THE NATIONAL PURSE

Evening Post, Issue 47, 23 August 1935, Page 11

THE NATIONAL PURSE

HIGH' EXCHANGE' 'HATE

LABOUR'S ALTERNATIVE

(By Telegraph—Press Association.)

CAMBRIDGE, This Day.

A statement made by Sir Alfred Ranrom at Duriedin that the raising of the rate of exchange had expanded the national spending, power by at least £10,000,000 annually was disputed by Mr. M. J. Savage, Leader of the Opposition, when addressing a large audience at Cambridge last evening.

Mr. Savage said that the raising of the exchange had only transferred existing spending power from some pockets into others. • The' aggregate amount of spending power had not expanded. In the past ten years ,'dairy farmers had doubled-their output but the cash returns remained about the fsame. It seemed right to suggest that ■increased production was useless unless the benefit reached the people, including the farmers, by means of increased purchasing power. Mr. Savage said that Sir Alfred Ransom had quite overlooked the fact that wages and salaries had been reduced by not less than £100,000,000 since 1930, and it was not.very difficult for even an Acting Prime Minister to see that his exaggerated bill of costs could easily have been met if wages had not been reduced during the period of increasing production.

Referring to the Dairy Commission, Mr. Savage said it seemed to have overlooked the fact that under the competitive system they were expected to provide for the average farmer in a country which guaranteed the salaries and wages of-a-large section- of the community. It should not be impossible to guarantee an income in equitable relationship to the, services rendered by the primary producers. It was quite clear that unless the farmers received1 some guarantee on that basis, they.and all others soon would be reduced to the living standards of overseas competitors.

Mr. Savage said the alternative, to raising the rate of exchange was guaranteed prices. Definite trade agreements, allocation of overseas credits for the purposes of these agreements, and controlled exchange by a national banking system would enable the Government of New Zealand to make available to traders at par all overseas credits required to give effect to the Dominion's part in any trade agreement with Britain or any other coun^ try. Dealing with tariffs, Mr. Savage said immediate steps should be taken ■ to enter into agreements with other parts of the British Commonwealth, with.the object of exchanging primary products for goods that were not economically produced in the Dominion. Increased and ineqiiitable'forms of taxation had reached breaking point during 1933 and 1934. Fifty millions had been collected by means, of sales, Customs, and unemployment taxes and the high rate of exchange. The Labour Party was of the opinion that war debts between nations, should be cancelled, and if the party.became the Government it would enter into immediate negotiations to achieve this purpose.