"THE- MUDHOLES"

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

"THE- MUDHOLES"

MR. SAVAGE IN REPLY

OPPOSITION RESPONSIBLE

*'I AM NOT WORRYING"

"One thing stood out in the. general attack made by the Leader of the Opposition, while he was doing his HighJand fling from one mudhole to another for ammunition to fire at the Government —he seemed to overlook the fact that he and his associates were responsible for the mudholes," said the Prime Minister in opening his reply to Mr. Hamilton's remarks. "I think I will prove that right up to the, hilt before I am through." "'

Mr. Savage said Mr. Hamilton:wanted to discuss New Zealand at the present time. "I wonder why?" he asked. "It seems that the Leader of the Opposition must have had a past he does not want brought into the open. He said the Opposition was not on trial. I agree. They had their trial and were condemned.

Mr. Hamilton: They will come again

Mr. Savage: He says the people want to know how the Government is going j to handle the present situation. Per-! haps the people would like to know what he would do. He says that democracy has never been questioned before until now. This is the hon. member who was part and parcel of the Government who refused to allow public servants to open their mouths at political meetings. A voice: And extended the life of Parliament. Mr. Savage: Yes, from three to four years. These are the democrats! He quoted me as saying some time ago that I would face this session without any worry. I say the same now. I am not worrying a little bit. He also wants to know if the import restrictions are to be permanent or part of a plan. Let me repeat what I have said a dozen times—our methods maychange, but our objective never will. We set out, not to order things we could not pay for but to build industry in New Zealand, and we do not ask the people to put money into that and have their interest torpedoed in twelve months or t\yo years. r agree that protection might be applied to a given industry. For that reason I say that pur methods may change, but our objective n^ver will." PRESS ALSO BLAMED. Mr. Savage charged the Leader of the Opposition and his colleagues* backed up by thefr editorial supporters, with having done everything they could do to damage the Dominion's credit. "You can pick up any newspaper you like and look at the financial page any day," he said, "and you will not see a line that looks like helping New Zealand." Mr. Hamilton had said that the country faced serious commercial, financial, and industrial difficulties. He had also added that this was due to gross overspending and incompetent administration by the Government. But he did not say where. It was true that overseas prices had fallen and that unfavourable seasonal conditions had lessened the volume of primary production. For example, the fall in production for the year in dairy produce was estimated at about £2250,000 sterling. Mr. Hamilton could not blame the Government for that. There was more stability in the dairying industry than there had ever been, the fall in prices represented another £1,250,000 sterling. In New Zealand currency this all represented £4,250,000. OVERSEAS F"UNDS.. It was true that large sums had left New Zealand and much of the money had left about election time, Mr. Savage said.. "I wonder how that came about," he said. "I don't know if there was anything political about it or not, but it looks dangerously like it,"

! In May the Reserve Bank, had held £18,?50,QpG, but within a month Of the elections that had dropped to £11,500,000. That was not due to irn^ ports but to the friend? of the Oppose tion gathering up their bag and baggage when they saw that the Labour Government would be returned. The patriots who talked about love of country left that country because they were afraid for their pockets.

♦'The large sums of money which left New Zealand did not leave because of what the Government had done or w^ likely to do," he said, "but because of the advice of the lion, gentleman and his friends, The advice given didn't come from the Government, Jt came from the hon. gentleman and his Press friends." ] '

The Government hud been forced to import heavily because oj the policy of the previous Government, Mr. Savage added, but in the past capital goods for development had been paid for out of loan money. For the fourteen years from i 920 to 1933 New Zealand had borrowed at the rate of £5,000,000 a year, a tPtal of £73,000,000, and the annual interest charge increased by nearly 70 per cent. AH that borrowing had to be renewed during the next ten years. the Rt, Hon, J. G- Coates (National, Kaipara): You won't be here in ten years. What are you talking about? The Prime Minister: I'll say that for the good of the country: I hope the rt. Hon. gentleman will not be here, anyway.

New Zealand could not pay off her debts and buy goods from overseas at the same time, Mr. Savage continued, and consequently the Government had sent a man to London to try gnd make the best deal possible. The Government had told Britain that every shilling received from Britain would be spent in Britain. Nothing more could be done without borrowing. While the previous Governments had been borrowing at the rate of £5,000,000 a year the average rate of bankruptcy per year was 691, Of whom 164 were farmers, and during ten years the total bankrupts were 6914, of whom 1643 were farmers. In the three years the Labour Government had been ifi office the average had been 240, and

only an average of 29 farmers. Did that indicate that the farmers; were in a sound position before the Labour Government took over? If the members of the Opposition could read they would see that the party of New Zealand farmers that recently returned from Australia had said that the standard of living 011 farm? was much lower ■ there and they were glad to bp home. j That was supported by communications :he had received from responsible in- ! diyiduals in Australia, COMPANY PROFITS. I Mr- Savage said that company profits had been rising txnder the Labour Governrnqnt. This was an indication that the country was more prosperous than it had been. The increased profits came from increased turnover, which meant that the trading companies had been receiving more over the counter as a result of the increased, spending power given to the people by the Government. - There< was more prosperity as a result of the Government's policy, and even in New Zealand's best days; mpre men had been crying out forj work than there were today.

Though the Leader of the Opposition talked a great deal about reducing costs he wanted to forget the wagecutting policy enforced a few years ago. No one an hi? side of the House was prepared to say what should be cut today to reduce costs. While that wag so Mv, Hamilton was going up and down the country making the cry of "wojf." There was no wolf, said Mr. Savage. Mr. Hamilton should study the increased totalisator returns, the registration of radio sets and motorcars if he wished to determine the state of prosperity in New Zealand.

"All these increases are due to increased purchasing powcr s " continued the Prime Minister, . "But that i 3 not the whole story. We must have increased production as well. We cannot merely turn a handle to create wealth and forget all about production-"

The Rt. Hon. G, W. Forbes (National, Hurunui): Aren't you domg that now?

Mr. Savage: We certainly are not. But members of the Opposition seem to forget ti.at when production is increased purchasing power should be increased also. That applies in 1939 and we are going to try and make it apply in the future.

The Prime Minister added that thei Opposition was changing the Govern-! ment on two points. The first waS a charge that it had spent too much on buying overseas goods. The second was that it had Stopped spending too much in this fashion. CRYING "WOLF." For over three years the National Party and Hs supporters had been crying "wolf and .trying to belittle the country's credit, but they had not succeeded in New Zealand, said Mr, Savage, On hjs visits to factories and other places he* had found the people happier than ever before. - Factory production had been increasing all the time that Labour had been in office, New Zealand was on the right track 1 and was. not letting Britain down. "We have to expand New Zealand," declared Mr. Savage, "We must expand or die. J have said it to manufacturers and farmers and everybody within reach of my voice. We cannot stand still We must expand not only primary production but secondary production, but our first job is to bring about better balanced production, because otherwise we' cannot meet our overseas obligations and take our full requirements at the same time. Therefore w;?'have to produce njore of the consumable goods required from day j to.day in New Zealand."

There was nothing wrong with the Dominion's credit, Mr, Savage contended.

Mr. Coaies: W«aU if. beg your pardon! " - ■ . '

The Opposition had nothing else to export and therefore it was exporting the cry of "wolf," Mr, Savage continued. Opponents of the Government had their agpnts in newsprper offices in New Zealand telegraphing it tq the Old Country, and others in the Old Country were telegraphing it back..

Mr. C§ates; Youf wolfed the lot. ■ Mr Savetge; These are the gentlemen who are telling us' that- we are losing our good nam.e, Lei me remind the Leader of the Opposition that he and his friends fost their good name yesterday, and we have not lost purs today. The very fact that they were thrown out of office i§ sufficient evi.dence for me, and after being the Government foy three years, we came, back with a greater majority than any other Government has ever obtained in this country. So we are losing our good name? Well, there was not much of our good name left when; we came ijito pfftce, and if there was, | it was about the only thing that was [left.. [ PATRIOTISM? i The new member for Tauranga (Mr. F. W. 'Doidge) was reported to have I said, "New Zealand today is, in a state of liquidation. Our credit and our good name have been destroyed." [What sort- of patriotism was that? I asked Mr. Savage, He. did not think Ihe could do better than leave the |hon. member to the electors of Tauranga. ! "I wonder how many people there ! are in the starving condition hi which we found them," Mr. Savage con-; tinued. "I don't think there a*e any, I know there are many problems to be solved, and not the least is the housing problem. We have not scratched if yet, We have a lot to do and we are on the job."

Dealing with the Post Office Savings Bank deposits, Mr. Savage said that the figures had been quoted against the Government, but there were more deposits than at any time before Labpur took office. For the first time withdrawals exceeded deposits during the current year, but with one except tion that had been the case every year between 1922 and 1933.

Factory production had increased from"£lß,6oo,oQ6 in 1934 to £30,000.000 in 1938, and this year's, figures would show yet another increase,' all because of the Government's policy of provid-r ing purchasing power. That had a direct effect on imports. Examining that aspect, they fqund that imports, were well within exports and that over three years of Labour's rule they had a favourable balance of £26,000.000. About £7,000,000 a year was needed to pay overseas interest on Government and local body debt In three years this would be £22,500,000.

i "This means," said Mr. Savage, "that in the three years prior to the incep-» tion of the policy of exchange control and import selection, New Zealand exported more enough to pay the interest on all forms of public debt and to pay for all her imports. It was no fault of the Government, then, nor of its monetary policy, that our sterling funds were depleted. Certainly the Government paid off about £4,500.000* of debt in 1936. But the real cause of the depletion was the raid made pn pur reserves by the owners of capital. Speculators and financial manipulators are mainly to blame for the shortage of sterling. If this Government is to go down, it will go down fighting for the people's right to govern, and when we have to be dictated to by financial interests, we will have another look at ourselves."

Mr. Savage quoted many figures to show the state of prosperity in the home, in industry, and on the land, and asked how many companies had gone into liquidation under the Labour Government.

The debate was adjourned at 9.54 p.m. until 2.30 p.m. today.