DOMINION’S ECONOMY

Evening Star, Issue 23862, 17 April 1941, Page 10

DOMINION’S ECONOMY

GOVERNMENT AIM STATED REASONABLE STANDARD OF LIVING CRISIS REQUIRES STABILISATION fPiin United Press Association.! WELLINGTON, April 16. Addressing tlio annual conference of tlio Federation of Labour, the Minister of Finance, Mr Nash, said the Dominion’s economy was now under the control of the Government to a greater degree than in any other country (states tlio official Labour newspaper). Jn the last 12 months, Mr Nash said, the country had met every commitment which had come due overseas and had paid for all the goods imported. The imports had been confined to essentials, and would continue to be restricted more and more to essentials, because if we wanted to win the war it could only be done by diverting funds from non-essential goods to fighting purposes. Although the volume of goods available had been greatly reduced, the money which the people had available had continued to increase, Mr Nash said. It had always been the Government’s policy that the wage-earner should receive sufficient to enable him to purchase the necessaries of life and maintain a reasonable standard of living. Wages and salaries to March 31 had amounted to £120,452,000, a sum which had never been equalled in the Dominion’s history, the Minister said. Although it had been necessary to withdraw purchasing power from all classes in order to maintain financial stability, the Government bad taken good, care that the people on the lower incomes had not been forced below a reason-able-standard of living, and this would continue to be its aim. One method by which the Government had carried out this policy had been to give more and more back to the worker in the way of social services. “In New Zealand we are already faced with sterling restrictions on the shipment of meat and butter abroad, and may have smilar trouble with still further products,” Mr Nash said. “If we cannot sell our exports we cannot buy imports, and this may even affect the supply of raw materials for many of qur factories. The results may be a much reduced volume of goods for consumption and a real danger of inflation internally. In such circumstances any movement to increase wages generally would have harmful effects upon the wage-earners themselves.. The essence of the matter is that New Zealand is faced with an economic crisis, and it is essential that everything should he stabilised as far as possible. “ During the present year we will try further to reduce the interest rates,” the Minister informed the conference. “We will try to keep profits at a minimum and take it from them when they make too much. We will also try to stabilise wages and salaries in so far as they will buy goods. It is only the availability of goods and services in the long run which determines the standard of living. We have made the maximum quantity of goods available.”

Dealing with objections that some companies wore making excessive ■ profits at the . present time, the Minister quoted the case of a company which made a profit of £IO,OOO and had to pay back to the Government in the form of taxes and compulsory war loan a total of £10,386 os. “There is not much, left for dividends there,” Mr Nash commented. “ Out of capital this company had to pay £386 over and above its profits.” In the case of a larger company, which showed profits totalling £250.000, the amount which it had to find for the Government .was £261,386. He also instanced the case of a man in receipt of £20,000 a year who was called upon to pay in taxes and compulsory loan the sum of £3,847 in excess of the amount he had received during the year.