THE PRACTICAL TEST

Evening Post, Volume CXXXI, Issue 31, 6 February 1941, Page 8

THE PRACTICAL TEST

"Much has been said and written on living standards, but the general public are now beginning to realise that money, itself, does not mean goods and has no value in itself," said Mr. S. G. Holland, Leader of the Opposition, in a speech at Palmerston North last night. Mr. Holland was emphasising that the standard of living could be maintained only by production, through work, "and no manipulation of the monetary system will lessen the amount of labour required to produce goods." Obviously, he said, if we took some 40,000 to 50,000 men out of produc- j tion, then we could not expect to have the same amount of goods available for use and consumption. The obvious course was to work longer and produce more. In theory, the same opinions are held by the Government, or by some members of it. "The real cost of the war," said Mr. .Nash at Dunedin, "is not money, but goods, services, and men, and those who talk about the clever manipulation of money have not thought things out. . . . There are 56,000 men out of production, and those who are"" left behind have got to work harder if the economy of the country as it is today is to be carried on." ' The weakness of the Government is that it says these things but in practice falls far short of doing them. The last Budget submitted by Mr. Nash was a sound exposition of financial theory as applied to war conditions,- but the financial proposals, so far from applying that theory, continued the old spending, credit-issu-ing, high-taxing, and borrowing policy. In the same speech in which he criticised talk about the 'clever manipulation of money the Minister of Finance announced that Government borrowing for the year to March 31 next was £19,037,000, of which only £7,090,000 was war expenses. Over £4,000,000 had been obtained from the Reserve Bank. Clearly the Government is not sticking to its own theories. Or is it that Mr. Nash states the theory and the ruling caucus' decides the practice? We were told that caucus did not agree with much of what Mr. Lefeaux, as Governor of the Reserve Bank, said to it., Why not let the public know what Mr.j Lefeaux said so that they may judge for themselves whether the Government is following a sound monetary practice? There is a similar divergence between the theory and practice of the Government regarding work and production. The theory is that, because 56,000 men are out of production, those left must work harder. The reduction of hours to 40 a week for all award workers has a similar effect on production. Withdrawal of all workers from production for part^ of the time means the same as withdrawal of some of the workers for all the time. But in fecc of this, in face of the loss of 56,000 producers, and in face of the admission that those left behind have to work harder if the economy of the country is to »be- carried on, the Government still maintains the 40-hour week for all except a small minority of worker?.