NOT COMING OFF

Evening Post, Volume CXVI, Issue 84, 6 October 1933, Page 8

NOT COMING OFF

THE EXCHANGE RATE

DEFINITE STATEMENT

TAXATION IMPOSTS

REDUCTION NOT POSSIBLE

A definite declaration that the exchange rate was not coining down was made by the Prime Minister (the Rt. Hon. G. W. Forbes) in the House of Representatives thisvmorning. Mr. Forbes said that high exchange was one of the important points in the Government's policy. The Prime Minister also stated that, much as the Government would like to reduce taxation, such a course was not possible at present, as it was essential that the State finances should be kept on a sound basis. Mr. Forbes said ha had no complaint .to make about the time that had b^en taken up by the Address-in-Reply deibate, as he considered that it was a good thing to allow members to commence the session with a general discussion of tho country's problems. He felt, however, that tho Government Iliad emerged from tho debate with the honours, and that all the arguments which had -been advancod from . the Labour benches had been satisfactorily answered. "There was a time," said l\lr. Forbes, "when Mr. Holland, the Leader of the Opposition, referred to me as the prophet of gloom, but I think my'mantle has been transferred to tho leader of tho Labour Party. Ho can see nothing but signs of disaster and gloom." ... ■, Mr. Holland: I only see disaster and gloom when I look straight ahead. Mr. Forbes said the morning paper contained many signs of an improvement in general conditions. Mr. F. W. Schramm' (Labour, Auckland East): -There is sunshine on the hills.' ATMOSPHERE OF GLOOM. Mr. Forbes said the- Government had pursued its course regardlass of consi"dJ orations of popularity. The Labour Party, on the other hand, was endeavouring to keep'up'the atmosphere of gloom. He referred to the cheering announcement'madeI'by the .Commonwealth. Prime Minister' (Mr. Lyons), and said that Mr.'Lyons' had once been »• Labour man. Mr. W. J. Jordan (Labour, Manukau): Yes, he was. Mr. Forbes: Mr. Lyons saw -that he could no longer remain in the Labour Party. If a man stands up to his convictions and says he can no longer follow a course that will only lead to disaster, he is. immediately disowned by ;the Labour Party. He must all the time bo preaching the Labour gospel. I must say that- the Labour Party is very Jloyalto its policy, and if anybody gets 'out of step he is no longer regarded as a Labour man. The same thing happened to Mr. Ramsay Mac Donald End Mr. J. H. Thomas. Mr. E. Semple (Labour, Wellington East): What did the Prime Minister think of the present Finance Minister .when he ratted from his party? Mr. Speaker ordered the withdrawal of the word "ratted," and Mr. Semple. complied. ' . Mr. Forbes: I don't waut to reflect on any member of this House who feels .that he has to take a certain course. He went on to say that. New Zealand should be very pleased that Australia was getting out of her difficulties. Mr., W. J. Poison. (Government, Stratford): High exchange. "UP AGAINST IT." Mr. Forbes:-Australia adopted high exchange before we did, and I think there is justification for saying that so far as Australia is concerned it has been very helpful. I would al3O like to point out that high o&hange was supported by. the Labour Prime Minister (Mr. Scullin), who realised .'that the country's prosperity depended on> the prosperity of the primary industries. The Leader of the Opposition: Tell us why you opposed high exchange? • Mr. Forbes: I would like to point out that New Zealand did not come into .tho slump to the same extent as Australia or at the same time, and the .'necessities that brought about the high exchange policy were greater than in New Zealand. We came up to the position in which we were "up against and we had to do something to help the farmers. I find it very hard to understand the bittor and determined opposition which has been expressed to our policy. Seeing how dependent we are on the farming industry it is extraordinary to fjnd any section of the community bitterly opposing it. BENEFIT TO FARMERS. ; Mr. Forbes quoted figures to show •that tho small farmers had received considerable benefit from tho high, exchange. One.would have thought that every section of the community would have been sufficiently far-sighted to tiave realised that their interests and their prosperity were wrapped up in .the prosperity of the farming industry. "I had the opportunity of discussing this question with the leading people in England and the general opinion was that under the circumstances Now Zealand had done quite •the right thing," said Mr. Forbes. "That is the view that people take looking -at the position from a distance. I think certain sections of the community in New Zealand have showii a very miserable spirit- in opposing us; their view is certainly a very narrow one." 1 Mr. Forbes instanced the steps being •taken in America to fix prices of primary produce, and asked if the Labour ,Party stood for that. Labour members: Certainly; we stand for guaranteed prices. Mr. Forbes: I haVe heard high exchange referred to as class legislation, but how can that be so when it is applied to the whole of an industry in ■ which there are rich men and poor men? I hope we will hear nothing more in regard to exchange. Mr. E. J. Howard (Labour, Christchurch South): Of course you do. A NATIONAL SPIRIT. Mr. Forbes: So far as that is concerned, there can be as much talk about exchange as you like; I don't suppose we will ever get a national spirit so ■long as the Labour Party goes round stirring up opposition. Wo have the importers going round saying that, the exchange is coming off, but they' are doing something which is not in the ■best interests of the country and someH.hirig which will destroy their own 'trade. ,-. Exchange is not coming oil; that is a , very detnite statement. High exchange is one of the main points of the Government's policy, and the public can rest assured that it will not be taken off. Mr. Howard: That means that it will he off in a month. (Laughter.) Mr. Forbes: That is a typically irresponsible interjection. Mr. D.- W. Coleman (Labour, Gisborne): You told us once that high exchange was not going to be put on. '' Mr. Forbes went on. to say that the Government was doing its best for the people of the country; as a whole,

whereas the Labour Party hoped to make political capital by bringing about a state of chaos. Labour members: You have chaos now; we don't need to make it. DOMINION'S EEPUTATION. Mr. Forbes said that one would think that the Labour Party would be looking for an improvement in general conditions as the people who wore behind their party were anxiously awaiting an improvement. Ho went on to refer to the success of tho conversion loan, and said it should be a matter for gratification to the people of tho Dominion to know that tho country was held in such high regard at Home. The Minister of Financo (tho Et. Hon. J. G. Coates): A well-governed community. • Mr. Forbes said that the people at Homo wero very complimentary about j the manner in which New Zealand had been administered, and tho remark was often made to him, "Well done, New Zealand." The general opinion was that the Government had done well. A Labour member: You have done everybody. Mr. Forbes said that New Zealand had had to tread unknown paths, but he was glad to say that tho country was coming out of its difficulties. NO TAXATION REDUCTION. It has been suggested that as taxation has been reduced in Australia New Zealand should follow suit, said Mr. Forbes. There is nothing that the Government would wish to do more than to bring about a reduction of taxation, as we realise the great additional burden which the people have had to cany. Anything that can be done to lighten that burden will be done, but we have first of all to know the extent of the benefits we will receive when a general improvement takes place. Australian taxation has been higher than ours. In 1932 the people of Australia were paying £13 5s 9d per head as against £11 9s 6d in New Zealand. In Australia, the people have paid by way of sales tax as much as £18,897,000, whereas the estimate in New Zealand is £1,650,000 for the first year. We are not in a position yet to deal with the question of reducing taxation, but there is no doubt that nothing would please the Minister of Finance or the Government better than to be able to announce reductions. Unfortunately, we are not able to do that at the present time.