The Evening Star FRIDAY, OCTOBER 28, 1938. “KILLING THE GOOSE.”

Evening Star, Issue 23100, 28 October 1938, Page 8

The Evening Star FRIDAY, OCTOBER 28, 1938. “KILLING THE GOOSE.”

It would well repay every person in the Dominion to read with care, whatever his political predilections, the presidential address by Mr A. C. Mitchell at the annual meeting in Wellington of the New Zealand Employers’ Federation. His speech was lucid and well reasoned. Free from party bias, it described in concrete form the economic dangers that confront the Dominion. That they are (real dangers cannot be doubted. In concluding his remarks Mr Mitchell made the arresting statement that industry in this country to-day is rapidly reaching the stage where the old story of “ the killing of the goose that laid the golden eggs ” may have special significance.' An ominous development mentioned by the speaker is that the comparative Customs figures for the seven months ended July last showed that the excess of exports over imports hpid contracted from £16,354,000 in 1937 to £9,370,000 in 1938. This is not cheerful reading, for if our funds in London continue to drop this country will soon be in financial difficulties. The reason for the steady reduction is not far to seek. Costs of production in the secondary industries are now so high that a great stimulus is given to the import trade. The cumulative effect will be that there must be substantial reductions in the numbers employed in our factories. In the face of these conditions any drop in the prices received for our goods overseas must further accentuate the unfavourable position. Already we begin to see how futile is the talk of the Prime Minister of insulating New Zealand in the economic sense.

There is one big bill that has to be paid each year by New Zealand, and that is the interest on loans advanced to us by Britain for the development of this country. Whatever happens that ’must be met. Mr Savage and Mr Nash have both said so, emphatically. The Minister of Finance remarked that it had been stated by the Opposition that there was some doubt about the Government’s intention to repay funds borrowed if times of hardship came. That, he declared, was a libel on the

Government. If hardship unfortunately came the Government’s first charge would be the repayment of money it had borrowed from other people. The total debt service requires about £lO,000,000 annually. Balances are built up in London chiefly by the sale- of our produce, and, among other things, calls on the funds arise from importers to finance purchases of the goods they import from Great Britain. If the funds continue to bo depleted a difficult financial problem will inevitably arise. In the recent election campaign the people failed to take the long view, preferring, as Mr Mitchell said, to endorse a policy which appears to offer the maximum immediate reward. The taxation on private enterprise is now crushing, and in the present prosperous times it provides to a large extent the Government with the sinews of war. If companies should collapse under the burden Ministers have announced that they will conduct industries under the authority of the State. Such a practice, of course, would soon lower the revenue from taxation and add to the country’s embarrassments.

In this connection Mr Mitchell utters a note of warning. The majority of the voters evidently are building their hopes on the social security scheme, and he points out that if the taxpayer is unable to provide the money to finance it the scheme must crash. Not only that, but all superannuation and pension schemes, public and private, will be placed in jeopardy'. Looking at the position from every angle, it is clear that the Government’s failure to recognise that the country’s well-being is wrapped up in the prosecution under private enterprise of our primary and secondary industries is bound sooner or later to have unpleasant consequences