MAJOR CRISIS

Evening Post, Volume CXXVIII, Issue 5, 6 July 1939, Page 15

MAJOR CRISIS

EXTRAVAGANCE BLAMED

MR: HAMILTON'S ATTACK

WHAT PEOPLE WANT

TO KNOW

The Government had been in office for three and a half years, during which time it had had the advantage of inheriting large reserves, and of prosperity and boom prices, and it was the duty of the Opposition to analyse the results of the Labour policy, Mr. Hamilton said. For the Government to say that conditions today were better than during the slump was no reply to the ei'iticism of present-day difficulties, How was the- Government handling the present situation and what was it going to do to get out of the hole it had got itself into? The Governor-General's Speech had not given any reply to that question- One inch of that speech had been used to ; give an indication of the Government's policy and forty-five inches had been pure propaganda. The Speech did not tell what the people wanted to know, but what the Government thought they ought to know. The people wanted to know what the Government was going to do to handle the difficult situation that had arisen.

Through the Government's lack of foresight and extravagant policy a major crisis had developed. Restrict {ions had become go severe that £3 could not be sent out of the country before an inquisitorial set of questions had been answered. If the Government could not manage the country better than that it should give way to someone* who could. (Government la,iiglitert)

The Government had stated that climatic conditions were the cause of the plight the farmers were in. . Had, the Commission now working on farm problems been get up to arrange for better weather? he asked. On another page of the Governor-General's Speech, however, the Government stated that exports had been quite satisfactory. Actually, the exports last year had only been exceeded on two occasions in the history of the Dominion, and yet the Government blamed the weather, New Zealand had a good climate and the weather had never troubled the farmers. Their trouble came from the Government's policy. MORE REVENUE NEEDED. j Referring to the brief mention of] coming legislation in the Speech from] the Throne, Mr. Hamilton said that1 there was no need to speculate about i the Government's action regarding j taxation, The Government's method j of dealing with taxation would be to | keep a weather, eye open for further revenue. ■ The mover'of the Address in Reply (Mr. X, M. Macfarlane) had said there was a housing shortage because of the shortage of skilled labour, and he was right, There were hundreds of skilled tradesmen on Public Works, and every effort to get them to return to housing had failed. The men could not be blamed, because they considered their present jobs were just as profitable and more permanent. The seconder of the motion (Mr. C. W. Boswell) had said , that totalitarianism was raising its head in New Zealand, and he was also right. What were the indications of totalitarianism? ihe asked.

Mr. A. S. Richards (Government, Boskill): The National Party.

The totalitarian idea was the idea of the Government having the exclusive use of propaganda, and the supremacy and dictation of the State. ■"We are getting a lot of this sort of propaganda all through the week and particularly on Sunday 'flights," added Itfr. Hamilton. "The idea, behind totalitarianism is dictatorship by the State. Democracy in New Zealand had never been questioned until the JLabour Government came into power.!'

Mi\ Hamilton said the member for Bay of Islands had frankly admitted that he was a Socialist. He had said] that his opponent had {old the people that the policy of the Government was the socialisation of the means of P«> duction, distribution, and exchange. Had Mr. Boswell agreed with that, and did other members of the Government agree with it? If the Government agreed with this definition of Socialism, why had it not put it in the forefront of its policy? The member for Bay of Islands had described the co-operative dairy factories as a testimony to the success of Socialism. From that it was clear that 1 he had no appreciation of these definitions. The co-operative system was one of the most effective methods of production used by Capitalism. It meant co-operation, but not State ownership. The co-operative dairy factory system had been a great success in New Zealand, but those who tried to pull the wool over ihe" eyes of the people by describing this system as Socialism were not telling the whole story. DEFENCE POLICY. Mr. Hamilton accused the Government of failing in its duty to provide New Zealand with a properly trained and properly equipped land defence force. It had spent a great deal of money on the Air Force and on the Wavy, he said, but it was not an answer to current criticism .to say that more money had been spent on defence dur-

ing the past three years than during the previous three. Thei money had been expended in building aerodromes, but ft was hardly correct to say the money had been spent on real defence. The Navy and the. Air Force were important, but most important of all was the land force. The New Zealand land forces were neither adequately trained nor fully equipped.

"We are all pacifists and none of us wants to see war, but we must face realities," continued Mr, Hamilton. "We must do our best to defend ourselves and we should not be leaning too much on Britain and Australia. The Government believes in compulsion in a lot of things, but it takes a different view of defence. If it could put its heart into national security as well as social security, the Opposition could offer it full co-operation. Today I there is serious tendency to neglect the responsibilities facing the country in defence," COST OF GOVERNMENT. Statements made by the Primp Minister in November, 1935, that further taxation was out of the question and that the cost of Government would not be increased were recalled by Mr. Hamilton. During 1938-39, Mr. Hamilton said, the Government had spent from the Consolidated Fund, unemployment tax, and borrowing the huge sum of £56,500,000, an increase of £ 23,000,000 since 1935^36. Those figures showed that the Government had had plenty of money and had spent it freely, Mr. Hamilton continued. The Government had also had three record . export years averaging £60,000,000 each, and there had been a plentiful supply of export wealth to enable it to carry on. When Labour assumed office the London funds totalled £44,000,000, but a few months ago they were down to ' under £7,000,000. He wondered if the Minister of Finance would endorse the statement made the previous night by the member for Bay of Islands that he was happy to see that result. The Government had leaned on the Reserve Bank to the extent of

£24,000,000. «'I wonder bow many people know the size of that overdraft," said Mr. Hamilton, "When the Government took over there was not one pound of overdraft so far as I remember. The whole reserve strength of that bank is now exhausted, and this is largely responsible for the Government's present embarrassment and the shortage of London funds.

: "People think that if we send money . from New Zealand to London we in- | crease the London funds. The oppo- | site is the result. If money comes from London to here, that increases the : London funds. The money hunted out of New Zefland by the Govei*nment's policy has all helped to reduce the London funds." RESERVES ALL GONE. , The whole of the reserves that the Government had inherited had been j used up, and now Mr. Nash was in London seeking a loan, In his last Budget, Mr. Nash said: f'No additional funds were raised abroad during the peiuod under review, the policy of the present Government being to repay external loans ac quickly as possible, and to restrict borrowings to amounts required for conversion purposes.'* The Opposition agreed with that, but the fact was that Mr. Nash was now trying to borrow more money, If the Government had, ..managed the affairs of the country prudently during the past three years it would have had £3,000,000 or £4,000,000 available in London to make a substantial reduction in the amount of the loan falling due for renewal. On the contrary, newspaper reports had it that Mr. Nash was asking for a substantial sum of new money as well.

Pealing with the import and export licensing regulations, . Mr. Hamilton said that they were the direct result of the Government's policy, and the House and the country would be interested to hear if they were to be per^ moment or temporary. The position, which necessitated their introduction had been brought about by the Government's lack of prudent foresight to meet the situation as it developed last year. The Government had shown a certain disrespect for capital and had made it difficult for capital to stay hi New Zealand, The State today was saying what people should import, but the London funds were not building UP and a "black" market was developing. In Germany, if a man was caught taking money out of the gauntry, his head was cut off, and it would be interesting to see just how far the New Zealand Government might have to go to carry out its policy, It was the most serious restriction that British people had ever experienced. INDUSTRIAL STRIFE*.

| On the question of industrial strife, iMr. Hamilton pointed to the fact that during the three years before Labour took office there were 51 strikes, and during the past three and a 1 quarter years there had been 189 strikes, affecting all sections of the community. "The present Labour Party taught the workers to strike, and that the strike was the only weapon to get justice for the worker," declared Mr. Hamilton. "Now they cannot stop the stream they started." Compulsory unionism, like Communism, could only survive in an atmosphere of industrial turmoil. Union leaders were preaching the gospel of hatred, that the employe- was the worker's natural enemy, and that was a dangerous and mischievous practice.

There had been a record expenditure of £6,474,000 last financial year on relief of unemployment, said Mr. Hamilton.

The Minister of Labour (the Hon. P. C. Webb): Providing full-time employment. Mr.- Hamilton: They are all unemployed when they are paid out of the Employment Promotion Fund,

Was there any connection between the reqord expenditure and! the fact that it was election year? asked Mr. Hamilton. (Government dissent.)

The rise in the cost of living was so 3erious that the Government* had admitted it through a responsible Minister. Everyone knew that the cost of living had outstripped a proportion of wages and that the real wages were such as to amount to a cut in the j people's standard of living. In thousands of homes, particularly, those where wages pr salaries were fixed, the cost of living was bearing heavily on the people. That was,the fault of the Government's policy. EXPORT INDUSTRIES. Touching on the farmers' position, Mr. Hamilton claimed that the Government was not sympathetic to the export industries. Costs and prices were real questions, and the Govern* ment had realised that the position | | was so serious that it'had set up a Commission to investigate the state of affairs. Taking 1914 as the base, dairy produce .was 7 per cent, higher, meat was 55 per cent, higher, and wool was at par. On the same basis nominal wages were up by 76 per cent., the cost of living by 55 per cent., farm expenditure by 50 per cent., and export prices for pastoral and dairy produce by 15 per cent. "It does not need an accountant to see how the farmers, particularly the wool and !store*sheep farmers, are at a disadvantage," said Mr. Hamilton. "All the farmers want is to be placed on an equa] basis and they will hold their own with the rest, and they are entitled to that."

He said that farmers were placed on a wage scale of ten shillings a day while others were on a scale of twenty shillings.

The Minister of Agriculture (the}

Hon. W. L. Martin); That is not correct.

Mr. Hamilton: It is not far wrong, INSULATION.

He went on to refer to the question oi insulation. "The Government has been talking about the wonderful effects of insulation," said Mr. Hamilton. "How is it getting on? Is the country being insulated at the expense of the exporters? Or is the Government having any difficulty 1» setting up a standard in New Zealand and putting up everyone to that standard?' I am sure the Commission will find an answer to that.

"New Zealand has never had a Government that has so seriously mismanaged affairs as the present Government. We have always enjoyed a wonderful name. I am afraid it is being damaged. The fact that no country outside will accept New Zealand currency is an indictment of any Government, but the present Government's policy will not permit of any amendment."