FOUNDATION OF PROSPERITY

Evening Star, Issue 21662, 6 March 1934, Page 5

FOUNDATION OF PROSPERITY

PRICE GUARANTEES LABOUR LEADER'S TOUR [Per United Press Association.] ASHBURTON, March 5. The Leader of the Opposition (Mr M. J. Savage) opened his South Island campaign to-night, addressing a large meeting, over which the Mayor (Mr Woods) presided. Mr Savage said it appeared that • the breakdown of the parliamentary system was due to the control being vested in those with large private interests to serve rather than the common good. Unless incomes were sufficient to allow the purchase of imports as well as domestic goods and services, periods of industrial stagnation were inevitable.. The present monetary system was largely based on external prices and conditions and should be transformed into one having for its foundation goods and services produced in the dominion. The world conditions made a national planning of production and distribution neces-, sary if national solvency and the welfare of the people were to he considered. Wages and the benefits of machine and scientific processes must be available in the form of purchasing power. shorter hours of labour, national health services and universal superannuation at the retiring age or invalidity, prices for all forms of production and the purchasing power of people being interdependent. Guaranteed prices for goods and serviced were the only logical solution of poverty amidst plenty. Referring to the exchange rate, Mr Savage said it would have been more equitable to grant a straightont subsidy on exports payable to relieve the struggling farmers according to the circumstances. An increase in the exchange always "gave temporary assistance in the greatest measure to those with the largest turnover, who probably needed it least. It could'not be graded. On the other hand a straightout subsidy could be graded according to circumstances. Attempts had been made to make people, believe that the raising of the exchange rate would have the effect of increasing the national income, when as a matter of fact it did not increase the aggregate amount of -the national income, hut merely transferred part of the national income from some pockets into others. The. only redeeming feature about the exchange transaction was that it was an admission that the external prices were ■ not sufficient to maintain the primary industries in the dominion-and was a substantial argument in favour of the Labour policy of guaranteed prices over the whole field of production.