FINANCIAL POLICY

Dominion, Volume 32, Issue 256, 27 July 1939, Page 10

FINANCIAL POLICY

Government Urged To Face Realities ATTITUDE TO CAPITAL Complete Change Advocated By Mr. Holland Three essential things must precede an improvement in the financial situation of New Zealand, said Mr. Holland (Opposition, Christ-, church North), when speaking during the Address-in-Reply debate in the House of Representatives last night. They were that the Government would have to face the realities of the situation, determine to do the proper thing and not the popular thing, and completely change its mental attitude and legislative action toward capital. “We are face to face with a major financial crisis,” said Mr. Holland. '.•The Reserve Bank report shows it. ami London financial comment leaves no doubt about it, and as debtors we should take cognizance of the opinion of our creditors. The position is that we have espent more than our record income, we have used up our reserves and resources, and this Government, which was never again going to borrow, is now trying to borrow to replenish the exhausted overseas funds. The unemployment funds had been used up, Mr. Holland continued, Reserve Bank resources of approximately £20,000,000 had lieen used, there was a prospective deficit of up to £2,000,000 to be met in the dairy account, th- J country was faced with a huge expenditure for Social Security and the relief of unemployment, and production showed a heavy decline. Local bor rowing had been exhausted, and the Post Office Savings Bank balances were being decreased by £500,000 a month. A Fool’s Paradise. “We are living in a fool’s paradise,” Mr. Holland declared. “The people have followed the example of the Government and have been spending all their savings. These expensive habits are going to take some correcting, and the tragedy of it is that they have been acquired in a time of plenty.” One of the first things that the Government should do, he said, was to give up abusing capital and scoffing at it. That applied specially to the Ministry. If a lead was given by lhe Ministers in this direction, it would do much to restore the reputation of the country. The biggest enemies of the country today were not the capitalists, as was so often claimed by the Government, hut those who jibed at capital. They had been the worst enemies of the Ministet of Finance in his mission to England, and were mainly responsible for the signal failure of that mission. Hr. Holland said that he hoped the Government would have the strength to stand up to the L.-ft Wing of the party, which would loathe and detest every line of the agreement reached by Mr. Nash. Import restrictions, lie said, should lie abandoned, and the regulation of imports left to the trading banks, . which were the normal chanix 1 for such . regulation. The policy of the Government had undermined the entire social tnid economic structure. Standard of Living. The policy of the Government, said Mr. Holland, was undermining the standard of living of the people, and unless the policy were checked would result in a lower standard of living. It was necessary to understand that a standard of living was not merely a standard of eating, but was made up of every commodity the country used. It was based on two things, the internal production of goods and the goods brought in in exchange for internal pro-’ duction. The Government’s insulation policy, he said, had been tried out and had failed miserably, because the Governin'. nt was trying to base a high standard of living on a receding income. The prosperity of the country depended.on two main industries, and production from these bad decreased. COST OF STATE HOUSES Facts Sought By Mr. Broadfoot “We want facts, but we have never bad the price of one house given,” said Mr. Broadfoot (Opposition, Waitomo) during the Address-in-Reply debate in the House of Representatives yesterday when criticizing what he described as the side-stepping by the Government of points raised in the no-confidence am.ndmcnt moved by the Leader of the Opposition, Mr. Hamilton. Mr. Broadfoot said he understood that a group of 19 State houses had averaged £l3OO apiece to build, excluding sections. With the iand, their prices might range up to £l5OO or £lOOO. He also alleged that artisans imported from overseas were guaranteed their wages whether the weather was wet or dry, but said that this did not apply to New Zealand workers. The Minister of Education, Mr. Fraser: That is incorrect. Don’t be stupid. Mr. Broadfoot: The Minister can talk of stupidity. He is a living example of it. Mr. Thorn (Government, Thames): Don't look so fierce. Mr. Broad foot: How could I look fierce when I see your smiling face? Discussing rural housing, Mr. Broadfoot said he realized that there wejje difficulties, hut .suggested that there must lie a solution. The Government could not expect stability in rural areas unless accommodation was available. POLICY IN CHINA Critic Of Mr. Chamberlain “Willi a Prime Minister such as Mr Chamberlain I doubt my own security I doubt the security of New Zealand or of any part of (lie Empire,” said Mr Anderton (Government, Eden) when discussing Britain's policy in China in rhe House of Representatives las’ night. "1 absolutely deny that any member on this side of the House is antl-British because he has an opinion and is not afraid to defend it. ’ Opposition voices: Nobody said you were anti-Britlsh. “We have sold out to a burglar, Mr (ndertoii said, in connexion with ooliey in China. “That is the position .Japan is a burglar. She Ims walked into China.” Mr. Anderton said that in these circumstances Britain’s policv was in effect "Good luck to you; we I will get out.”