression overseas. Let dairyfarmers themselves think of the effects of an unregulated market. FALL IN OVERSEAS PRICES. “Now we are taking a second step. Whenever overseas prices have fallen we have had to go without goods from abroad. And we have not been able to supply them from our own production. The second step obviously is to make these goods ourselves. This can t be done all at once; it will take some time, but industries are essential to our growth find existence. We must see to it that New Zealand manufacturing industries are in a position to supply our needs. “There are many more things which are now imported that we can make here. New Zealanders are just as intelligent and capable as are other people. Given the raw materials they can acquire the skill. Our job then is to build New Zealand industries and build them so that they are efficient, in doing this we must safeguard their growth so that they can be assured of a larger proportion of the New Zealand market and not be undercut by unfair competition. “While we have our first duty to our own people we also have obligations to Great Britain. And these will never be lost sight of by the Government. PREFERENCE TO BRITAIN. “In carrying out our policy of industrial development, we will see to it Great Britain will not suffer. In 1936 my colleague, Mr Nash, made that clear on his trade mission .to the United Kingdom. He offered them more trade with New Zealand, not less, and we have repeatedly assured the British Government that we are prepared to buy from them to the full extent to which they buy from us. That is after our debt services have been met. And there has never been any question concerning the payment of the interest on. our debt service. That is taken for granted. “It is on the trading side that we are adopting a new policy. We want to increase our trade with Great Britain. To the extent that we are able, we want to spend every penny of the sterling proceeds of our exports on

buying British manufactured goods. We are going to buy from those who buy from us—with first preference to the Motherland. On the other hand, there are countries which do not take many of our goods, but we buy a great deal from them, and we buy goods which, in some cases, Britain could well supply. There must be some readjustments with these countries.

“Buying as much as possible from the United Kingdom and making the adjustments necessary with other countries cannot be achieved by Customs tariffs and preference duties alone. We want to see that the Old Country gets our trade to the full. Tariffs will not do that. The only sensible way to do this is to select the goods we want to buy from Britain. It is all a question of scientific selection of imports. IMPORTS & INDUSTRIES. “This same method of import selection is the most effective way of building up our own industries. We are going to give New Zealand manufacturers a definite market if they can turn out the goods. To the extent that they can’t we will import the goods from abroad. It is thus obvious that we must select the imports we need if we are to build up a more balanced economy. “Then there is the question of raw materials and equipment. We must make sure that our industries are provided with all the raw material and machinery they need. Each year we will set aside a certain part of our overseas funds for essential materials so that our workers and factories may be continuously employed. In dealing with applications for import licences for the purchase of goods and materials preference will be given to those which constitute essential requirements, and which cannot be produced in the Dominion.

“I want to say most emphatically that what we are introducing is not a barrier but a regulative procedure. All that we are doing is to introduce an element of planning into our economic life where formerly things were left to chance.”