BUDGET DEBATE

Evening Post, Volume CXXIV, Issue 86, 8 October 1937, Page 10

BUDGET DEBATE

EXCHANGE POSITION POLICY OF GOVERNMENT LABOUR & SOCIALISM The debate on the Budget was resumed in the House of Representatives this morning. "We have been told that this is a spending Budget," said the Rev. C. L. Carr (Government, Timaru). "Thank goodness for that, because,- as Ruskin and so many others have told us, our real wealth consists in what we spend and what we consume." The Financial Statement said that higher prices for meat and wool had contributed to the increased national income. Then it would appear that lower prices at some time in the future would threaten to contribute to a decrease in the national income. He trusted that that time would never come, but if and when overseas prices fell everything depended upon whether the present Government was in office, and whether it retained the support necessary to enable it to carry out its declared policy.

If and when such a time came it seemed to him that they would need not only a guaranteed price for dairy produce, but for meat and wool and everything else that the Dominion sent overseas. That would mean further demands upon the Reserve Bank and, in turn, he trusted, further use of the public credit. THE REAL TEST. "I think the real test of the present Government and its policy will come if and when there is a slump in overseas prices," Mr. Carr continued. "Such a use of the public credit as I have indicated will prove necessary if and when a slump comes overseas, and will mean maintaining a constant level of prices to the farmer and a stable standard of living for our producers and our people generally. That is Labour's policy." Mr. Caj? said that if the buying power of the people of New Zealand was maintained at, say, a 25 per cent, level above that of the people of Great Britain there would be no need to lower the exchange rate. Criticism had been directed at the Government that it had made no attempt to reduce the exchange rate. The previous Government had put an additional 15 per cent, premium on the exchange; that was artificial pegging of the exchange and could not be done without upsetting international trade and creating international barriers. The thing that should determine the exchange relationship between two countries was the buying power of the one as against the buying power of the other. If the buying power of the people of New Zealand was 25 per cent, above that of the people of Great Britain the exchange would automatically, if allowed to run free, register accordingly. There I was far less need today for a readjustment of the exchange than when the I previous Government was in office.

PREMIUM TO INDUSTRY.

The estimated deficit of £650,000 in the Dairy Account on account of guaranteed prices represented the amount of premium paid out of the public credit to the dairy industry. That amount had not been lost, even temporarily. It was not even a debt. It had gone into circulation, thereby stimulating production and consumpTlie real opposition to the Government was the inertia that inevitably settled upon people when their troubles were over. No progressive Government could ignore that inertia and to yield to it would mean the end of progress and achievement and the happiness Of the people. The Government could see economic and financial changes looming everywhere. The present money system was slowly disintegrating, whether they liked it or not, and the Government's job was to soften the blow during the transition period. The Budget was. in keeping with the true position. Labour was socialistic because it could read the signs of the times, said Mr. Carr. Socialism was the only safeguard against Communism. It was simply another name for co-operation, social organisation, as against social anarchy. SOCIALISM AND THE INDIVIDUAL. Mr. W. A. Bodkin (National, Central Otago) said that Socialism divorced the individual from capital and regimented the efforts of individuals for the profit of the State. It was claimed that there was no true liberty except under Socialism, but the Government had, by its legislation, conscripted every worker into unionism. ! Commenting on the remarks of the Minister of Lands (the Hon. F. Langstone) about taxation, Mr. Bodkin said the Minister had supported social credit and under social credit taxation should not be necessary. If the Minister of Lands had been Minister of Finance there would have been no taxation because he would have issued new money. The Minister of Finance had brought down an orthodox Budget, Mr. Bodkin said, but the Minister of Lands supported the use of public credit. What was the Minister of Finance going to say? Was the Minister of Lands the decoy duck that was to lead the Douglas credit or currency reform supporters to the next slaughter? Currency reform and Socialism were diametrically opposed. The currency reformers believed that all monetary ills could be cured within the present order. They were individualists and supporters of private enterprise. If the Labour Party thought it could get Douglas Social Credit people to support them again by using a decoy it was mistaken. |

The Prime Minister had attempted to justify the great burden of taxation on the ground that he was out to help the poor, but did the Prime Minister realise who paid the taxation? All taxation was passed on and it was safe to say that 80 per cent, of all taxation was paid by the comparatively poor. (Proceeding.)