Report From The Capital-- Plans To Save Dollars May Divert Budget Comment

Greymouth Evening Star, 20 August 1949, Page 2

Report From The Capital--Plans To Save Dollars May Divert Budget Comment

(SPECIAL COBRESPONDENT) WELLINGTON, This. Day.—While., the political thunder this tfeek was stolen by the presentation by the Minister of Finance, Mr Nash, of the fourteenth Labour Budget, there is another matter lurking in the background which may well steal the show before long. This is Mr Nash’s forthcoming report to Parliament on the steps which New Zealand will take to implement its promise to the British Commonwealth to cut dollar'expenditure by 25 per cent.

Political observers are of the opinion that-within a week of the presentation of the Budget, Mr Nash will seek to divert attention from its contents —or lack of contents—by turning the spotlight on to the wider international subject' of aiding Britain and the Commonwealth. Last Friday and again on Tuesday, the Cabinet discussed the steps to be taken by New Zealand to prune dollar spending. The most likely steps to be taken are: — 1, —No more consumption goods to come from the'United States; 2. — Sterling sources to be explored for, newsprint supplies; 5.- —A close watch to be kept on American film imports; 4. Government-sponsored plan to encourage more American tourists, 5. Possible diversion of exports, particularly lamb, to the United States to earn dollars. Almost two years ago, the Government summoned a highly representative conference to meet in Parliament Buildings, to discuss means of aiding Britain in her economic crisis. Farmers, Chambers of Commerce, manufacturers, importers, newspaper proprietors, business executives, womens’ interests and the Maoris gathered together to hear reports from the Prime Minister, Mr Fraser, and the Minister of Finance, Mr Nash. Committees were formed in a splendid spirit of co-operation and sacrifices were made by various sections. Voluntary cuts weie made in various aspects of dollar spending to save the then dwindling Commonwealth dollar pool. Two years later, the position has become even grimmer, and the Commonwealth has agreed to cut dollar spending by 25 per cent. For Australia and other countries this is a comparatively simple matter. But New Zealand already is near the bone and her problem is the harder.

Courage Required About one-fifth of New Zealand’s dollar spending is on “invisible items, such as films, travel and overseas artists and wrestlers. This will be one line of saving, and it will be interesting to see if the Government has the courage to touch this. Two important items of dollar expenditure are industrial machinery and timber. Imports of timber can be reduced, but it will be more difficult to reduce purchases of industrial machinery, particularly farm tractors. But unless the September Anglo-American talks result in some American policy of investing capital in foreign countries these may have to be cut. , New Zealand will find it hard to reduce dollar expenditure, which has already been cut almost as fine as possible. But she may find more scope in increased dollar earnings. Behind the bald announcement tnis week by the Minister of Internal Affairs, Mr Parry, that the assistantmanager of the Tourist Department, Mr R. M. Firth, is to visit America to bring tourist agencies up to date with information about New Zealand, lies a Government plan to encourage more American, tourists to ccme here. So far, the details are confidential, but it is sufficiently ambitious in scope to hold hope of some success. More will be heard of it later.

Butter For America? The best way of earning dollars is obviously to divert exports of New Zealand principal primary products to America. As a result of the phenomenal production season, there is enough butter in New Zealand to enable one or two shipments to be sent to the United States without affecting Britain’s basic ration. But it would be a bold Government that would take this step while butter rationing remains in New Zealand, ft

is 'understood that New Zealand’s representatives have told Britain that the Dominion will put up with rationing so long as supplies are going to the Mother Country—and to no one else.

New Zealand’s major dollar earner could be wool. Here, the trouble is that large quantities are being bought here, chiefly by Continental buyers, for consequent resale to America. The Government has been aware of this for some time, but it is a difficult practice to halt. Without any publicity, however, steps have been taken in recent weeks to compel ' all shippers in New Zealand to sign declarations stating the ultimate destination of their purchases. If these leaks can be plugged, New Zealand could earn more than her proportionate share. . The main hope seems to he in meat. Provided production in the Argentine is maintained; it is thought in high circles that New Zealand will be able to make two full shipments of lamb to the United States. Definite Government proposals along these lines are expected to be announced to Parliament by Mr Nash some time next week. They will be sufficiently important to divert most of the criticism of the Budget, ana the House of Representatives will have ample opportunity to debate both the Budget and the dollar proposals during the lengthy Budget debate which will last for about the next three or four weeks of 1 arliament. Producing Newsprint The vast Government project to manufacture newsprint at Murupoya, near Rotorua, is still in the blueprint stages. Although the Minister of Lands, Mr Skinner, promised a lull report “very soon,” it is.known tna the proposals have yet to be approved by the Cabinet. Mr Skinner will put forward the scheme for Cabinet approval next week.