The Waikato Times. FRIDAY, OCTOBER 18, 1940. FOR ECONOMIC STABILITY

Waikato Times, Volume 127, Issue 21247, 18 October 1940, Page 4

The Waikato Times. FRIDAY, OCTOBER 18, 1940. FOR ECONOMIC STABILITY

Stability in an unstable world. That is the measure of the task which faces the Economic Stabilisation Conference, and particularly the working committee which for weeks has been investigating the economic labyrinths of the country to find an answer to perhaps the most difficult problem ever set a committee of men in the Dominion. The committee “ attempted to ensure that, commensurate with the maximum war effort, sufficient of the necessities of life will be available to all; shortages in the supply of goods will be fairly spread over the whole community; prices of goods necessary for the maintenance of a fair standard of living shall be kept down as much as possible; the goods value of the pound will, as far as possible, remain constant.” Those conditions cover the whole economic field. In its recommendations the committee has found it possible to advise the Government only on broad principles. For instance, to keep the value of the pound at a constant level it suggests that the prices of commodities must be more closely controlled. It agrees that it is not possible to stabilise money wages unless essential commodities are available at prices fixed for the same period as money wages. It therefore aims at stabilising the prices of essential foodstuffs, essential standard articles of clothing, footwear, household necessities, public services, rent, fuel and light. The question is, of course, whether that stability can be arrived at without injustice to some sections of the community. It is not enough simply to say that prices for such a list of goods shall be so and so. Inflation and stabilisation by the payment of subsidies are the subject of special warnings which may be applied to a wide range of industrial activity in New Zealand. The State subsidy is, in fact, one of the basic principles of such an important policy as the guaranteed price for dairy produce. The committee names fundamental objections to subsidies and urges that they should be given “ only when they cannot be avoided, and then only under stringent control.” It will be noted that the committee recommends the continuance of the policy of import control, with preference for goods most needed to carry on production. It is admitted, however, that it is practically impossible to control the prices of imported goods, just as it is impossible to name prices for goods exported from New Zealand. It could have been hoped that the committee would have been more explicit regarding public expenditure under the civil Budget. It has contented itself with the observation : “ In view of the very heavy war expenditure the country is called upon to bear, the committee recommends that all State and local body expenditure be carefully surveyed with the object of effecting reductions and economies wherever possible.” The public would have welcomed a more direct approach to this problem, for it is the common belief that top-heavy civil expenditure is one of the pfime causes of the instability which it is sought to check. The Government is recommended to reduce expenditure, but the importance of that aspect of national economy was worthy of greater detail and emphasis.