LABOUR’S FAILURE

Evening Star, Issue 22953, 10 May 1938, Page 15

LABOUR’S FAILURE

MR HAMILTON DRAWS UP INDICTMENT TAXATION UP £10.000,000 THAT SPENDING FALLACY [Peb United Phess Association.] WELLINGTON, May 9. Criticism of almost every aspect of the Government’s policy, as demonstrated by its administration during the past two years and a-half, and a comparison with the objects of the National Party formed the theme ot the address given by the Leader of the Opposition (Mr A. Hamilton) in the St. Francis Hall to-night. Mr Hamilton replied to points raised by the Prime Minister (Mr M. J. Savage) during his speech some weeks ago in the Wellington Town Hall, and specifically challenged Mr Savage’s statement that the operations during the last financial year would result in a reduction in the National Debt. Mr Hamilton said that Labour had been returned to office at the last election at a time when the world-wide depression was past. Prosperity had returned: export prices of farm produce had risen 20 per cent.; the money at credit of depositors in the Post Office Savings Bank of over £51,000,000 constituted a record in the history of the Post Office. The amount to the credit of depositors with; trustee sayings Banks of over £11,000,000 was also a record for. these banks., Practically every department of State was m credit, interest rates were the lowest on record for New Zealand, two restorations of wages and salary cuts had been made, all reductions in old age pensions had been, restored, and pensions were at the highest level on record. A Reserve Bank had been established for the control of currency and credit, the Budget was. balanced and the stage set to obtain the full benefits of returning prosperity. Such was the position when Labour became the Government. World conditions had since improved, and overseas prices for our exports had increased, largely owing to Britain’s expenditure on rearmament. Such facts had made.the lot.of the Government incomparably easier than the task of the previous Government, which had to adjust conditions to the low prices obtained during the depression years. THE NATIONAL DEBT.

“We were all- pleased to hear the Prime Minister say that there would be a. substantial surplus at the end of last financial year,” Mr Hamilton added; “but I. for one, was sceptical when he also stated that the National Debt would be less than it was at the beginning of the year. I am going to take a . risk and issue a challenge to the Prime Minister. I challenge the accuracy, of his statement, which was very emphatic—that the National Debt will be less than it was at the beginning of the year. The previous year over £5,000,000 was added by. this Government to the National Debt. For the year under discussion, the Government took authority last session to borrow many millions, and I shall be surprised if It does not do the same this coining session. The public should have the fullest information, and I leave it to the Prime Minister to say whether my challenge is right or wrong.” UNEMPLOYMENT POSITION. Mr Hamilton quoted the Prime Minister as having stated that the registered number of unemployed in March, 1936, was 54,500, while in March, 1938, it was 6695. Added to that, Mr Savage had said it was necessary to take into account 8000 men totally unfit for work of any description that were fed by the hospital boards before Labour came into power. The figures had dropped from 54,000 odd to something under 15,000, including the men not fit for any employment at all. Then there were 20,000 men on public works, compared with 8773 in 1933. Of the 54,500 stated by Mr Savage as being unemployed, no fewer than 22,510 had not been unemEloyed at all, Mr Hamilton said, but ad been in full-time employment in industry and not registered as unemployed. It was difficult to believe that such an important omission could be accidental. - , Mr Savage would have the people believe that there were only 6695 unemployed In New Zealand to-day, Mr Hamilton said, but on the last occasion when the full figures were shown —in the Abstract of Statistics of December 22, 1937—it had been disclosed that 38,450 persons were receiving payment from the Unemployment Fund, and of these 18,110 were receiving sustenance without doing a hand’s turn. In addition to all this, the Public Works had —in these times of great prosperity and high prices—a record number of employees, totalling, according to the latest official statement, 20,205, while there were 10,000 more in the various Government departments than when Labour came into office. If unemployment was so slight to-day, why was it necessary to extract over £5,000,000 from the wages and incomes of the people to relieve a problem which, according to the Prime Minister, had already been solved. x „ Why did the Prime Minister not tell the people frankly where the £5,000,000 odd of unemployment tax was being spent? To say that it was being, spent on fewer than 15,000 people was ridiculous. That would work out at over £3OO per year for each unemployed person.

GUARANTEED PRICES ILLUSION. “Regarding guaranteed prices, the Prime Minister has said that the Labour Government has given security and stability to the farmers by introducing guaranteed prices and by giving them a more substantial income,’ Mr Hamilton said. “This statement shows the Prime Minister to be absolutely ignorant of the dairying industry. Such a statement sounds very well, and that is what it was meant for, but it is absolutely incorrect. The guaranteed price brought neither security nor stability to the dairying industry, and the guaranteed price does not mean a more substantial income to the dairy farmer. The Prime Minister says the farmers of New Zealand are in a better position to-day than they have ever been previously in the history of the country. It is obvious that Mr Savage has not spent much time in the country districts during the last two years and a-half. The farmers have been hoodwinked and hamstrung by this Government, and they do not hesitate to say so. “The dairy farmers have their socalled guaranteed price.’’ Mr Hamilton added. “ The price is fixed for a whole season in advance, but has any attempt been made to fix costs? The farmers know the answer to that. They know that, since 1935. their costs of production have risen out of all recognition, and they know, too, that whereas good prices have been made possible only by market conditions overseas, increased costs have been brought about as a direct result of the Government’s policy. What, then, is the correct position? Take the farmers supplying cheese factories. Last season they received £12.000 less for their cheese than the Government got for it in London, and they had to bear as an addition all the extra costs loaded on

to the industry and the higher prices for their requirements. Last year those supplying butter factories got about an extra Id per lb over the London price. Under no stretch of imagination would this be anything like sufficient to meet the added costs loaded on the butter producers. Remember also that last year’s dairy account stood on its own, and there is still a debit of £338,000 standing against that account. “It is correct to say that the dairy farmers, under this year’s guaranteed price, are receiving substantially less than the market price of their butter,’’ Mr Hamilton said. “A reasonable estimate of the market price above the guaranteed price would be about 14d per lb butter-fat, or an estimated surplus for the year of over £1,850,000 for butter exported. That is what the Prime Minister calls security and stability. Note that he did not use the word ‘justice’ as applied to the guaranteed price. Note, also, that the dairy farmers have no legal claim to the surplus. They are in the hands of the Minister and at his mercy. No doubt, as this is election year, tne Government will make a further payment later on, but the farmers have no legal claim to a penny of it. In addition, the butter sold on the local market is being sold at a loss to the dairy farmers of about lid per Lb butter-fat, and that amount, which can never be recovered, will amount, over the .whole year, to about another £400,000. It is reasonable to estimate that dairy farmers supplying butter factories —unless a bonus is paid above the guaranteed price—will be getting about £2,250,000 less than the market price for their butter.” It was this ridiculous position experienced to-day under the Labour Government’s policy that had stirred farmers to demand what they call “compensated prices,” Mr Hamilton said. The principle underlying comEensated prices was that farmers, who ad to sell their products against the competition of the world, claimed a comparative reward for their labour and capital with the rest of the community. It meant that internal' costs should not be allowed to rise any higher than a just comparison with export prices. A good example of the principle was seen from the increased costs loaded on the manufacturing industries by the Government. Costs were pushed so high, by increased wages and shorter hours, that there was no chance of competing against imported goods. They sought, and received, compensation through increased tariff.

That was perhaps the most serious political problem facing New Zealand. It should not be difficult to see how the farmers, who had to sell against the competition of the world, might easily be forced to accept a lower standard of reward than other sections. Compensated prices meant keeping the right balance between export prices and internal costs. To put it another way, it meant giving attention to farmers’ costs as well as to the price of their product. It meant, further, that standards of rewards for other sections of the community should not be allowed to rise out of comparison with farmers’ standards. This Government was making it exceedingly difficult for farmers generally. All the farmer wanted, and was entitled to, was economic justice, but in the circumstances existing to-day women and child labour was being forced into the cow sheds as never before. UNFAIR TACTICS. " The Prime Minister never ceases to accuse his opponents of misrepresentation,” Mr Hamilton said. “ but the following example will show the length he hitnself will go to try and put his opponent off-side. He stated, in the course of his recent speech, that during the first two years of my period as Postmaster-general the number of depositors in the Post Office Savings Bank dropped by 81,000. My reply to this is that, in actual fact, the number of accounts did not drop at all! The Prime Minister was here guilty of one of the most unfair forms of misrepresentation. It has often been stated that half a truth is the worst form of a falsehood, but the Prime Minister’s statement here is scarcely half a truth. What happened was that the law was amended in 1932 to transfer 80,000 4 dead ’ accounts from the Post Office into the Consolidated Fund. These ‘ dead ’ accounts, with average deposits of under £l, represented accounts that had not been operated on for 25 years, and were treated as unclaimed money. The Prime Minister is hard up indeed for arguments when he adopts such tactics. As a matter of fact, it would be correct to say from the nearest figures available that deposits were greater by over £8,600,000 during my last year of office compared with my first year. How can we excuse a Prime Minister who so grossly misrepresents his opponent? STABLE AS CARD HOUSE.

Dealing with the women’s view of the present situation, Mr Hamilton said the Prime Minister had made a great parade of statistics, even totalisator statistics, in his endeavour to prove that prosperity was here, and had pome to stay, but two or three housewives could show him in a few minutes that his arguments were just about as stable as a house of cards. Mr Savage, of course, could not be expected to know much about household budgets, but any man who made his wife a liberal housekeeping allowance would tell him that hardly a month went by without his wife coming to him and saying that extra money was needed to square the household accounts. Women, as a rule, took a pride in managing their household finances, and if they budgeted for a slight surplus every month—or every week—what husband would blame them? But to-day, in spite of all their skill, their budgets almost invariably showed a deficit, and one of their greatest triumphs is denied them. The increase in the cost of living had more than cancelled out all the advantages which Labour claimed it had given to the people. “ The housewife sees, too, that prices will continue to rise,’ Mr Hamilton added. “On every hand she hears that labour conditions are forcing up prices, and that increased tariff protection is required for locally made goods. Undei such conditions the rise in the cost of living cannot be checked, and the purchase of the new hat out of surpluses from the household budget must be indefinitely .postponed.

“A case arose in Auckland recently which demonstrates how the womenfolk have learned to fear Labour rule. A woman, rummaging through some old household accounts, found a grocer’s receipt dated February, 1936, for goods of a total cost of 11s 2d. She took the receipt with her, went to the same grocery store and ordered the same goods in the same quantity. The cost was 15s 4d. I do not think any further comment is needed.” PLANS FOR SOCIALISATION. Emphasising the differences between the policy of the Government and that of the National Party, Mr Hamilton said the Government stood for State ownership of all property, while the National Party stood for the right of citizens to get a satisfactory lease, or own the freehold of their property. The first plank of the Labour Party’s policy was the Socialisation of the means of production, distribution and exchange. In plain language, that meant the public ownership of all three, and it meant the elimination of the right of anyone to own private property of any kind. That was the Labour Government’s objective, and its legislation was being shaped with that end in view. “ The Prime Minister told us that the Government had no intention of Socialising the farms,” Mr Hamilton added. “Within a couple of days ho was flatly contradicted by the Minister of Lands, Mr Langstone. In an address to the Labour Party Conference,

Mr Langstone proclaimed that it is still the Government’s policy to wipe out the freehold tenure of land. Large blocks are to be taken over by the Government, developed by the Lands Department, and then farmed by men who will be paid as employees of the State. No body of farmers can have any faith in a Government whicn adopts such a policy. We know that Labour aims at the socialisation of the means of production, blit to the farmer the land is everything. It is his livelihood and his title to it is the measure of his independence and his self-re-spect. The National Party will uphold the rights of the farmer and townspeople to the ownership of their own land. The State to-day will ■ not even sell any of the houses it is building, the policy being to eliminate all private interest in any property. On the other hand, we stand for the right of any person' to own the freehold of his own home, or his own farm, or his own business.” INTERFERENCE IN BUSINESS. The Government stood for the extension of the State in business, while the National Party would encourage and foster private enterprise, Mr Hamilton said. There were services in the community that it was wise for the State to own and control, such as the Post Office, but from the success of the Post Office, the Government argued that the State in business should be extended until it absorbed all industries and all services. The Government was, therefore, setting out to get control of all sorts of businesses. It had established a Housing Department of State to build houses against private enterprise; it was gobbling up private transport services all over New Zealand; it had taken authority to establish a steel and iron industry at an estimated cost of £5,000,000; it had placed £92,000 on last year’s Estimates to establish and operate State sawmills. Already ,at least one mill had been erected. Regulation, domination, and inspection of private businesses were the order of the day, and the Government’s objective was to make it impossible for private enterprise to carry on!

The National Party held that it was the State’s function to lay down the rules, in the public interest, by which business should be conducted, and then, so long as business people obeyed the rules, the State should not only keep out of the business, but also exercise the minimum interference. Private enterprise had developed New Zealand, and was capable of giving a better service and greater freedom to the community than the State in business could ever give. “They stand for mass psychology,” Mr Hamilton said. “We emphasise individuality. The, Prime Minister’s speech was ,a typical example of Labour’s method of appeal to mass psychology. Their policy is to encourage and develop this mass-mind psychology, even to the point of coercing the minorities into submission. They would crush individual initiative until men and women became only cogs in the great State machine. Compulsory unionism is a typical example. We stand for the wisdom of democracy and majority rule in the sphere of politics. This does not mean that majority rule shall control and dominate all branches of social and private life. Minorities have rights that must be sacredly safeguarded. For example, the majority has no right—in our opinion—to dictate what church we shall attend. When the mass-mind psychology dominates society the rights of the individual become very circumscribed. THRIFT DISCOURAGED. “ The Government emphasises and encourages spending,” Mr Hamilton continued. “We encourage private thrift. Mr Savage is constantly harping on his theory that spending is', better than saving. Here, again, we see the encroachment by the State in its endeavour to get savings away from private people into the hands of the State. Private savings are to be discouraged. The Government superannuation proposal, which withholds any benefit from those with reasonable private savings, is a typical example of the Government’s plan to discourage private thrift. Everything must belong to the State. Electors must realise that these proposals are not accidental: they are designed to fit in with the Government’s ultimate objective. In the eyes of this Government, private saving is the beginning of capitalism. The moment a person has any savings laid by, he is a capitalist even in a small way. And to the Labour administrators the capitalist and the capitalist system are anathema, “It is here also that the payment of interest for money begins, and to them the payment of interest for money is also anathema. It is not difficult, therefore, to understand why they are against private thrift. They even go so far as to say that private savings are a curse in the community. The Prime Minister would have us believe that every person who is thrifty freezes his savings, or that he buries them in a tin in the back yard. He, of course, does nothing of the sort. He deposits those savings, or that share of his income that he can do without in the meantime, with the Post Office or other savings bank. The falsity of this is readily seen when we realise that savings in the banks are' being continuously used. “ The Labour people are certainly good spenders. In their two years of office taxation is up by over £10,000.000. The necessary funds to carry the Government on for one year have been increased during Labour’s two years from under £31,000,000 to £54,000,000 —an increase of over £23,000.000 annually since the Labour Government came into office. They hold that prosperity is caused by spending. They know, in a democratic country, that spending is popular. One is sometimes forced to conclude that their objective is to tax, borrow and spend until our system breaks down. Would not most of them be happy if there were a collapse of our system? I have said before, and I say again, that thrift is one of the very cornerstones of this country’s whole economy and her prosperity. The thrift and the initiative of our pioneers have made this country what it is to-day. New Zealanders are by nature a thrifty people, but under this Government work and thrift are at a discount, while spending and idleness are at a preThe Government contended that New Zealand’s past had been a failure, Mr Hamilton said, but.the National Party held that New Zealand’s past had been a huge success. It would probably be too much to say that all that had been done in the past had been right, but it was correct to say that the pioneers and past legislators, pursuing a sound, progressive course, had brought New Zealand through until the present generation had enjoyed the best standard of living of any people in the world. Labour people had called him “the man with an umbrella.' If that meant that he moved with care regarding the future he made no apology. He would prefer to be out with an umbrella and with his feet on the ground than—like the Prime Minister —up in a balloon on the road to the moon, with the sky the limit. It was easy to scoff at the old-fashioned systems of the past, but successful experience of the past was a wiser guide than the experimental recklessness of the present Government. INSULATION IMPOSSIBLE The Government claims thta it can Insulate New Zealand against the consequences of a world fall in prices," Mr Hamilton said. " We hold that New Zealand’s economic conditions are largely affected bv our export prices. New Zealand taxpayers have now to note that the annual public commitments have been increased by this Government by something in the

vicinity of £10,000,000. It is easy to increase expenditure when revenue is buoyant, but it is not so easy to reduce if revenue falls. The Minister of Finance, when asked how he would meet the increased expenditure if his revenue fell, stated that he would insulate New Zealand against any adverse effect. The Deputy Leader of the Government. Mr P. Fraser being a careful Scotsman, when asked what he would do if the export income fell by, say, £20,000,000, replied that he was not prepared to say offhand what he would do. “We say that the increased public commitments piled up by this Government, constitute one of the greatest problems for the future. We say that it is wise to keep our internal price level and costs from rising so high as to throw both our primary and manufacturing industries into difficulty, it is wise to keep our costs on a reasonably competitive basis with Britain and Australia. If our costs level becomes artificially high, then some section of our people must suffer. Again, I would say that the high costs policy of this Government is designed to embarrass the industries affected so that they will fall into the hands of the Government. As far as insulating New Zealand against the effects of a general fall in export prices. We say this is not possible without causing a corresponding evil to some section of our people. In my opinion, those who will suffer under Labour’s policy, if prices fall, are those whose assets are in the form of savings, as distinct from property.” COMPULSORY UNIONISM MUST

Dealing with the position of workers, Mr Hamilton said Labour’s approach to the industrial problem was that a man worked because he had the right to work, not because an employer had need of his services. As usual, Labour saw only one side of the question. The National Party admitted that the worker had his rights, but so had the employer, and it was only when it was recognised that those rights were interdependent that there would be industrial stability. It was senseless to think that industry would thrive if workers were instructed to ask for the highest possible return in wages for the lowest possible return of work. Yet, that was what the Government, and many of the trades unions, were doing to-day. “We want a changed outlook in the Industrial sphere,” Mr Hamilton said. “We do not want the outlook of the selfish worker, nor do we want the outlook of the grasping employer. We want the outlook of the craftsman who takes a pride in his work, who has a sense of dignity of labour, and who is prepared to earn the money he receives, knowing that he has a stake in industry and a responsibility toward it. We want the outlook of the employer who provides all the facilities for efficient production, and who is prepared to pay for efficiency and willing service, knowing that contented workmen strengthen his business and make for industrial development. The Prime Minister says the National Party will destroy the Arbitration Court and smash the 40-hour week. When Mr Savage made that statement he knew he was saying something that was not true! I say again that compulsory arbitration will be retained, and the matter of hours, wages, and conditions in industry will be left to a free, unfettered, and uninstructed Arbitration Court. While I am on the subject, I might say once more that compulsory unionism will go.” POINTS OF POLICY. In conclusion, Mr Hamilton enumerated 12 points which, he said, would show where the National Party stood. He stated these as follows: “We will govern in the interests of the people as a whole, and not for sections or classes. “We will co-operate and collaborate with Great Britain to the fullest extent. Britain is our best friend.

“ We will encourage and protect private enterprise, and preserve the right to private ownership of homes and property. “We will take a special interest in the small shopkeeper, the small farmer, and the small trader. “We will encourage'and assist the subdivision of classified farm lands, to enable farmers’, sons, farm workers, and other qualified persons to obtain suitable farms. “We will see that our great manufacturing industries are encouraged. We understand their problems, and we will help them to solve them. “We will establish a new Ministry of Social Welfare which will be specially charged with the responsibility of co-operating with those splendid voluntary organisations, having for their objective the interests of women and children, and the social and economic welfare of the youth of the community. “There are many organisations today doing magnificent work for the community, but they have no official contact with the Government, and the new Ministry will provide that longfelt need, “We will cut out all extravagance in Government expenditure. We will extract the smallest amount of taxation necessary to carry out the functions of government efficiently and economically, and we will abolish the unemployment tax on women. “We will take such action as will assure to the farmer a just and comparative standard of reward, compared with other sections of the community “ We will leave the question of hours and wages in industry to an entirely free, non-political and unfettered Arbitration Court. Compulsory arbitration will be retained. Compulsory unionism will be wiped off the Statute Book. Pensions will not be cut. Civil Service salaries will not be cut. “We will see that homes are provided for the people. We will encourage building societies. We will give people the right to own their own homes. We will curtail restrictions on the right of access to people’s own property. “We will provide more adequately for the defence of our country, and work in close co-operation with Great Britain.” | MOTION OF CONFIDENCE. At the close of Mr Hamilton’s address Mr Cheviot Bell moved “That this meeting desires to express its appreciation and thanks to Mr Hamilton for his speech, to assure him of the loyal support and confidence of all the men and women in this country opposed to Socialism, and to convey to him our conviction that he is destined to rank among the great leaders in New Zealand political life.” The motion was received with prolonged applause.