CHOICE BEFORE NEW ZEALAND

Dominion, Volume 34, Issue 182, 30 April 1941, Page 8

CHOICE BEFORE NEW ZEALAND

Social Services Or War

COMMENTS OF AUSTRALIAN JOURNAL

“Tlie choice which lies before the New Zealand Government is gradually becoming clearer,” “Johnson’s investment Digest,” Sydney. “It will be to decide whether the Dominion resources of labour and materials are sufficient to continue ambitious social 1 policies, which have outgrown their true proportion to the Government's industrial plans, and at the same time put the country on a footing for total war.”

Reviewing the Dominion's business position before the bringing down of the second wartime Budget, the “Digest” differentiates between conditions in Australia and New Zealand on the outbreak of war. In New Zealand’, it states, the Government already has assumed “a control over industry much greater than any supervision ever attempted in Australia, save in time of war.”

What the New Zealand Government had to do was not to erect new controls but to plan ways and means of adjusting existing controls to war time conditions and of “extending its control over parts of industry hitherto left to their own devices.” Therefore only a few modifications were necessary in the New Zealand economy. Price-fixing, State marketing, import selection involved a type of control very similar to that which conditions of total war demanded. All that was necessary when war broke out was to strengthen the existing organization and gazette new regulations, none of which involved vital changes in policy. Few changes in business were seen during the fiist year of the war; but now, as the "Digest” sees them, “farreaching changes are being increasingly demanded. . . . The stage when a mere tightening up of Government control was all jthat was necessary is past. Signs of strain are apparent.” Import restrictions and the augmentation of net overseas funds are reviewed and the conclusion is reached that “expansion of neavy industrial plant has been limited,” though light industries have expanded. Increase in Taxation.

Commercial opinion is quoted to show that taxation in New Zealand is excessive, for on the authority of the retiring president of the Auckland Chamber of Commerce, Mr. N. B. Spencer, it had increased from £l2/8/- a head in 1925-26 to £36/13/ 4 a head at present, and of that £36/13/4 only approximately £9/6/8 was for war purposes, the remainder being for public works and social services.

The “Digest” remarks .that the chief obstacle to a change in policy lies in the commitments of the Labour Party to its own supporters and the reluctance to sacrifice its social ideals in the service of Mars. Where possible the Government will provide both “guns and butter.” “But can New Zealand afford both?” The conflict is described as partly inherent in a defect of policy— “a. faulty adjustment between import restrictions designed to encourage local industries and high taxation intended to pay the price of social amelioration.” Reference is made to a check on the growth of local 1 industries imposed by the development of building up London funds and at the same time expanding local industries. Manufacturers have been complaining, even from since before the war, of difficulties in obtaining materials and equipment from overseas. The war has increased those difficulties.