POVERTY TO PICNICS

Evening Post, Volume CXXV, Issue 48, 26 February 1938, Page 10

POVERTY TO PICNICS

AND GARDEN PARTIES

HOLIDAYS AND PLEASURE—

A RECORD

"Poverty has given way in New Zealand to picnicking—and in certain quarters to garden parties," said Mr. Savage. "A few years ago crowds gathered to demand more food and work, and they were given the charity that is as hard as a stone. This year the greatest assemblages all over the Dominion have been for pleasure. Every form of holidaying has been a record. This is the difference between having a Labour Government in power and a National Conservative Government in a panic.

"When the Labour Party routed the depression Government a little more than two years ago, the record of misery and muddle was a disgrace to an intelligent community. Except for its lessons, the depression in New Zealand is past history with no value. But these should not be forgotten. One can fairly say that in those five black years the people's eyes were opened to the fallacies of the old ideas of economics.

The system of leaving everything to private enterprise and hoping for the best was proved false by the great economic disaster. The attractions of private enterprise may still'please some, but they are not enough to satisfy the requirements of the people. , ;

"It is necessary to emphasise that fact, because there are'some men today who want to go back to the old system. They are the men who. wasted fouryears trying to turn the corner and then turned the wrong comer into the political wilderness. Let them remain there _or the proverbial forty years.

"The prosperity we know today must not be permitted to lull people into believing that social and economic reform was never necessary. We must build the new prosperity upon more stable foundations than the eld. AIM OF LABOUR'S POLICY. "The aim of Labour's policy is to give the Dominion a steadily rising level of prosperity instead of a succession of booms and slumps. And already the new ways are proving to be better methods in redistributing the increased national wealth. "One of the great truths the world has learned is that slumps and booms are not inevitable natural forces—or 'Acts of God'—working out their inescapable destiny. The history of the depression and of recovery the world over has surely taught us that' Governments must accept the responsibility for deciding the main direction of national economic development. We have had the spectacle of poverty and suffering in a world of technical efficiency: The conviction that is now .widely held; is that man can in. actual practice interfere successfully with the play of economic forces. Even Mr. Chamberlain, the head of a Tory Government, says: 'We have had to realise that even the most efficient industry cannot create or maintain the conditions necessary for successful operation—Governments must regulate the direction and volume of trade.' , . '

"One of the bogies which our opponents delight to conjure up is the prospect of another depression." They threaten the people with depression both from outside as a result of the so-called overseas recession, as well as from inside as the result of Labour's prosperity policy.

IF ANOTHER DEPRESSION COMES.

"Let there be no mistake or misunderstanding about it. Even if there is any recession overseas, Labour's policy is being- framed to avert the effects from being imposed on the people of this country.

"We have always stated that it' is possible to insulate the New Zealand economy from the effects of any world depression. Should such an occurrence again afflict the world—and I see no reason why it should—then I can assure you there will be no better test for the success or failure of our policy." Mr. Savage said that everyone knew that it was too late to discuss remedies when a crisis was upon them, and preparations must be laid in times of prosperity. "We have our plans ready— they are both comprehensive and detailed. It is largely a money problem. The Government is determined to base our money system on production. The Depression Government believed that the fall in overseas prices led naturally to a fall in national income which in its course must necessarily be followed by sacrifices all round to meet the straitened conditions. The Labour Party still holds that national income must and can be substantially ; maintained during bad times overseas. We would protect standards of living by maintaining wage.rates and employment—by protecting the farmers' income, and there must certainly be no cutting of public works on the score of economy, which was one of the cardinal errors of the past depression. Our standard of life can be limited only by our power to produce.

"The clearest lesson of the depression is that monetary policy is the most important single factor influencing a. country's economic prosperity. Already we have made use of the public credit in restoring prosperity—and we will not hesitate to use it further whenever necessity arises.

"In this connection I think it is my duty to contrast the state of affairs before Labour came into office with conditions today. As.a, result of the

ruthless deflationary policy of the Depression Government the Dominion amassed some £23,000,000 of sterling balances in London. They even reduced the National Debt during the depth of the depression! These were claimed to be the magnificent achievements of wise administration.

"But what was the result of that stupid policy in New Zealand? The consequences were inevitable. When Labour came into office over 57,000 men were without employment; not fewer than 175,000 men, women, and children were suffering from protracted impoverishment; only 3300 boys were learning trades; social services were curtailed -and hopelessly inadequate; 50 per cent, of 80,000 farmers were insolvent; wage cuts were so deep that the purchasing power of every class was affected; we had relief camps, sustenance on a starvation scale, and malnutrition, and people have not forgotten the soup kitchens and the old clothes drives. "ECONOMIC MESS." "Such was a part of the economic mess we had to clean up.. Those who had helped most to create these ruinous conditions now say that the causes were beyond political control. They also assert that if similar circumstances arose again, they would, if they got the chance, do the same-again. I will return to that aspect in a moment.

"I will say now that this can only mean that the Nationalists would again slash wages,, cripple enterprise, abandon public works,,and reduce pensions and unemployment relief to a beggar's pittance. They say we are spending too much money, which means, of course, that if they are returned again they will spend less. That must mean another depression in the making. "That is not a fanciful prediction," declared the Prime ; Minister. "It is a true summary of the Nationalists' policy in'practice. They call it prudent and safe administration against bad times. The mockery of those wretched conditions was that the great productive capacity of New Zealand was on the increase all the time, and so were our sterling balances. While Labour was in Opposition, ,we protested throughout the depression that the Coalition Government's policy was merely making conditions worse. We never ceased to point out the only alternative policy which would restore tolerable conditions. "There could be no argument about the errors of the National Government. They had attacked depression by methods which only made conditions 'worse. They wallowed in deflation, and based their policy on the theory that low wages were a cure for unemployment, and they would do the same again. Business and' industry could only, and did, become worse. Even private enterprise—the. very citadel of ! Conservative Government—was. besieged and: shattered. ' .-, "In sharp contrast to that destructive nonsense, the policy of the Labour Party was constructive. It believed that only by increasing the volume of spending was there any chance of business regaining prosperity. It was essential that the people of New Zealand should be. buyers as well as sellers. Towards the end of 1935 Labour was given its opportunity to reverse the disastrous policy of its predecessors. The beneficial results have been increasingly apparent. By increasing the standards of living and creating national assets, prosperity has not only been restored, but it has been increased to levels never before experienced in this country."