NO WAGE REDUCTION

Wairarapa Times-Age, 17 May 1939, Page 5

NO WAGE REDUCTION

STATEMENT BY PREMIER HOPES OF MAINTAINING LIVING STANDARD. PROTECTION OF DOMINION '■ INDUSTRIES. (By Telegraph—Press Association.; WELLINGTON, This Day. The refusal of the Government to reduce wages, make staff reductions in public service, and stop all major public works was emphasised yesterday by the Prime Minister, Mr Savage, when a report that these economy measures had been recommended to the Government from responsible quarters was brought to his notice. He said the Government wanted to build New Zealand by maintaining for the people that standard of living which was brought to them when the Labour Government assumed office. “Recommendations have been made from many different sources that the Government should rigidly curtail expenditure,” said Mr Savage. “I took it that these recommendations meant that the Government should reduce wages, retrench public service staffs, and stop all major public works. I can say now that the Government has not the faintest idea of putting any of these suggestions into operation. If we fail in the policy we have been carrying out, we will have to make room for someone else. Recommendations of that sort point the way to the destruction of the foundation of industry, and that is not the policy of this Government.” THE PEOPLE'S CHOICE. Mr Savage said that the people had to make up their minds whether they would support the present Government, with its forward policy or go back to the old order of reduced wages. “Under previous Governments,” continued the Prime Minister, “it was the custom to balance overseas trade by borrowing and by reducing wages. At certain times, and in certain circumstances, overseas borrowing may be unavoidable, but for many years successive Governments’in New Zealand have reduced taxation in times of prosperity and have borrowed lavishly abroad. That sort of thing is not going to occur again.” The Prime Minister said that the Government had to make a choice, on behalf of the people of New Zealand, between making a reduction in wages all round, with substantial cuts in the public service, and operating a policy of selecting its imports to bring about a needed readjustment of its overseas trade balance.

On its assumption of office in 1935 the Government commenced the preparation of its plans to reverse the policy of low wages and a low standard of living, which had been followed by its predecessors. It was obvious that trade could not be expanded on the basis adopted by the old Government. The Labour Government’s policy was designed to give the people an immediate increase in their purchasing power. This had been brought about by increasing wages. The first result of increased wages had been a substantial increase in importations. IMPORT SELECTION. “We knew that ultimately we would be faced with difficulty as a result of this policy,” continued Mr Savage, “but we went as far as we could with it. Il is now necessary for the Government deliberately to plan the selection of the country’s imports. We have chosen for ourselves a method of importation that will assist us to adjust the trade balance of New Zealand, and at the same time develop in this country those industries that are necessary to its progress. “The safe course and the only course that will maintain the standard of living in this country is to develop the' Dominion’s secondary industries. The people of New Zealand demand a reasonable standard of comfort, and there is no reason why they should not achieve that standard by their own efforts. No one else can do this for them. Reducing wages will not do it, nor will curtailment of necessary public works. Borrowing will not do it, either. It can only be done by the efforts of the people of New Zealand themselves. And they must keep on building their own industries. "Today the Government is facing two big issues. One is to meet its obligations overseas, and the other is to maintain the strength of New Zealand’s secondary industries. Realising this the Government will turn a deaf ear to those who are advocating wage reductions.” Mr Savage said that New Zealand had to meet tremendous obligations in the matter of interest payments on national and local body debts, inherited as a result of the policies pursued by previous Governments, but the first consideration would be for the standard of living of the people. A reasonable standard of living was all that the people required, and as far as he could see there was nothing else worth working for. “The Government,” said the Prime Minister, “is aiming to protect New Zealand’s industries and to obtain a favourable balance in London by regulation of our imports and deliberately selecting only those goods that are essential. The only borrowing that I favour would be borrowing to obtain supplies of raw material for use in New Zealand factories.” I won t apologise to anyone for that. lam bound to say here that some people have funny ideas about finance, and keep telling us to use the country’s credit. These people seem to forget that they are living in New Zealand and not in London, and that it is in London where we need the credits.” Mr Savage said that curtailment ot public works employees would not be considered. The Government intended to shift men from public works to secondary industries when opportunities were available, the object being to bring about better balanced production The expansion of the Dominion’s industries and the payment of economic wages were, the two important factors in the progress of New Zealand.