FARMERS' PLIGHT.

Auckland Star, Volume LXIII, Issue 282, 28 November 1932, Page 7

FARMERS' PLIGHT.

CABINET IN DILEMMA. BANK OFFER CONSIDERED. NO TINAXj DECISION. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. Although no final decision has been reached by Cabinet on the Bank of New Zealand's local rate and land tax relief proposal, the opinion in informed lobby circles is that for a variety of reasons the proposition will not prove attractive and that the Ministry will be thrown back on its own resources to evolve some practical alternative that will serve the dual purpose of affording permanent relief to the primary producer and ensuring the general circulation of money. Arguments advanced against the bank's scheme are that it is too palliative in* character, that there would be no discrimination in the distribution of j relief proposed, that there would be a | danger of the additional funds finding their way back too rapidly to the financial "freezing chamber," and that the cost, in comparison with the possible benefits to a section only of the community, would be too much for the taxable capacity of the country. No announcement has yet been made a,s to the rate of interest at which the bank will make the sum of £2,000,000 available to the Government, and even in a preliminary consideration of the cost of this proposed financial accommodation, Cabinet could scarcely ignore the hint recently given by the Prime Minister that emergency measures may have to be taken early next year to deal witn the question of interest. The bank has offered the loan at a "reasonable rate of interest," but the Ministerial view as to what constitutes "a reasonable rate" may not be in sympathy with that of the general manager of the Bank of New Zealand. Solution Still Sought. However, notwithstanding six hours' deliberation on Saturday, Cabinet is still without a solution; and, while it _ may yet adopt partially, or reject entirely, the offer of the bank, it is certainly giving consideration to the formulation of other possible remedies which, in its opinion, may arrest the present drift. The objective of Cabinet is a scheme which will afford relief to the_ farmer in such a way that no one section of the community will be penalised. The idea underlying the whole of Saturday's discussion was that any scheme adopted would have to have the merit of putting money into circulation, so that it would be of benefit to the whole of the community. At the same time, the one practical result of the protracted deliberations was, apparently, a general recognition that action of some sort must be taken quickly to save the farmer, and that if proposed means of bringing him aid are to be consistently turned down by the Government, then the Administration itself must take the responsibility of devising some effective and practical alternative. Taxation Hurdle. To bring lasting relief to the pastoralist without completely exhausting the sources of taxation is the main problem before Ministers, who are well aware of the implication of the- Prime Minister's recent statement that the sources of taxation are drying up. There are some members of Cabinet, though, who do not wholly subscribe to this view, pointing out that taxation is much heavier in Australia and England than it is in New Zealand. It_ is believed, however, that for the time being, at any rate, the Ministry generally has accepted the .principle that it is not possible to impose any more taxation at present.

It has been suggested in some quarters that no progress will be made until more notice is taken of the general currency question, and it is said that at least one Minister believes that the time is approaching when more than passing thought will have to be given to the possibilities of establishing an internal currency system in New Zealand. In view of the revolutionary nature of this proposal, it is considered to be extremely unlikely that the Ministry will take up the question seriously, although it is Renown that from time to time it has received individual, but not collective, consideration. Plight of Unemployed. While Cabinet is devoting its time to the plight of the farmer, and Ministerial brows are becoming more furrowed as a result of the complexities it presents, there are city members who are 'wondering why the same measure of consideration is not being given to the straits of the workless and the alarming growth of the unemployment problem. "Is that all" said one city Coalitionist on Friday night, when acquainted with the bank's offer of assistance to the farmers. "What about the unemployed? There is nothing for them! Well, that is not good enough for me, and I don't care who knows it." It is improbable that any pronouncement of importance will issue from Cabinet for some days, for immediately after the meeting Messrs. Coates and Ransom left by steamer for the Motueka electorate. In the meantime, the other members will further analyse the proposals which are before them.