ECONOMIC OUTLOOK

Wairarapa Times-Age, 27 July 1939, Page 7

ECONOMIC OUTLOOK

OPPOSITION MEMBER’S CRITICISM NEED OF FACING REALITIES. j I SOME ESSENTIAL CHANGES. I I (By Telegraph—Press Association.) | WELLINGTON. This Day-

Three essential things must precede an improvement in the financial situation of New Zealand, said Mr Holland (Opposition. Christchurch North), when speaking during the Address-in Reply debate in the House of Representatives last .night. They were that the Government would have to face the realities of the situation, determine I to do the proper thing and not the I popular thing, and completely change its mental attitude and legislative action toward capital. "We are face to face with a major financial crisis." said Mr Holland. "The Reserve Bank report shows it. and London financial comment leaves no doubt about it, and as debtors we should take cognisance of the opinion of our creditors. The position is that we have spent more than our record income, we have used up our reserves and resources, and this Government, which was never again going to borrow. is now trying to borrow to replenish the exhausted overseas funds." The unemployment funds had’ been used up, Mr Holland continued, Reserve Bank resources of approximately £2O 000.000 had been used, there was a prospective deficit of up to £2.000.000 to be met in the dairy account, the was faced with a huge expenditure for Social Security and the relief of unemployment, and production showed a heavy decline. Local borrowing had been exhausted, and the Post Office Savings Bank balances were being decreased by £500.000 a month.

TOO MUCH SPENDING. "We are living in a fool's paradise," Mr Holland declared. "The people have followed the example.of the Government and have been spending all their savings. These expensive habits are going to take some correcting, and the tragedy of it is that they' have been acquired in a time of plenty." One of the first things that the Government should do, he said, was to give up abusing capital and scoffing at it. That applied specially to the Ministry. If a lead was given by' the Ministers in this direction, it would do much to restore the reputation of the country. The biggest enemies of the. countrytoday were not the capitalists, as was so often claimed by the Government, but those who jibed at capital. They' had been the worst enemies of the Minister of Finance in his mission tc England,, and were mainly' responsible for the signal failure of' that mission. Mr Holland said that he hoped the Government would have the strength to stand up to the Left Wing of the party, which would loathe and detest every line of the agreement reached by Mr Nash. Import restrictions, said, should be abandoned, and the regulation of imports left to the trading banks, which were the normal channel for such regulation. The policy' of the Government had undermined the entire social and economic structure.

The policy of the Government, said Mr Holland, was undermining the standard of living of the people, and unless the policy were checked would result in a lower standard of living. It was necessary to understand that a standard of living was not merely a standard of eating, but was made up of every commodity the country used. It was based on two things, the internal production of goods and the goods brought in in exchange for internal production. * The Government’s insulation policy, he said, had been tried out and had failed miserably, because the Government was trying to base a high standard of living on a receding income. The prosperity of the country depended on two main industries, and production from these had decreased.