Report From The Capital— Political Significance Of Exchange Cut

Greymouth Evening Star, 28 August 1948, Page 2

Report From The Capital— Political Significance Of Exchange Cut

. (SPECIAL CORRESPONDENT) WELLINGTON, This Day. The exchange rate announcement was the biggest political news for a decade. The suggestion that New Zealand might one day revert to parity with sterling had been current for so long to be exact, 15 years, since it was last altered in January, 1933 —that it had become a hardy annual. Many of those associated with Parliament Buildings had expected some last-minute alteration to Mr Nash s Budget.

A caucus of the Parliamentary Labour Party was held throughout last Thursday, the day of the Budget. Caucus met at 9.30 a.m. and adjourned for lunch. It was again hastily summoned for about an hour at 4 p.m. It met a third time at 6.30 p.m. and did not break up until the bells were ringing to summon members to the House at 7.30 p.m. Even at this stage, lobbyists had not the slightest idea that anything was brewing about the exchange rate. It was not until Mi- Nash had been speaking for over an hour, that word seeped around the lobbies that the Minister would make an announcement of major importance at the end of his Budget. When Mr Nash came to , reading the two pages of handwritten notes which made all the difference, he had completed his announcement before its full import had sunk in. The galleries and the Opposition were open-mouthed and flabbergasted, the Left-wing Treasury benches were openly jubilant, with broad winks and beaming smiles, while the Right-wing seemed to greet the bombshell with a noticeable lack of enthusiasm. Bid To Retain Power

Only five people apart from Mr Nash are supposed to have been let into the exchange rate secret in advance, and some of these were departmental officials who had to do much of the spadework. Cabinet approved the new rate at 6.40 p.m. on Budget night. The recommendation was taken to the caucus five minutes later, and it was approved by them just before the House resumed at 7.30 p.m. Among the spate of words surrounding the varying reactions which have met the new rate, one item has been overlooked. It is the political significance of such an action. Whether the move is good for the country or not, the fact remains that the Labour Government' is convinced that this drastic step may help them retain their weakening hold on the Treasury benches.

Prior to the Budget, even some Labour members openly admitted that the Government was on its way out. Now they are singing a different tune. Their support comes almost entirely from the city seats, and they hope that the reductions m prices, which are hoped to become effective in time to have a real effect on the 1949 general election, will renew the support of the ciiy-dwell-er. The Labourites now claim that marginal seats such as Roskill, Tamaki and Otahuhu in Auckland and Oamaru in the South Island look very much safer. Many are resign-

ed to saying a temporary farewell to Mi- A C Baxter, who has a majority of 13 votes in Raglan, but they hope to regain such seats as Rarnell and Otaki. , Not Worried About Farmers The Labour Government does not appear to be over-worried about the probable loss of what votes they have left among the farmers. It is too early, however, to sum up any likely effects, for before long a new guaranteed price may be announced, which may even contain some sop to the farmers. Finally, will there be a second Budget this year? The answer is no. Although there might appeal to be every justification lor this couiSe, those close to the Minister aie definite that no such action is even being contemplated. It is rumoured around the lobbies cf Parliament Buildings that Mr W. S. Goosman (Opposition-Piako) who, incidentally, was the most successful racehorse owner in the pas. season proposes to call one ol his two-yeai-olds, “Bias.” This story is not confirmed, but, if correct, it would be interesting in view of the slight contretemos between Mr Goosman and the Speaker recently about the question of whether the word bias was Parliamentary or not when applied to a Minister.