The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISBORNE, TUESDAY, MAY 6, 1941. EXPORTS AND STABILITY

Gisborne Herald, Volume LXVIII, Issue 20547, 6 May 1941, Page 6

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES.” GISBORNE, TUESDAY, MAY 6, 1941. EXPORTS AND STABILITY

The announcement last week that the British Government had agreed to purchase an increased quantity ol New Zealand meat this season appears, on the face of it, to have ameliorated the serious economic crisis which is confronting the Government. It would be a grave mistake, however, to assume that the problem has disappeared or, indeed, that it has been materially reduced. Rather does it seem likely that the policy of procrastination has again been brought into operation. Last season New Zealand sold and shipped more than 350,000 tons of meat to the Mother Country. For the current season, while Mr. Nash persisted in trying to drive the best possible bargain he could, there were progressive reductions in the quantity for which Britain was prepared to contract until finally the Dominion was left with a guaranteed market for only 180,000 tons, a decline of nearly 50 per cent on last season. Now, either because of an improvement in the outlook or because of further pressure from this end, the Ndw Zealand quota has been increased to 248,000 tons, an advance of 08,000 tons on the earlier figure. For this concession the Dominion has every reason to be thankful, but it has to be remembered that while this larger quantity of meat has been sold it still has to be exported. There is a vast difference between

the two things. The farmers and the Government may be content to accept payment for this extra quantity of meat and leave the future to look after itself, but the interests of the Dominion demand that a longer view be taken of the situation. If the quota of 248,000 tons can be shipped this season all may be well, but it not —and there is considerable doubt on the point—it will simply mean that the day of reckoning has been deferred. It is all a question of the availability of refrigerated cargo space. If there has been a real improvement in the shipping position—and this may have been brought about by the increased assistance from the United States—and it is possible to clear all the meat purchased by Britain, New Zealand will have good reason to congratulate itself. But what if the increased quota is merely a sop to the Government designed to relieve the very natural concern of the farmers? In this event, the cool stores would be filled with meal which had been sold to Britain but

which had not been shipped. The same difficulties would then have to be faced all over again next season, for obviously Britain would not contract to buy more meat when she had been unable to lift that which had been purchased under the previous contract.

There is, therefore, a suspicion, at least, that the Government is merely postponing the day of reckoning instead of boldly facing the issue and adjusting the Dominion’s economy accordingly. In the last financial year New Zealand exports reached the record figure of £71,000,000. On the basis of this abnormal figure the Federation of Labour has decreed that incomes, wages, costs and prices should be stabilised. How is it possible to stabilise these incidental factors when the whole basis of the national economy is instable? Even on the revised figures the income from meat exports will be reduced this year by about £5,000.000, and that is only the start. It is significant that the trade returns just issued show that in the March quarter of 1941 the value of exports showed a decline of more than £2,500,000 on the previous year, or at the rate of £10,000,000 a year. Exports provide the basis of the national income and contribute largely to most other aspects of it. If, therefore, export income alone declines by £10,000,000 it is obvious that there can be no stability of incomes, wages, or anything else. If the pool itself is diminished —and the national income is the pool from which everything else is drawn —then it is clear that all else must be reduced in proportion.

It requires little study to be able to appreciate some of the repercussions from the restriction on exports. Most of the emphasis so far has been laid on the meat situation, but that is only one item of export. This season, for instance, there have been no exports of fruit and it is reasonable to assume that other commodities will be a fleeted by the shortage of shipping. All the exporting industries, therefore, will be directly penalised. And what about the indirect effects? If there is less meat killed there will be less paid in wages to employees in freezing works, to the waterside workers, and to those engaged in the various branches of transport. They, in turn, will have less to spend on the products of secondary industries and on other services. Thus, from the one factor of shipping restrictions there develops an economic snowball which impinges on the whole economic life of the country. In such circumstances it is fatuous to talk about stability either of the income of farmers who are compelled to sell less meat or of workers for whose labour there is a reduced demand. Because the pool has been diminished the draw-ofT of each section from it must be diminished also, and the sooner this stern fact is realised and faced up to the better will it be for all concerned.