SUBSIDIES AND PRICES

Press, Volume LXXXVI, Issue 26122, 26 May 1950, Page 8

SUBSIDIES AND PRICES

MR NASH CRITICISES GOVERNMENT EFFECT ON FAMILY MAN “Mr Holland is hitting the family man harder than all the rest of them. The removal of the subsidies hits the family harder than any other section of the community,” said the former Minister of Finance (Mr W. Nash) in an address at a public meeting in the Civic Theatre last evening, when he criticised the Government for “cutting subsidies and increasing the cost of living of every family in the country.” Mr Nash described the day on which Mr Holland made his statement about subsidies as “Black Friday,” and said it was one of the blackest days on which the country had ever had a pronouncement made by a Prime Minister. More than 2000 persons inside and outside the theatre heard Mr Nash’s address, in which he dealt with the reduction of subsidies, New Zealand’s overseas markets, and the country’s financial position. There were about 1400 persons inside the theatre and on the stage, and a crowd of 700 or 800 listened to Mr Nash in Manchester street, his address being relayed by a public address system. Mr T. Martin, acting-president of the Canterbury Trades Council, presided at the meeting, which was held under the auspices of the Federation of Labour and the Labour Party. On the stage with Mr Nash were three Min- * e js in the last Government, Messrs A. McLagan and T. H. McCombs, and Miss M B. Howard, and two members of Parliament, Messrs R. M. Macfarlane and A. E. Armstrong. Mr Nash was greeted with the singing of “For He s a Jolly Good Fellow’’ when he appeared on the stage, and was loudly applauded before and after his address.

<t _ “Still Packhorses” "What is the position of our little epumry to;day?” said Mr Nash. “Mr Holland said he would reduce the cost l lV i? n £ ease the load on mothers and housewives and stop them packhorses any longer. They still have to be packhorses, and they still have to carry their bread home because they can t afford the delivery charges as well as carrying less home than they had to carry home before.’’ Mr Nash said that on May 8 Mr Holland had said that he was going to remove the growing burden of subsidies and was going to take care to protect the living standard of the people But the removal of the subs *u ies family harder than any other section of the community. Mr Holland had said that wages would have to be increased to meet the increase in the cost of living, but the larger the family the greater the cost. A man who was earning £lO a week with overtime might receive 10s extra. but if he had five children, it was going to cost the mother 16s to a £ extra. If a single man received 10s extra it would cost him- nothing extra. “If Mr Holland compensates social security beneficiaries to the full extent of the increase in the cost of living he will have to find just as much money to pay them as he has saved on subsidies.” said Mr Nash. “Suppose he does increase wages. Then the manufacturer or employer will want to increase his prices because he is paying extra wages, and the worker and his family will earn more money to pay extra prices. Those who can afford it least will pay the most.”

Mr Nash said that Mr Holland had said that the subsidy system led to inefficiency because the manufacturer did not care. If the payment of subsidies tended to encourage inefficiency. then Mr Holland had to condemn the guaranteed price for the farmers. He could not get 5 per cent, of the farmers to drop it if he tried to drop it. London Funds Referring to Mr Holland’s criticism of the Government for bifilding up its London funds. Mr Nash said the funds had been built up to bring into the country materials to build State rental houses, expand hydro-electric works, and extend and improve the railway system. When the Labour Government was in office it had repaid £53.000,000 of overseas debt, and saved something like £2,400,000 a vear by way of interest. Mr Nash said that for six months of the year New Zealand sent a lot of goods to Britain, and for the next six months she brought a lot of goods in, which automatically depleted London funds. The funds were always at their lowest level in December, but they were higher in January and February, and in March. April, and May they were higher still. “The Reserve Bank’s sterling funds have grown to £56,700.000. and ! guarantee that if you read the figures published in to-night’s Gazette you will find that we have got £80.000.000 in London.” said Mr Nash. “That is plenty for a little country. We ought to be finding a way to live on our own resources, instead of going to the Old Country, which is having difficulty in making ends meet. “Mr Holland said that we have been living on inflationary credit.” said Mr Nash, referring to the Prime Minister’s financial statement issued on February 1. “He said that we have taken £26.000.000 from the Reserve Bank. That is true, but £11.000.000 was taken to repay loans, and we used something like £14.000.000 for the redemption of loans that were not converted in New Zealand.” Mr Nash said that the total sum the Labour Government had had from the Reserve Bank was £101.000,000. The Government had altered the exchange rate in 1948 because the alteration enabled New Zealand to buy goods from Britain and overseas at 20 per cent, less, and had created a debit and credit account of £20,000.000 between the Reserve Bank and the Treasury. The sum of £7.100.000 was invested in overseas securities, which could be realised at any time, and £7.000.000 had been advanced by the Reserve Bank for the redemption of public debt. Referring to the building of State rental houses. Mr Nash said that the Reserve Bank had advanced £42,700.000 for the purpose, and 36.000 homes had been built. For every £ advanced there was an asset worth 30s, and the Labour Government had not spent £1 of Reserve Bank credit other than to create an asset. If the Reserve Bank had not advanced the money for the purpose, there would not have been a single State rental home in the country to-day. Mr Nash spoke for nearly one hour and a half. After he had answered several questions, the following motion was moved by Mr R. T. Newman:— “That this meeting of Christchurch citizens thanks Mr Nash for his clear and lucid exposition of the financial policy of the Labour Party, expresses its appreciation of the high and improved standards of living achieved during the 14 years of Labour administration, and registers its protest against the misrepresentation of the finances of Nev? Zealand by the National Government through the Prime Minister (Mr Holland) and in particular his breach of the undertakings given to the electors last year f o reduce costs. “It urges Mr Fraser and his '*olleagues to take every possible step in Parliament to resist the increase in living costs and any future attacks that the National Government may make on the conditions and costs of living of workers, social security beneficiaries and their families.” The motion was carried without dissent.