Wairarapa Times-Age TUESDAY, DECEMBER 12, 1939. STILL MORE PRODUCTION.

Wairarapa Times-Age, 12 December 1939, Page 6

Wairarapa Times-Age TUESDAY, DECEMBER 12, 1939. STILL MORE PRODUCTION.

TN his broadcast on Sunday evening, the third of his sene. 1 of addresses on current New Zealand problems, the 1 rime Minister said that increased production must be the slogan The future. The slogan obviously is a very good one. increased primary production (Mr Savage observed) would assist New Zealand to increase its overseas 1 1 , unds .. w “ 11 . e hp a stantial increase in secondary industries ieli ve 1 sure on those funds. By increasing primary and secondary p duction the country would be working on the same pi oblem from both ends. The Prime Minister said ..also that the incomes of the masses should be sufficient to enable them to have what was produced in the Dominion, as well as what came from abroad. With the whole of these broad contentions it is possible readilv to agree, but it does not by any means follow that, factor’s of production, export and import trade, and purchasing power have been brought into a satisfactory relationship and balance in this country. On the contrary, there is evidence on all sides that they have not. For instance on top oi heav> State borrowing from the Reserve Bank, and the lavish expenditure that borrowing connotes, the.bank note issue has increased by 90 per cent in four years. One does not need to be an economist, however, to know that much of this huge ostensible increase in purchasing power has conferred only fleeting am illusory benefits on the people of the Dominion. The weakness of our economic position—a weakness that sets limits to continuing production as well as to present welfare and prosperity—is that the amount of money in circulation has expanded very much more rapidly than tne production of goods and services. Because goods ol many kinds are becoming scarcer and dearer, much of the purchasing power that is being distributed has only nominal value and with prices and costs rising, impediments are raised to the expansion and even to the maintenance of production. Contending, in his latest broadcast, that this was an age in which the machine had multiplied many times the amount oi goods for sale, but had at the same time displaced the purchasers of goods, Mr Savage added that: — In that they had a strong case for insisting that the incomes of the people keep pace with production. While the machine produced ever-increasing quantities of goods it destroyed the market for those goods unless incomes were increased at something like the same rate. If the machine displaced labour and destroyed the market for the goods it created, he thought a substantial case could be made out, not only for reducing hours of labour but for increasing rates of pay. This would be a delightful state of affairs if it existed, but where is an overflowing output of goods to be found in New Zealand? Ts it not a familiar fact that, dwellings are so scarce and dear in this country that it will probably be many years before the whole of the population can be satisfactorily housed .' Food we certainly produce in abundance, though with a comparatively slight use of machinery. But are clothes and footwear and furniture and other articles of common necessity being turned out in such increasing profusion that only a distribution of purchasing power is needed to ensure everyone being well supplied and happy? On the contrary, as most people know, the production within the Dominion of goods that its inhabitants need and could advantageously use is on the whole rather narrowly restricted. Manufacturers have been complaining bitterly ol late that they are not being allowed to import, the raw materials they must have in order to satisfy fully the demand for manufactured articles. This may mean, amongst, other things, that the development of manufacturing industry in this country has not been concentrated initially to the extent it should have been on the processing and fabrication of materials of local origin. In any case, our trouble is a shortage of goods and not an overflowing supply. In itself, increased production is an excellent slogan, but the Prime Minister hopelessly exaggerates the part that a mere increase in money incomes is capable of playing in carrying that slogan into effect, it is the reality of increased production and not the shadow of an ostensible increase in purchasing power that is needed to bring about the economic and social betterment. Mr Savage has in mind. One of his colleagues (Mr Webb) is reported Io have said the other day:— We are not bothered about finding money within the country. It is the obtaining of sufficient sterling overseas that is the only problem. Mr Webb might have added that the expansion of money within the Dominion is largely ineffective. An adequately increased production of goods in this country would make it possible comfortably to do without much of what is now imported and would contribute correspondingly Io a solution of the sterling funds problem. The root conditions of financial rehabilitation and economic betterment are a drastic curtailment of Government and other spending on public works and other things that may well be done without and an effective concentration of resources on useful production. It will be time enough to worry about an overflowing production of goods when it begins to come into prospect