SERIOUS TASK

Dominion, Volume 26, Issue 68, 13 December 1932, Page 8

SERIOUS TASK

Meeting the Emergency CABINET’S PROBLEMS Hard Work During Interval “NO QUICK WAY OUT” (By Our Parliamentary Representative) Frequent meetings of the Cabinet will be held between now and the Christinas holidays, and the Government expects to bo in a position to go ahead with framing policy measures early in the New Year. Two meetings were held yesterday, one in the morning and the other in the evening, the latter lasting until a late hour.

Last evening's meeting consisted mainly in a general discussion of the economic problems which will be the subject of new legislation when Parliament reassembles on January 26. Ministers have not had a real opportunity of conferring since the House adjourned on Friday evening owing to the absence of the Prime Minister, Mr. Forbes, and the Minister of Lands, Hon. E. A. Ransom, over the weekend, but a meeting was called immediately on their return yesterday. It is Cabinet’s intention to work right up to Christmas, when Ministers will spend a few days at their homes, returning to Wellington early in the New Year so as to be ready when the House meets with legislation to meet the emergency. Although there was a proviso in the Prime Minister’s adjournment motion on Friday enabling him to recall members earlier than January 26 if necessary, it is not thought this will be done, for the Government considers it will need the full seven weeks’ respite from Parliamentary work if it is to complete its programme and not have to present it piecemeal. End of a Phase. Ministers generally appear to regard the adjournment of Parliament as the end of a definite phase in the succession of problems which has confronted the Coalition since its formation nearly 15 months ago. It is recalled that shortly before the present session was opened, the Prime Minister expressed the opinion that there would be no need for more emergency legislation, and that the passing of the Estimates, the legislation to give effect to the Ottawa resolutions, and the Budget would be the principal business to be taken. Since that time, however, event! have moved rapidly in the economic sphere, and the continued slipping of price levels has altered the whole outlook. The present situation was not counted upon, especially in view of the fact that there was every indication that prices overseas would rise and so give much-needed relief to the exporters of the Dominion. The position to-day, therefore, is that the Government has been forced to recast many preconceived plans for the current financial year as well as for 1933-34, which it is feared will present the major problem. The Prime Minister remarked last evening that the adjournment would be availed of by the Cabinet to deal not only with the present crisis, but also with the budgetary position for next year. Remedial Measures Effects. It is frankly acknowledged in Cabinet circles that the outlook is serious, and that no half measures will be adequate to meet the position in view of the latest figures showing further contraction of the national income, which will make ir. more difficult for private persons as well as the State to meet their obligations. On the other hand, the future is not without hope, and Mr. Forbes himself said last evening that there was every prospect that now the bottom of the slump had apparently been reached, further remedial measures should be more effective iif the future, while some benefit might be expected from what steps had already been taken. Notwithstanding anything’ the New Zealand Government may do, it is emphasised in Cabinet circles that the outlook in this country is largely conditioned by the trend overseas, and the real move toward recovery, it is urged, must come from abroad. One influential member of the Cabinet went so. far as to say yesterday that whatever the Government did would be largely in the nature of a “temporary expediency,” for New Zealand’s whole economic life was dependent on overseas price movements. No Magic Formula. For this reason, it is pointed out in Cabinet circles, it would lie wholly unreasonable to expect the Government to devise a plan which would bring a return of prosperity in a day. “Anything done must depend for its ultimate success on overseas events," the same Minister said. “The country says in effect to the Government: ‘Physician, cure me immediately,’ but the cure is not as easy as that, and it is surely unreasonable to expect that it should be if it is to be lasting.” No matter what course it decides to take within the next few weeks, Cabinet is fully aware that it will have its critics.

Although even (he Government itself lias not decided upon any definite plan. It Is stated reliably in the Parliamentary lobbies that there Is every likelihood of the legislation of last year and this being advanced a stage further.

It is almost, certain that steps will be fatten to bring about another reduction in interest rates. From what can be gathered at the moment, Cabinet may decide on a general policy of further deflation, accompanied by a measure of Inflation, whether by means of increasing primary exporters’ returns by a bounty or some other way.