Wairarapa Times-Age MONDAY, JULY 3, 1939. A TIME FOR LEADERSHIP.

Wairarapa Times-Age, 3 July 1939, Page 4

Wairarapa Times-Age MONDAY, JULY 3, 1939. A TIME FOR LEADERSHIP.

AS a rule a week or two is more or less wasted on. the Addressx in-Reply Debate in the House of Representatives, particularly in the first session of a new Parliament. It must be hoped that, in the session which has just opened the element of party sparring, in the opening debate and others, will be reduced to a minimum. In the present state of national and international affairs it is evidently undesirable that time should be frittered away in that fashion. Apart from the menacing world outlook, the economic position of the Dominion calls lor serious attention.

Our national problems and difficulties raise questions of policy which no doubt must be fought out sooner or later by the political parties. h There is no immediate prospect of an election battle, however, and the immediate call made upon both parties is rather for the most capable service that can be rendered towards lifting the Dominion out of its difficulties.

Even in a slight consideration of tile facts it must now be apparent that the fairly widespread, though by no means universal, prosperity still ruling in the Dominion rests upon a somewhat insecure foundation. In the depletion of sterling reserves, the failure to check a continued rise in working and living costs, and the handicap this upward movement imposes on industry and production generally, it is demonstrated very clearly that the country has been overtaxing its resources and spending a long way ahead of its income.

With matters in this state, practical political effort .should be concentrated on devising the best available ways and means of enabling the country to overcome its difficulties. . The initiative, of course, is with the Government. One of the favourite contentions of Labour Party spokesmen is that purchasing power must be equated to production. The problem " here implied, at the stage we have now reached, is presented in reverse. The problem, that is to say, is to equate production to purchasing power.

A solution of the somewhat complex problem thus presented demands, amongst other things, at least a progressive approach to the establishment of a just economic balance between primary and other industries in the Dominion. At the broadest view, it demands an expanding production of goods and services. Unless these things are accomplished, not only will our unsheltered export indutries be east progressively into deeper difficulties, but members of the community at large will find that the money that comes into their hands will continue to be worth less and less by the only standard that counts —that of effective purchasing power.

It rests primarily with the Government to say what is to be done. The essential conditions of improvement are that production and other costs should be brought under control, and lowered where that is possible, and that every practicable effort should be made to expand internal production. It is within the Dominion that remedies must be applied in the extent to which they are feasible.

This, of course, does not mean that, our problems of financial adjustment in London can he disregarded. Partly, bill by no means wholly, as a result of exaggerated and unfair criticism overseas of the trade and industrial policy of the Dominion, it is clear that the conversion operation now being negotiated—the renewal of some £17,000,000 of debt —and any new borrowing, though it be only for defence, will have to be effected in extremely adverse conditions. The outlook in this respect is, indeed, so unpromising that the Government may be justified in relying for the time being on short-term borrowing.

It is chiefly within its own borders that the Dominion must tackle its problems of economic and financial adjustment if the present menacing drift to leeward is to be arrested. The call thus made upon political leadership and initiative is manifest. If production costs and living cosis are to be brought and kept within bounds—if inflation, which penalises every section of the population, and particularly those who spend the bulk of their income as they get it, is to be checked —the whole field of State taxation and spending .must be revised in such a way as to lighten the burden and handicap imposed on existing productive enterprise and to encourage industrial expansion and extension. OUR RAILWAY HANDICAP. view expressed in recent correspondence in our open columns on the subject of the long-projected Rimutaka railway deviation is that it is a matter of small importance to the Wairarapa, and that the construction of the proposed tunnel would impose a heavy load on" the taxpayers ot the Dominion. These opinions will hardly hear serious examination. Having gone very fully into the position in 1923, the then Engineei’-in-Chief of Public Works (Nir F. \\'. Furkert ) reported that the cost oFconstrncting the tunnel (approximately £1,000,000) would be ( balanced by savings resulting from its construction. There never has been any question of the undertaking imposing a heavy new load on the taxpayers, such as undoubtedly will be imposed by some of the big railway and road works at present in progress. It has to be remembered, also, that the recommendations embodied in the 1923 report were based upon known factors of working cost, passenger, live-stock and- freight loading and so forth. The financial estimates presented took no account whatever either of the monetary value of a more expeditious and convenient service or of the impetus that would be given to development in the Wairarapa and other areas by a great improvement in railway transport service. Though they have not been taken into account, the economic and other benefits to he derived in these ways probably are much more important, at a reasonably long view, than the immediate savings in working cost to be effected by substituting an improved line for the present line. There has been a substantial all-round increase in working and other costs since 1923, but it has yet to be shown that this would affect adversely the. balance-sheet, of the tunnel deviation project. At all events, working costs as well as capital costs have increased, and in some instances a’t least public works costs have been lowered by the modernisation of engineering and working methods and the use ol labour-saving machinery.

Although the present Government decided upwards of a year ago to put the construction of the tunnel in hand, prospects of the undertaking being carried out soon obviously are not improved by the financial and other difficulties in which Ihe Dominion is involved. From the standpoint of economy and that of an aid to progress however, Ihe Rimutaka deviation plainly has stronger claims to consideration than much of the railway construction and road improvement -work at present in hand. A considerable reduction in total expenditure on public works no doubt is very necessary and inevitable, bid ii should not by any means necessarily follow that there must be any further delay in putting in hand the construction of the Rimutaka deviation.