The Waikato Times. SATURDAY, SEPTEMBER 16, 1939 NEW ZEALAND’S TASK

Waikato Times, Volume 125, Issue 20911, 16 September 1939, Page 6

The Waikato Times. SATURDAY, SEPTEMBER 16, 1939 NEW ZEALAND’S TASK

New Zealand’s task in financing its part in the war was explained in plain language by Mr Fraser and Mr Nash in the House ol‘ Representatives. Mr Nash said the cost would exceed the funds available in the Consolidated Fund and the Public Works Account, and that it was proposed to finance the campaign as far as possible from revenue and extra taxation before resorting to borrowing. If that course is followed, statesmanship will count for a great deal in New Zealand in the immediate future. It will be necessary to make the best possible use of the large volume of revenue that is already being collected from the people, to conserve what funds are available and thus avoid imposing any unnecessary burden. It is perhaps impossible at the moment to arrive at anything like an accurate estimate of the cost of purely war measures for the first year. Britain does not in the meantime advise that New Zealand should send troops overseas, and the Dominion Government is acting accordingly. It proposes to train batches of men for three months and retain them in industry until future policy is decided. Thus a particularly heavy cost in overseas operations will be avoided. Construction of camps, training of men and strengthening of the defences generally will, however, be costly. The wisdom and the capacity of the Government will be shown in the extent to which it can divert expenditure from non-essential activities to essential and war-time measures. Success in this line of action will be far more valuable to the nation than taking the line of least resistance and raising revenue by simply imposing additional taxation. “Clearly the maintenance of New Zealand farms would be as essential to the Allied cause as the provision of fighting forces,” Mr Fraser said. And just as clearly; the diversion of effort to production and war work will be much more necessary than the continuance of public works and other costly schemes which in the emergency of today cannot be regarded as essential. Probably Mr Fraser agrees heartily with that contention, and no doubt action will soon be taken to transfer large numbers of men from public works to the productive industries and defence works. No announcement has yet been made regarding the price to be paid by Britain for New Zealand’s produce, but that price may have an important bearing on the financing of the campaign. Mr Nash did affirm, however, that there was no intention to take advantage of the state of war to ask an unreasonable price. In addition to taking authority to raise loans, which it will “use sparingly,” the Government proposes “to use Reserve Bank credit where necessary, but care will be taken that the use of this credit does not result simply in inflation of the currency, with its harmful results.” It is unfortunate that New Zealand has already called heavily upon its credit and has used for other purposes substantial reserves which would have been especially valuable at the present time. It is also unfortunate that the war has found stocks of imported goods much lower than usual. The Government cannot begin too soon with the task of producing larger quantities of goods from both primary and secondary industries and building up the national income as far as possible.