Labour’s Policy

Dominion, Volume 30, Issue 175, 21 April 1937, Page 13

Labour’s Policy

Sir, —The ignorance displayed by "Ajax” as to the political history of this Dominion leads one to believe that he must be a modern Rip Van Winkle. The Labour movement has always stood for the nationalisation of the means of production, distribution, and exchange. It was the vagueness of such a policy that did not appeal to electors. The newspaper files would tell “Ajax” that the late leader of the Labour Party, Mr. 11. E. Holland, in a pre-election address at the Wellington Town Hall in 1931, emphasised the Labour policy of nationalising the means of production, distribution and exchange, and proposed, should the party be elected to power, as a first step to. nationalise the trading banks and borrow £25,000,000 internally to carry out its various State activities. Trusting to memory, at the same meeting the hon. member for Wellington East was chided by the leader for suggesting a State note-issue in view of the £25,000,000 internal loan. Had “Ajax” been at that meeting I think he would agree with me that there was no attempt by the Parliamentary Labour Party to conceal its nationalising policy. It was the gross inactivity and lack of cohesion of the Coalition Government that gave the Labour Party its great opportunity and policy. The pegging of the exchange at 25 per cent, on Loudon was nothing more or less than a guaranteed price to exporters, guaranteeing them 25 per cent, increase on London prices in New Zealand currency. The ily in the ointment was that it put up the cost of living by making the taxpayer pay through the purchase of imports. But, drastic as it was, it stopped the primary industries from total collapse. The next step by the Coalition Government in assisting the Labour Party to power was the setting up of a Reserve Bank. The original draft by Sir Otto Niemeyer was amended by the Coalition Government to stop outside interests controlling the bank and note-issue. The operations of this bank in the first week of its existence proved its worth to the Dominion. It paid oft some £16,000,000 Treasury bills, acquired £20,000,000 surplus sterling held by the trading banks, and later bought about £7,000,000 gold currency from the trading banks with its note-issue. The carrying out of these financial operations cost the taxpayers nothing—in fact, the taxpayer was relieved to the extent of £2,000.000 for the Treasury bills carried an interest rate of 5i per cent., an extraordinary rate for short-term loans. Had the Coalition Government made more use of this bank it probably would have remained in power, but it was such a slave to the orthodox that, failing the first few major operations, this bank remained idle with the country full of stagnant industries needing assistance. Knowing these political historical facts, it was an easy matter for the Labour Party to frame a practical policy to nationalise the means of production, distribution and exchange. While, in the meantime, retaining the Coalition guaranteed exchange price, its policy was to have its own guaranteed price to dairy exports, f.o.b. main ports. This industry, in spite of the exchange bonus, was on its beam ends. The difference between the two guaranteed prices is that the taxpayer is paying the exchange bonus, whereas the Reserve Bank is paying the deficit on the dairy account without the assistance of the taxpayer. By making the Reserve Bank a national institution the Labour Government in one fell swoop nationalised the means of exchange between Britain and New Zealand.

In paying the guaranteed price the Government had of necessity to buy the total export output—a decided step in the nationalisation of the means of production ; and we have with us a Minister of Marketing, and a dairy products internal marketing officer appointed by the Government—a step to nationalise distribution. An intensive Public Works policy, made possible by the Reserve Bank, and shorter working hours, completes the policy advocated by all Labour candidates at the last general election.

“Ajax” says that Mr. Savage’s manifesto was different to the objective of the Labour Party. I personally heard the Rt. Hon. M. J. Savage’s pre-election oration to Wellington East electors on the lines I have stated, and he gave due emphasis to the statement that the Labour Party would issue necessary credit from the Reserve Bank to implement its policy and not borrow money. So far he has been true to his colours. “Ajax” says that the electors were misled, whereas the electors did not know what they wanted. It was the'Labour Party’s policy—not the electors! It cotfld be more truthfully stated that the electors knew what they did not want. — I am, etc., G. H. WILKIN Wellington, April 13.