N.Z. ECONOMIC PROBLEMS

Press, Volume LXXXIX, Issue 27011, 10 April 1953, Page 2

N.Z. ECONOMIC PROBLEMS

Government Spending Criticised FARMERS’ LEADER OPENS NORTH ISLAND TOUR (New Zealand Press Association) MASTERTON, April 9. “The greatest internal problem in New Zealand today is Government spending,” said Mr John Andrew, Dominion president of Federated Farmers, when he opened a North Island tour in Masterton this afternoon. He realised, he said, that Government spending could not be stopped overnight, but there was no doubt that the Government was spending far too much money, and it was making it difficult to put aside the amount of capital needed to increase production. The special committee on taxation he added, had made that point forcibly. The committee also had said that internal Government spending was the root cause of the decline in the value of money, which in turn was the cause of a great number of New Zealand’s problems. “That, policy, coupled with the idea of the welfare State, of isolation and insulation, and the complete protection idea, has caused a very large proportion of our internal difficulties,” he said. “It has led to a diffusion of effort and to New Zealand undertaking quite a number of activities for which it is not suited.”

Mr Andrew congratulated the Minister of Industries and Commerce (Mr J. T. Watts) on his statement recently at Auckland that the policy of New Zealand for the next few years should be the consolidation and expansion of existing primary and manufacturing industries rather than the diversification of effort in new fields. “If we had the wealth-producing State advocated by Mr Watts instead of the welfare State we have at present, then factories for the manufacture of superphosphate would be a first priority in our construction policy,” said Mr Andrew. “Taxation is probably the greatest single factor in the high cost of living in New Zealand today,” he added. Heavy taxation was caused by heavy Government spending. Heavy taxation, were it fair, might be justified on some counts, but some factors of it were most unfair.

Mr Andrew said he referred in particular to livestock taxation. The legislation brought down by the Government last year was only a palliative. It was hard to understand why the Government continued to allow people to write down their stock values at the end of the first year, and why the Taxation Department actually encouraged them to do so. It was the root cause of the whole trouble, and Federated Farmers had proposed a simple alternative system to get over the trouble.