TEST OF WAR

Evening Star, Issue 23861, 16 April 1941, Page 4

TEST OF WAR

SEVERE STRAIN ON DOMINION ECONOMY HARDER DAYS AHEAP fPr-K United I’iiess Association.) WFLLINGTON, April JA. “The bus.s of our social and economic sti netuie and pi ogress is likely to be severely tested in me days tunac lie nliead, but 1 am sure tiiat the people of New Zealand aie willing and, indeed, anxious to make all necessary sacrifices now in tiie sure knowledge tiiat wlien wo are victorious stal higher standards of living uui, and 'must, be achieved,' 1 declared the Prime .Minister (Mr Fraser), addressing the annual conference of the New Zealand Labour Party to-day. After painting a picture of what would happen if the Nazis won Mr Prater pointed out that the danger from within might not be so fully realised. If through unwillingness to face facts and make all the necessary sacrifices there were some who threatened the unity of thought and action upon which the Labour jdovement must be based, then., inevitably, the Labour Government would forfeit the confidence of the people as a whol'e and be defeated and the Labout Movement would be set hack many years. He emphasised as a first duty the bending of every endeavour towards prosecuting the war to a successful conclusion. Pointing out that the successful prosecution of the war' must necessitate the adoption by the Government of a comprehensive economic policy, Mr Fraser outlined the basis of the present policy, which, ho said, was as follows : 1. The paramount necessity of meeting war needs in men. materials and financial resources. 2. The need to keep the everyday economic life of the community functioning and so carry the burden of the war. 3. The need, after meeting these demands, which inevitably involved sacrifices from all, to maintain living standards above a reasonable minimum. DANGER OF INFLATION. Mr Fraser'said the Government was determined to avoid inflation as far as possible, and so far it had succeeded in avoiding this danger. The skyrocketing of prices, an infallible symptom of the disease, was in no way apparent. The note issue in New Zealand and cheque transactions did not show an abnormal position, hut this required careful watching, and the banking figures reflected normal seasonal trends. Mr Fraser also referred to the steps that had been taken by the Government to achieve national unity in the conduct of the war, and spoke of the formation of the War Council and the establishment of- the War Cabinet. Those arrangements, he said, had worked most satisfactorily and efficiently. SUPPORT FOR MEN OVERSEAS. Speaking of the. New Zealand forces overseas, Mr Fraser said the hopes and thoughts of all were with them to-day, but hopes and prayers were not enough. They could support their troops best by working harder'and by saving more for war purposes. New Zealanders at Home fully realised that the sacrifices that so many of those men would make were infinitely greater than the efforts called for from individuals hero. Indeed, wholehearted support was being accorded by civilian workers, both men and women. Mr Fraser also stressed the necessity for the most careful husbanding of the country’s sterling resources. It had been the Government’s policy, he said, to ship as much as possible and to spend as little as possible of the country’s overseas funds, but even with further cuts in imports, which were practically confined to essentials already the ■ export income was clearly likely to be so reduced as to affect the country’s trade and economic position in a serious manner. RESTRICTION OF TRADE. After speaking of the restriction of the Dominion’s exports to Britain through the shortage of shipping, Mr Fraser said that the results of such a reduction were far-reaching and would affect in the long run every section of the community. Ah eady the restriction of imports had affected the consumer and the business man. A further reduction in the imports of consumer goods must be expected, and to the extent that these could not be replaced by local manufacturers the people must do without. . The manufacturing industries were doing their utmost to supply the deficiencies, but hero again essential raw materials wore frequently not procurable, and there were limit's to the capacity of the country’s small and comparatively new factories to produce new lines of goods. Moreover, the possibility of making goods available for the public- was affected by the necessity for concentrating on factory production for military purposes. Full confidence in Mr Fraser, the Cabinet, and the Government was expressed by the conference.