WAR FINANCE

Wairarapa Times-Age, 7 October 1940, Page 8

WAR FINANCE

PRINCIPLE OF COMPULSION SACRIFICES BY EVERYONE ESSENTIAL. MR J. ROBERTSON’S VIEWS ON LOAN PROPOSAL. In a discussion on war finance in the House of Representatives on Friday, Mr J. Robertson, Member for Mastertonr, referring to people who had in a time of crisis removed their wealth in order to try to damage the economy of their own country, said if these people did deserve any consideration, it was preposterous to claim that that could ever be extended on the grounds of patriotism. Patriotism seemed to come to life in some people only when the country was at war. He did not believe in patriotism which disappeared in peace time and which was superimposed on the interests of private enterprise. In the war loan in the last war the subscribers were paid 41 per cent free of income tax. He was glad to say that the basis of the present loan was very different and provided a definite test of the patriotism of those who had so much to say about patriotism. MOST PROSPEROUS COUNTRIES.

After referring to a statement by the member for Patea, Mr Robertson said it was an unassailable fact that the highly-taxed countries of the world were the most prosperous and enjoyed the best standard of living. The reason was not far to see —those were the countries which had developed their social services to the highest point and those services could only be provided out of taxation. The only thing that differentiated the borrowing of money on a voluntary basis from the conscription of wealth, Mr Robertson went on to observe, was the compulsory element and that was in this loan proposal and it was unreasonable and inconsistent to uphold conscription of wealth on the one hand and oppose compulsion on the other. COMPULSION. After quoting a statement made by Lord. Beaverbrook giving his views on war finance, Mr Robertson said: —“The principle of compulsion, as advocated by Lord Beaverbrook, is just the same as the principle of compulsion behind this loan. The fact remains that the few prosperous business companies referred to by the hon. member for Tauranga will be compelled to subscribe to the loan in the same way as Lord Beaverbrook advocated that companies of the same nature should be compelled to subscribe to the British loan. It is obvious that every section of the community will have to make sacrifices. . . . The principle of conscription of wealth must be applied. There is sound moral justification for it. Moreover, 1 would submit there is also a very sound economic justification. It is obvious that a large share of our national production must be devoted to war purposes. It has been stated quite definitely by the Minister of Finance and agreed to by others that the war can only be fought with the production brought into being during the war. The object of taking away money and using it for war purposes is to preserve the economic balance. It is clear that if that money were not taken up and used to prosecute the war it would be left against a diminishing quantity of goods which would produce a very bad measure of inflation. By taking that purchasing power away from the people in’ whose hands it is and giving it to the Government, which is the purchaser of the goods required for the war, we are assisting to maintain an economic balance, prevent inflation and retain our standard of living so far as it can be retained under war conditions. If we take the fact that the quantity of commodities available for civil use is less, then it is obvious wo must do something to equate the spending power available with those commodities. INCREASED PRODUCTION. “It is true,” said Mr Robertson, “that commodities have decreased, and it is further true that the largest decrease has occurred because it is impossible to get them owing to the war having involved so many countries which previously were open to trade, and also owing to the difficulty of transport under war conditions. It is commonly agreed that we must endeavour to increase our production to replace as far as possible those commodities which have been diverted from the purposes of civil life to those of war. . . .Apart from the production of those consumable goods which we eat and wear, apart from those other goods which we ourselves produce in such quantity, our difficulty today in expanding production is the same difficulty that confronts us in regard to the import of goods—the practical impossibility of being able to import the necessary machinery. and. in many cases, the raw material required to produce those goods here. There is no question that the issue of credit, whether from a State bank, or in any other way. can obviate that difficulty, and I think New Zealand must face that position. That is what provides us with the logical basis for cur appeal to the people engaged in industry in this country io work harder and produce more; to make a fuller utilisation of the machinery of production which we now have.’