STERLING AREA’S PROBLEMS

Press, Volume LXXXVIII, Issue 26639, 26 January 1952, Page 8

STERLING AREA’S PROBLEMS

POSSIBLE EFFECT 0$ N.Z. ECONOMY I MR SKINNER’S VHCIW (Ntw Zealand Preu AstoiMion) ® / WELLINGTON, January 21 ■ Imports into New Zealand would fet drastically reduced in the next yfle unless “a spendthrift policy of borrowing overseas for consumer require inents” was adopted by the Government, said the Acting-Leader of the Opposition (Mr C. F. Skinner) to-dw, when commenting on the Commo#, wealth Finance Ministers’ talks is London. ... ~ “The Labour Party views with eoacern the present crisis in the financW position of the sterling bloc," said Mt Skinner. “The Labour movement stands wholeheartedly behind the concept of the sterling area and will givs full support to measures that it conaiders will contribute to the mainte#ance of the area’s strength. ■. •• 5® “The statement of the Prime MiaUtter (Mr Holland) on the eve of hh departure from this country, that hj did not agree that he would nec#2 sarily return to New Zealand with I sad and sorry tale to tell trnntnaf' strangely with reports now emansthg from London, to the effect t iat HMR ures for individual countries are* expected to be very palatable. 4, It is obvious now that Mr WttiM will use the sterling area crMj> explain away the introduction of * ures which would have been ineviuhfl in any case as a result of the pnMK Government’s own actions. Durißf the last year the National Governs* deliberately based its import policy the short-lived bonanza in wool prwfc with the result that the country B expended practically All of this tK porary windfall, and our import* economy has been geared to a new IM , Expert Income 1 “A simple calculation based on W new and lower wool prices will stat that the New Zealand export inc* for 1952 will be hopelessly inadequate at the current rate of imports. It i# clear that in the forthcoming yip imports must be drastically reducedl one way or another, unless a spendthrift policy of borrowing overseas if consumer requirements is adopted. 4 “Two alternatives are pomlne either the restriction of imports w the deflationary methods adopted te the past, when the purchasing poww of the people was. seriously reduced; or a return to the Labour Govenment's policy of quantitative contsd of imports “It is through finport control tM our overseas funds can be eonservw to ensure that our external commitments may be met- that our import*tion of capital goods is not restricted: and that we obtain the essential fertilisers and raw materials for «w farms and our factories. Labour's ißport policy is the only positive methw by which full employment in NW Zealand can be maintained and w living standards of the people prolW ted,” Mr Skinner concluded.