ON WRONG LINES

Evening Post, Volume CXXVIII, Issue 12, 14 July 1939, Page 6

ON WRONG LINES

DOMINION'S ECONOMY

Government speakers who claimed that the policy of increasing spending \ oower put into operation by President j ( Roosevelt in the United States was in :, line with the policy of the New Zea- , land . Government overlooked the fact . that there was a big difference in the basis of the economies of the two countries, said Mr, A. N. Grigg (National. Mid-Canterbury). The mover of the Address-in-Reply motion was one who had made this contention. In doing, so he had.shown, no appreciation of the fact that" America's economy was based on the -sale of manufactured goods, while New Zealand's was founded on the sale of primary produce. Provided-the ,purchasing power of-! the people of the United States was built up to. the maximum; that could. be supported ,_by the manufacturing in- \ dustries. President Roosevelt Would be : on sound lines. Similarly, if the pur-}! chasing power of the people of New j, Zealand had been moulded to conform.'! to the New Zealand economy and kept ■ at a level that could be supported by ; the primary industries, the Govern- , ment would have been on perfectly ; sound and safe lines. Unfortunately , that was not the case. \ LESSON FROM AMERICA. } Mr. Grigg said that Labour in New ; Zealand could learn something from Labour in America. He recalled that the American Federation of Labour had -appealed to the Government to have the undivided profits tax and the capital gains tax removed. By that action the leaders of Labour in the United States had shown themselves wise enough to understand that taxation could crush industry. destroy sources of employment, and create economic instability. . Remarking that it was not only business that had suffered under the Gov i eminent in New Zealand. but the farmer as well. Mr. Grigg said it was a great mistake to employ casual hands |on public works at wages rates that I were more attractive, than those which Uhe farmer could afford to pay. As a result of this policy, musterers. ; ! shearers stackers, and tractor drivers j ihad been lost to New Zealand's primary I 'industry. Although the Minister of Labour and. the Minister of Public. S Works were sympathetic towards the j farmer, it ' was now too ■ late. The j | damage had been done, and it would! take years- to- train men to . replace those who had gone. In addition to ithe loss of skilled labour, the farmer had to meet rising costs. GUARANTEE FOR WOOL. The Government's idea was that the cure for all these problems was a guaranteed p ice for wool. That was not the sheep farmer's way of looking at [things, said Mr. Grigg. He had still ito be convinced that he should receive more for his wool than it was actually worth. He had seen the effect of the guaranteed price for dairy proi'duce, and could see. too, that the Government had bitten off more than it could chew To maintain a guaranteed ( price for wool the Government would have to give a subsidy of £5.000.000 a year. This would have to be supported by the taxpayer. ' It could not be claimed that the1' sheep farmer was opposed to a guaranteed price for political reasons. ft ' was not reasonable to suggest that. | he would turn down his livelihood i merely, because he did not. like the politics of the party that was oiler in sj him a guaranteed price. The sheep < ' farmer realised that the country could : not guarantee itself more than the real value of its total produce. That was i his reason for refusing j •