GOVERNMENT'S POLICY.

Press, Volume LXIX, Issue 20906, 13 July 1933, Page 10

GOVERNMENT'S POLICY.

MEETING PRESENT DIFFICULTIES. BUDGETARY POSITION IMPROVED. jkfß COATES'S HOPE I'LL SI'LECH TO FARMERS. [THE PRESS Special Serrice.] WELLINGTON, July 12. A survey of the steps which the Government has taken to meet some of the difficulties confronting the farming community was given by the Acting-Prime Minister, the Rt. Hon. J. G. Coates, when addressing the Dominion conference of the New Zealand Farmers' Union to-day. Mr Coates expressed the view that New Zealand had more reason for hope at the present time than she had had a few months ago. Mr Coates said that he realised that he was talking to people who did not know what defeat was, and he hoped that they would be able to glean some encouragement from what he had to say. After all, NewZealand's general position was by no means hopeless. He referred to the sudden fall which had taken place in the price of everything that New Zealand produced, and said that there was some hope that recovery would be more rapid than had been the case in previous slumps, which had been more gradual in their progress. In order that New Zealand might preserve its high reputation abroad, the Government had been faced with the necessity of carrying out most unpleasant and unprecedented tasks. He wanted the farmers to realise that the Government had saved between £9,000,000 and £10,000,000 by curtailing Government expenditure. In order that the country might face its difficulties, it had been necessary that political thought should come together for the purpose of wholeheartedly tackling the problems they had to meet. That had led to the Coalition Government, which had been formed with the one objective of carrying out a definite programme. That programme, it ■was hoped, would bring about a measure of relief to the people. Sacrifices Borne. Unfortunately, said Mr Coates, prices had continued to fall, and it had been necessary for the Government to go even further and ask the people to bear greater sacrifices. There had been an unprecedented growth of unemployment, and all the efforts of the Government were being directed toward a solution of that problem. There were some who said that the job could be done more quickly than by methods adopted by the Government; but the object was to get men and women back into remunerative service as soon as was practicable. In the meantime, it had been necessary to reduce much of the country's overhead expenditure by way of wages cuts, interest reductions, and so on. There had been an all-round reduction in interest charges, the object of the Government being to get interest rates down to the lowest possible level. It might appear simple enough to effect that object; but it had to be remembered that there were tremendous influences opposd to any such policy. He was pleased to be able to say that so far as New Zealand's internal public debt was concerned, the response had been such as to make them all proud of the fact that there were people in the community who were witling to accept tremendous sacrifices straight away. It was gratifying to know, also, that the new level of interest for local body debentures of 4i per cent, was being generally accepted. The Cost of Living. Mr Coates said it was gratifying to know also that since January last there had been practically no increase in the cost of living. Admittedly there had been an increase in wholesale prices; but in spite of that it could be said that the wageearner was in quite a favourable position to-day compared with his position in January last. Dealing with the general budgetary position, Mr Coates said that it must be a source of great satisfaction to everybody to know that they had succeeded in squaring their budget. It was true that they had had to bring in certain reserves to do that; but his answer was that it •was in difficult times such as the present that reserves came in handy. This year the Government had budgeted for a deficit of £4.500,000. That estimate was made in January last, and since then there had been a further check-up As a result of that check, he could honestly say that he believed tjie position had improved. Instead of £4,500,000, it looked as if their deficit this year would be £3,500,000 at the very outside. That was verv encouraging, and he was hopeful that they would be able to improve the position still further. "I believe," said Mr Coates, that if once we can get our basic industries on a sound footing. and arp adjusted with prices, the result will ultimately reach the budget. It is absolutely essential that we should square the Budget within a reasonable period, say, two vears. We must paj - our wav in order to retain the prestige that we have gained for ourselves in the past." General Improvement. Mr Coates went on to refer to the general improvement which had taken place in the farming industry in recent months. He made particular reference to the wool position, and said that reports indicated that in South America and Australia wool production would be less this year than last. In South Africa, production would be definitely less. There had also been an improvement in the demand for company ehares. In conclusion, Mr Coates said that the Government greatly appreciated

the manner in which the farmers had stuck to their job. It was a matter of great comfort and inspiration to those who were endeavouring to cope with the situation that they had had almost a record export season; and that could not have been accomplished without good management and hard work. He believed that the present, was a time when they should keep cool heads and stand by those principles which they knew to be right. Mr Coatcs was warmly applauded at the conclusion of his address, and in responding to a vote of thanks he humorously referred to a clipping from an American paper which described him as "the best-hated man in New Zealand." (Laughter.),