DOMINION TOPICS

Dominion, Volume 26, Issue 112, 4 February 1933, Page 16

DOMINION TOPICS

A Detested Impost.

Its surrender to the meretricious attractions of the sales tax, detested wherever it is in operation, is the crowning act of its folly. It is pledged to abolish the primage duty of 3 per cent, on tax-free British goods; if it adopts the Canadian sales tax, it will put a tax of 3 per cent, on domestic manufactures and one of 6 per cent, on imports. AVith the exchange inflation, there will then be a tariff of 35i per ceut. on imports nominally free of duty, of which 22} per cent, will have been added by the Government in absolute repudiation of its undertakings at Ottawa. The Ottawa spirit was invoked by the Government when, through Air. Downie Stewart, it asked for immediate conversion of the £5,0000,000 loan maturing in 1935; its breach of faith destroys that hope.— "N.Z. Herald." What of the Budget?

It is an imperative necessity on the part of a country which deliberately debases its currency that it should at the same time or at some near date balance its Budget. If it does not do so, he (Air. Stewart) warned the Government, a complete rot is liable to occur. This argument was developed by Mr. Stewart with a logic that must have impressed the House, as it will certainly impress the country, as irresistible. It is, in his' opinion, not merely an unsound policy, but a dangerous policy, on which the Government has embarked, and, this being his considered judgment, the community will agree with him that he comd not accept the responsibility of inviting Parliament to accept it. His speech was not only a closely reasoned criticism of the policy of exchange inflation, but inferential!}- also a solemn warning to his successor of the insecurity of the premises upon which the budgetary proposals for the ensuing year are founded.—"Otago Daily Times.” The Cost of the Wool Sales.

From the strength of the buyers’ benches it is very apparent that the world is still keenly interested in our wool production. One cannot help being impressed with the tremendous cost that must be incurred by buying firms in securing their requirements under the present system of selling. To maintain the heavy staffs of buyers, etc., in the Dominion must entail a very heavy expenditure, and when it is realised that all these costs have to be borne by the woolgrower, it must be regretted that there is not a more economical organisation for the disposal of our most valuable product In addition to the selling charges, including the maintenance of the large army of buyers, storage, and insurance costs will be incurred against this' wool, all adding to the expense of production, and in a season when every economy should be studied and put into practice. There appear to be many reasons why the present selling system should be thoroughly reorganised. — Dunedin “Star.” Retail Costs.

It is generally admitted that this country depends upon its agricultural production which provides the income on which all classes depend. If that shrinks in any way the country is In a parlous condition, and it-ran a risk of shrinkage to a very large extent. It was this consideration which made the opposition of the banks so incomprehensible, as they are supposed to take a more extended view. Retailers who joined in tl»e outcry have compensated themselves in some instances by adding the exchange to the price of goods already in stock. Logically they are entitled to do so. though not to join at the same time in the outcry. Doubtless when exchange come-i down, they will reduce the prices of goods in stock. —“Waikato Times.” Call for Unity.

As far as the cities are concerned, it may be said at once, that what is needed is not the creation of new parties, but the consolidation of the forces of sane politics in readiness for the determined efforts the Labour Party will make, in the near future, to capture the reins of government. Hitherto, the Socialists have reaped substantial advantages from the divided ranks that have opposed the champions of extreme views. For the moment, the sheet anchor of sane and orderly government, is in the rural electorates, but if city interests hope to keep the march of Socialism in check, they must learn the first lesson of true citizenship—they must surrender sectional interests and take a broadlybased view of the vital economic, financial and political problem confronting the people.—“Timaru Herald.” As Others See Us.

The farewell message of the party of Victorian farmers who completed a tour of New Zealand recently was something more than grateful courtesy. It is satisfactory to know that the visitors enjoyed their holiday, and that they found matters of common interest between primary production here and in the State of Victoria. But the point in the party’s acknowledgment of hospitality received which deserves the widest publicity was that tlie Australian farmers thought “New Zealand has only touched the fringe of its piimary producing potentialities.” Such a statement .coming from those who can be considered qualified to judge, should be an antidote to much that is pessimistic in regard to the future of the Dominion. There is still ample room for enterprise in New Zealand and in no way more than in regard to primary production. —“Taranaki Daily News.” . A Hidden Danger.

It is doubtful if those members of the Christchurch citizens’ unemploy ment committee who talk glibly of introducing the English dole system into New Zealand have considered the matter at all seriously, and it is satisfactory to note that one member of the committee has pointed out that no system can get away from the fact that there may be no more money to distribute. ' The English dole System was the subject of a special warning not so long ago from the head of the Salvation Army who, during a visit to New Zealand, departed sufficiently from the non-political policy of his organisation to express the fervent hope that the system would never be introduced in this country.—Christchurch “Star.”

To be Passed On.

If the Government now imposes a sales tax there will be a further attack upon the standard of living. No estimate of the probable yield from such a tax has been given, but in a country like New Zealand the figure would be small, and the tendency would be to drive up still further the prices of imported goods. The effects would be passed down to the primary producer, who. again, would find that his expected benefits from a 25 per cent, exchange rate were being whittled away. It is not surprising that the small farmer is in the main opposed to the Government’s action.—“ Auckland Star.” The Unemployment Fund.

The point is approaching, if it has not already been reached, at which the main consideration governing the expenditure from the Unemployment I' und must be to make the money go as far as possible. Apart, however, from the strain it imposes on Government finance and the country’s taxable capacity the present system of unemployment relief is open to grave objections. In the first place, its administration is defective and anomalous. Besides the Unemployment Board and the Alinister, whose relationship is at best doubtful, there are two State Departments and scores of local bodies concerned with the relief of unemployment. It is Inevitable that there should be confusion and overlapping in such an arrangement. Owing to a defective system of accounting, which has already been severely criticised by the National Expenditure Commission, it is not possible to estimate the administrative cost of relief, though it cannot be doubted that simpler administration would l>e much cheaper.—Christchurch “Press.” The Unconsidered Taxpayer.

It is not the equity of the exchange arrangement that commends itself to the Coalition, but the convenience. That is the same with income tax collection, with the application of the unemployment levy, and with everything else designed to bring revenue to the State. At the best it is a clumsy and uncertain method of giving relief to the producers, and we shall know what the result is only when experience of its operation indicates a definite trend one way or the other. Ministers are not concerned with any class that is presumably doing well because it is not included among those who appeal for assistance. People who are not either farmers or unemployed are considered fair game by Ministers in search of funds to carry on the forms of Government. The truth is that investigation would reveal many cases of extreme hardship among those who have been submitted to every conceivable kind of pressure by the taxcollectors.—“Southland Daily News.”

A Boost for Secondary' Industries.

Mr. Forbes’s promise that high exchange will have a beneficial effect on unemployment cannot be fulfilled unless the manufacturing industries expand. A big factor in the unemployment problem is contraction of the labour market not due entirely to the pressure of economic circumstance. New means of employment have therefore to be found, and there is not much room for such expansion outside the manufacturing industries. Defenders of high exchange, when put on the defensive, always allude to its success in Australia, but they should be able to see that New Zealand’s experience cannot be as happy as Australia’s unless Australia is followed all, not part, of the way.— Christchurch “Sun.” Abuse is not Argument

In the House so far the Government’s case has not been shaken. -It has been abused, of course, and those who support it have been vilified; but not one argument has been advanced to justify the assumption that the case is radically unsound. We do not favour the policy of pegging the exchange at an artificially high level, and we think the cost will be greater than the advocates of this course suspect; bur. the first step has been taken and now the country’s plain duty is to accept the situation and be watchful of events, so that if the results are unfavourable action may be taken to save us from worse. Certainly thinly veiled accusations of dishonesty, levelled without any substantial evidence, are useless, doing no more than reveal the temper of people too angry to argue.—“ Southland Times.” Limited Benefits.

The exchange premium will at once assist those branches of farming that depend largely on markets abroad. The dairy industry, for instance, consigns most of its output and will benefit from the addition due to exchange. The woolgrower and those who are concerned in the meat trade also expect to gain, but in Canterbury mixed farming is, of necessity, the general rule, and as things stand that branch will not obtain anything like the same degree of assistance. Canterbury produces wheat, oats, barley, linseed, grass seed and other seeds of marketable value, but the demand is purely domestic and the grower will not have the benefit of added exchange rates. It has been stated by a progressive farmer who is engaged in mixed farming that, based on returns over a period of three years, the exchange premium will only apply to .30 per cent, of his production, and 70 per cent, will obtain no benefit whatever.—“ Christchurch Tinies.” Labour Party’s Panacea.

The definite points in Mr. Holland’s general statement are that the prices of our produce are to he guaranteed and that workers are to be assured of good wages. This would be a happv state of affairs, but Mr. Holland is not clear bow it is to be brought about. He admits that paper money will have to he issued, but does not think that the amount need be very great. The capacity to produce, he says, is' the only possiblc foundation for the issue of credit. But tlie problem of production is to supply what people want. At present there is not. a great demand for the butter, cheese, wool, and meat which we produce, and it is hard to see how Mr. Holland can increase this demand by issuing paper money and making careful plans for production and distribution. He really aims at a system of Communism as practised in Russia, and it Is certain that this would not help us.—“Taranaki Herald.”