STILL THE TIGHT REIN

Evening Star, Issue 21231, 12 October 1932, Page 3

STILL THE TIGHT REIN

THE DIFFICULTIES AHEAD MR ANSELL ON ECONOMY AND CURRENCY [From Our Parmamzxtary Becortkr. ] \V FLLING'J ON, October 11. J hat New Zealand Jins still to face rigid economy was a point strongly made by Mr Ansell in the course of his Financial Debate speech in the House yesterday. He pointed out that while the anticipated Budget deficit had been lowered to one million, that result had been attained by the use of reserves and petrol tax proceeds, and through tlie generosity of the British Government, ft had to be remembered, therefore, that the relief was temporary, and the need for rigid scrutiny of expenditure and economic administration still remained. , The greatest care had to be exercised in all matters for the next few years. With reduced national income there must be reduced national expenditure—otherwise there would be msinl voiifv

It Parliament had listened to the Labour Party in its protest against curtailing expenditure, the country would not have been able to meet its liabilities to-day. Jt had to bo borne in mind, also, that next year there would be no accumulated surpluses, that income tax would be paid on slump incomes, and that Customs revenue might be lowered as a result of the operation of the Ottawa Agreement. The country would be forced accordingly to keep a tight rein on its expenditure. Dealing with the question of currency reform. Mr Ansell said that, while agreeing that something more than the existing position provided was necessary in the way of credit, he did not support those who urged that New Zealand itself should undertake currency reform independently of the Empire or other countries. For the scheme to be succcossfnl it must have a much wider basis than was possible in New Zealand. He asked those who advocated such a plan: “How will our primary producers fare? ” If it were proposed to increase the purchasing power of the people in the dominion, higher wages would bo payable, and higher wages would raise the costs of production. As the primary producer had to accept world parity for their products, would they not be in worse position than they were to-day? So tar lie had not received a .satisfactory answer to that query. Currency reform, lie believed, had to be effected, but there were manv difficulties in the way, and it was hoped that something practical would result from the world economic conference in the near future.