“Debt Destroying Will To Work”

Press, Volume CII, Issue 30286, 12 November 1963, Page 15

“Debt Destroying Will To Work”

The present obsolete, inadequate and dishonest financial policies employed by both National and Labour Governments were destroying initiative, enterprise and the will of the people of New Zealand to work, said the Social Credit leader, Mr V. F. Cracknell in Christchurch last evening. Mr Cracknell was speaking to an election campaign meeting of 160 persons in the Jellicoe Hall. “In a world of plenty, the old debt system of finance just won’t work,” he said, “The debt system fails to distribute goods and services fairly. “We find as consumers, we cannot enjoy the fruits of our labours without going into debt at rates of interest from 20 to 25 per cent with hire purchase.” The rising national and local body debts were the root causes of increasing taxation, he said. The average New Zealander was working four months in the year for the Government. “The people of New Zealand don’t like working so long for the Government “The worst possible aspect of the situation is that it is destroying the spirit and initiative and the will to work. . . . The small and mediumsized business and farmer is being squeezed out and so we find there is a growth of combines and monopolies, destroying true competition. So prices and costs will go up.”

The National Government had joined the World Bank and jeopardised the country’s economic sovereignty; and so far had not borrowed a penny. It had mortgaged New Zealand’s gold reserves and virtually all the unmined gold in New Zealand, he said. Social Credit was in the political field to fight inflation, said Mr Cracknell. Its answer to the debt-tax-cost spiral was to stop the preponderance of debt in the

economy. If would provide loans to local bodies free of interest and halve their costs of development and slash local body taxation. “The money would come from the use of the national credit, the people’s credit,” said Cr Cracknell. “What is it? It is the amount of credit or purchasing power required to enable goods or services to pass from hand to hand. It is a reflection of the real wealth and is made possible by our efforts to produce goods and services. It would come from the same source as 80 per cent of our money comes from—a simple process of book-keeping. You can take that from me as an accountant.” The change-over would be prudent, not over-night; the status quo would have to be recognised, he said. The national credit would be used for State and local body projects, he said. There was scope for the private investor and his position would be protected. Inflation would be defied. There was the old-fashioned type of inflation in which too much money was chasing too few goods. “But today, there is an ever-mounting volume of business being done on hire purchase. Today, it is a problem of inflated costs and it is caused not through too much money but through sheer lack of money.” Social Credit would reduce direct taxation and leave more money in the hands of the people, said Mr Cracknell. Mr Cracknell approved the Government’s protests against the French nuclear ■ tests and deplored the debt system in the American economy which he said was adjusted to production of defence goods. “They have to tax people to produce goods that don’t have to be bought,” he said.