PURCHASING POWER

Grey River Argus, 17 March 1932, Page 7

PURCHASING POWER

Restoration Necessary HOW IT CAN BE EFFECTED. There cau be no restoration of normal conditions unless there is a restoration of purchasing power (said Mr H. E. Holland when speaking to his amendment to the Address-in-Reply). The restoration of purchasing power depends upon getting the men and women who are now out of work back into industry at occupations that will be of economic value to New Zealand, and not at the starvation rates which are proposed by the Government at the present time, but at standards of wages that will enable men to keep their wives and children in decency and in comfort. I put it to the Prime Minister that there are no famine ?ou ditions in New Zealand to-day WANT IN THE MIDST OF PLENTY. There is a super-abundance of everything men and women need to keep them alive. The Prime Minister will concede that. Why is it then that men women and children are starving in New Zealand in the midst of plenty? Simply because the farmers cannot sell the foodstuffs they want t) sell: and, because the farmers cannot : ell their commodities, bankruptcy threatens them. The wage workers cannot buy the things that are necessary to keep their wives and children from being ill-clad and hungry because they are denied the right to work. The Labour Party is insisting that rhe men must be got back to work, but it must be work of economic value to Nev Zealand. I know that a number or men who are on relief work are doing useful work and are not getting paid for it, and I also know that quite a number of unemployed arc on work of a totally uneconomic character such as chopping up blackberry and gorse bushes, which will grow up again within a year’s timp.

WHERE IS THE MONEY TO COME FROM? The Prime Minister will again ask, as he has repeatedly done, where is the money to come from? Where is the money coming from at the present time? What amount of money is in circulation in New Zealand to-day? There is no gold in circulation, and practical! no coined money worth speaking of. Six or seven million pounds worth of gold is lying dead capital in the vaults of the banks. There are six or seven million pounds worth of bank notes in circulation, and these notes represent only an infinitesimal portion of the means of exchange within New Zealand. The Prime Minister knows that cheques and promissory notes constitute the main portion of the means of exchange in this country; he knows that the cheque has no value at all unless back of it there is a credit written in the books of a bank. There can be no substantial credit in the books of the bank unless there arc goods, or the promise of goods, to constitute the value on which the credit is based. THE FIRST MOVE. The first move we have to make Is to organise the industrial forces of this country —get the people back into industry—and then make our credit arrangements fit in with our productive undertakings; and, always provided that the work undertaken is of a permanent and productive character. I venture to say that there will be no difficulty whatever in arranging the necessary credits within New' Zealand. In days of war we never hear an objection that money cannot be raised. IF WAR SHOULD COME.

If the lunacy -which has been let loose in China should extend its influences to other countries, and if next week a cable should come to the Prime Minister asking New Zealand to send an expeditionary force of 100,000 men across the seas, he would respond at once, and he would get the money without any difficulty, just as was done in the war years. The Prime Minister will remember that in the war period, when we were withdrawing 100,000 of the physically fittest of thu young manhood of this country from industrial occupations, and when -we were further withdrawing other thousands from industry to cater for the needs of the men we were sending overseas, we raised within New Zealand, in that four-year period, something like £55,000,000. An hon. member: We could not keep on doing it all the time. Mr Holland: The hon. gentleman who now interjects never raised an objection when we were asked to do it in the war years. AN INFINITELY GREATER ISSUE. No matter how important were the issues of the war period, the issues for .which wo must now raise credits are •infinitely greater. We have now to raise credits to save New Zealand from the shame and stigma of women and children starving in this country while there is an abundance of food supplies. The hon. gentleman forgets that in the war years we were raising money for destructive purposes, and the expenditure could not possibly have any economic return —any return in the form of goods produced. For the purposes of reconstruction we would be arranging our credits for the creation of social values which would .'be the equivalent, and more than the equivalent, of the credits referred to. What we must not lose sight of is the fact that, apart from the results of such legislation as we passed last year —and which, apparently, we are to be i asked to repeat this year —we have some thousands of young people leaving school every year. There is no organised plan for drafting them into industry. THE EFFECT OF MANCHINERY. We have in this country, as in all other countries, the developing process of the mechanisation of industry. Machinery is coming into indus-,

try year by year —highly improved machinery, driving men out of the occupations in which they have been employed and adding enormously to the numbers of unemployed. This is the experience of nearly all countries under the sun. We have got to face that situation. It can only be faced by reorganisation of our productive and distributive processes; anl part of that re-organisation will have to take the form of reduced hours of labour. The Prime Minister is proposing to abolish arbitration awards and agreements for the purpose of making it possible to keep men working longer hours at lower rates of pay. That is the very method that is going to intensify the unemployment problem. Instead of lengthening the hours of labour we shall have to shorten them; anl this will have to be done without reduction in wages. We must maintain the incomes of the people. EQUALITY OF SACRIFICE. If we have to cope with adverse conditions we should meet them equally. Instead of meeting them on a basis of equality of sacrifice we are throwing the major part of the burden on the wage workers, while lightly letting off the men with the higher incomes.