NO WAGES CUT

Dominion, Volume 26, Issue 101, 23 January 1933, Page 10

NO WAGES CUT

. Decision of Cabinet

* REDUCTION IN COSTS

Rate Rebates &nd Freights

LOWER BANK INTEREST

(By Our Parliamentary Representative)

Cabinet has reached, its final decisions in the preparation o£ its policy which has been evolved during the seven weeks of Parliaments adjournment, and which is to be placed before members of the Coalition Government at a caucus tomorrow morning. It is now clear that the legislation to be introduced ‘’during .the next few weeks will not be as drastic as that which marked .'the emergency session of a year ago when the Government took the first Steps to give effect to its programme of economic readjustment.

In the "first place it can be'’stated definitely that the Government has decided against making a further reduction of wages and salaries throughout the Public Service. Further paring of State expenditure is considered .necessary, and economies are being carried out in departmental spending wherever possible, but after going into all aspects of the question, Cabinet,decided that a third cut in the earnings of the employees would be unjustified. •As .the result of negotiations between the Government and the banks, it is expected that the overdraft rate will be reduced from 6 to 5 per cent, in the near future. For the past two years the primary concern of the United Government and then of the Coalition has been to bridge the gap between internal costs of production and wholesale prices on the overseas markets.

Costs anil Prices.

-The settled policy of the Coalition is to>reduce this disparity, and it is expected that the leaders of the Government will explain to to-morrow’s caucus their latest attempts to bring this about.

The increase of the exchange rate to 25 per cent, is admittedly one of the key moves in the Government’s present programme. It is claimed by the Ministry that the higher rate will assist farmers immediately by increasing their returns from export sales, and that in the future the country generally will benefit through the increase in the national income, set down by Mr. Coates at between ten and twelve million pounds. This having been done, the Government intends to set about reducing internal costs. -It is understood there will be no arbitrary reduction of interest rates by legislation as was enforced last year. The hope is expressed in Government circles that interest rates generally will fall in sympathy with the bank overdraft rate, while it is likely that the Government might make a move to convert to a lower rate of interest the £17,000,000 of Government bonds which mature next financial year.

In this respect, it may be noted that the £5,000,000 which matured on January 15 is being offered for conversion at the present time. As no large loans are falling due in London during the next few years, it is not unlikely that the Government will attempt to take advantage of any reduction of internal loan interest charges that can be secured.

A revision of the tariff schedules after an investigation under the terms of the Ottawa agreement is to be undertaken, and it is expected that in several instances the tariffs on British manufactured goods will be reduced to the benefit of both importers and wage.earners. •

Rural Rates- Burden.

Further relief is to he given to farmers by the renewal of the rebate on county rates. 'A rebate of 12j per cent, was given in 1931, it being stated then that the Highways Board revenue was in a healthy state and that-it was considered adviSiXe to divert the available surplus toward assisting county rates payments rather than to keep road maintenance expenditure at such a high figure in the meantime. On that occasion the cost of giving the rebate was about £250,000, but the remission next financial year may be increased to as high as 25 per cent.

, As a further measure of assistance in reducing costs, it ls likely that railway freight charges will be reduced shortly. These charges are stated to be a real factor in farm costing, and the Government has been in communication with the Railways Board on the question.