POSITION SOUND

Evening Post, Volume CX, Issue 51, 28 August 1930, Page 15

POSITION SOUND

OUK ECONOMIC STATE

CONTRAST WITH AUSTRALIA

(By Telegraph.) (Special to "The Evening Post.")

CHRISTCHTTRCH, 27th August,

"After considering carefully our increased production, as shown by our exports last year;.our banking figures, which reveal a sum amounting to over £30,000,000 held on fixed deposit, and our credit on the London market, I can see no real grounds for pessimism as to the economic stability of New Zealand," said Mr. G. Lawn, M.A., actingProfessor of Economics at Canterbury College, to-day when discussing Sir Otto Niemeyor's report on' Australia's economic position, and comparing Australian conditions with New Zealand. '' No' doubt business is slack in some quarters, but we have resources that should enable us to weather* the pre: sent temporary depression,, which, by the way, is not nearly so bad as some the country has experienced."

It had to be remembered, said Mr. Lawn, that Australia had fox a number of years experienced adverse balances of trade. Imports had consistently exceeded exports in value. Such, however, had not been the case in New Zealand.

In 1928 and 1929 the Dominion had enjoyed two good years. For the twelve months ended March, 1928, our favourable balance of trade was £10,OOOJ)00, and for the year ended March, 1929, exports had again 'exceeded imports to the value of £.12,000,000. Last yodr, it was true, the Dominion had experienced an adverse balance of trade to tho extent, of £100,000, but it had to be remembered that large quantities of wool were still held in store. Furtherj production had increased, a point that was not generally appreciated. . ' , , Last year's exports showed that mereases w6re recorded as follow: — . Butter (ewt) ..... : 200,000J^amb (cwt) ...... 100,000 Mutton (cwt) ..... 60,000 1 Sheepskins ...... 1,000,000 In some cases these increases in production had offset the fall in prices. In other cases, wool for example, the farmers'" losses had been eased. TO MEET FALLING PKICES. "When one considers these- figures carefully," said Mr. Lawn, "it is readily seen that.the economic position in New Zealand is. in no way comparable to that in Australia. Unfortunately, the gravity of tho economic crisis in Australia is apt to create un-. due pessimism in New Zealand." "Prices arc falling here; there is a certain slackness of trade, and there is a tendency among, investors to seek gilt-edged investments or .resort to fixed deposit, but there is no reason for pessimism. There is a need for sound public finance, and close cooperation on the part of every individual. We must continue to maintain the process of increasing production sufficient to meet falling prices. At the present time world prices show no indication of taking an upward turn, and the Home market is not promising.' * "But New Zealand is in a favourable position to meet the present situation, provided that all sections of the community—farmers, business men, manufacturers, trade unions, etc.—do-operate io organise the productive activities of the country in the; most efficient manner,"- said Mr. Lawn. ■"A. frank discussion of the position by representatives1 of all sections of the community would help materially to bring about necessary readjustments with a minimum of friction. The one thing that New Zealand must avoid at all costs is industrial unrest, for; that would retard our recovery and possibly land the country i,nto a position which the existing depression does not warrant." ' Dealing with Sir.Otto's remark, that <<the standard of living in Australia had reached a point which economically was beyond tho capacity of the country to bear without considerable reduction in costs," Mr. Lawn Said that the high standard of living obtaining to-day in New Zealand could be maintained provided that, the per capita production was increased sufficiently* to offset falling prices. The present high exchange rate would tend to reduce imports once existing orders had been filled, and this fact, added to increased production, would enable _ the Dominion to return to and maintain a favourable balance of trade. Both bankers and privato traders, added Mr. Lawn, wero now less apt to dissipate temporary export _ surpluses by excessive expansions; of imports, a. point that would further assist m the maintaining of a stable economic position. Although the large sum held on fixed deposit in this country was not advantageous in that it indicated a lack -of confidence on tho part of_ the investors, it indicated also that there were large sums of money available when' the present depression - had passed. ' ' . ~%