The Dominion SATURDAY, JULY 1, 1939. MORE DANGER SIGNALS

Dominion, Volume 32, Issue 234, 1 July 1939, Page 10

The Dominion SATURDAY, JULY 1, 1939. MORE DANGER SIGNALS

One might imagine from the speeches of members . of the Government Party in the opening debate of the session.this week that they still have no real idea of the desperate position into which they have brought the finances of the country. In reply to Opposition criticism, the answer repeatedly made was to refer back to the hardships of the depression period and point to the better times of the past three years. No serious attempt was made to explain how the present situation is to be remedied —how our obligations are to be met, and trading conditions restored. \ The bettered conditions, of which so .much is heard, have been due/in the main, to unprecedented spending in almost eveiy direction. That spending was made possible largely through the accumulated resources made available by previous .Governments, and by heavy borrowing and heavy increases of taxation on all classes. The accumulated funds are now spent, including nearly £40,000,000 of overseas funds; borrowing is not so easy, and taxation has been draining the resources from which it is derived and weakening future yields. Facts such as these are brushed aside by Government speakers, who can see only the benefits and not the effects which must inevitably follow the squandering of the means which have made the benefits possible. Yet the signs are plain enough. Even in today’s messages from London come warnings that only the most foolish could ignore. Lord Balfour of Burleigh, in his presidential address at the annual meeting of . the National Bank, while urging the necessity for New Zealand being assisted by means of fresh English loans, does not attempt to cover up the seriousness of the position of the Dominion, and the disappointing results of import control. Commercial default by this country is spoken of unless British financiers come to the rescue. This is not an imaginary danger confronting the Dominion. One London journal suggests that our London balances are so low' today that we may be faced with the risk of being unable to meet commercial trading obligations within three weeks unless something is done to improve the situation. It may be hoped that this is an extreme view, and that, in the meantime Mr. Nash may be able to secure a loan. But even if he is successful in this respect, it is plain that this country cannot go on as it has been doing, and that any relief which may be obtained will only be of a temporary nature unless there is a change of’policy. At the moment members of the Government find this an unpleasant fact to face. But it was not so long ago that the Finance Minister had to admit that the “policy of spending” so confidently advocated as the sure road to prosperity had now to be abandoned in favour of a “policy .of saving.” It was only recently, too, that the Government was compelled to abandon its proposed determination not to borrow on the London market; and to send Mr. Nash, cap in hand, on his present mission. These are in themselves plain admissions of past errors of policy which have contributed to the position now reached. But unfortunately the present Government refuses to face’ facts which are disagreeable to it, and ignores the danger signals till it has landed itself and the country in difficulties. More money is being spent today to provide subsidized work for the otherwise workless than it was ever necessary tp spend before in this country. More money will be required this year from taxation than ever before to make ends meet; there is (if the money can be raised) to be more borrowing than at any previous time save in the war years in order that the Government may bolster up the. policy which has crippled our overseas trade and which threatens the security of the markets on which we must depend for whatever degree of prosperity-we can hope to enjoy. The dangersignals grow increasingly plain.