The Grey River Argus FRIDAY, August 19, 1949, A PROSPERITY BUDGET

Grey River Argus, 19 August 1949, Page 4

The Grey River Argus FRIDAY, August 19, 1949, A PROSPERITY BUDGET

JT is a magnificent account of Labour’s stewardship over a term approaching fourteen years which was last evening given to Parliament and the country by the Minister of Finance. None dared question the facts that industry has excelled all records of the past, likewise national income, and that poverty and multimillionaires are alike conspicuous by their absence from the country. As he said, when othercountries are experiencing or expecting difficulty in disposing of all their products which normally enter into international trade, we have a full ai|d insistent demand for all our products- Controls have been necessary and efficacious, but are being removed, as in the case of meat and sugar, and of building. It transpires that the substantial subsidy outlay goes largely to dairy exporters, who say they otherwise would charge 2/4 lb for butter here. The National Party might cut out the subsidy, if not also the rationing ‘ whereby Britain is afforded so much more of this essential foodstuff, but the result would definitely be bad compared with the present successful stabilising which applies in many directions. The Budget illustrates the rise in our living standard and the increase in our supplies of goods and services. The increase in benefits and pensions is well warranted for those unable to increase their earning-power, being a recognition of the fact that every one should share in an increase in the national income and in an enhanced standard of living. Of the current year’s subsidy provision, £13,934,000 (compared with £11,663,710 last year) the main increase has been incurred in respect of butter and milk for local consumption consequent on recent increases in the guaranteed prices paid to producers. The latter now are getting another lid per lb for butter fat. The State’s payment of half the subsidy for imported fertilisers is another aid for farmers. The Minister remarked that the Daily Industry Stabilisation Account balance as at July 31, total-1 led £15,400,000, of which £12,200,000 was. invested, and the Meat Pool and Meat Industry Stabilisation- Account estimated balance as at September 30, is £29,000,000, of which £27,000,000 is invested. These funds will be increased by the recent 74 per cent, increase in prices for the 1949-50 season under the long-term contracts negotiated with the United Kingdom. The national income figures given are a telling reply to the Opposition’s allegation that the country is not growing more prosperous. Renewal of the £lO rebate on income tax will distribute as widely as possible a i very substantial concession. A ■ remarkable change wrought by this Government- is that, whereas interest on the public debt when : it came in, used mostly to go over- i seas, it is now mostly remaining i in the Dominion. Even ten years 1 ago 34 per cent, of the national < income went abroad as interest, 1 but less than one per cent, does ? now, whereas the percentage re- 1 maining here then was less than i 24 and now it is 3 1-5. Tax re- ‘ ductions since the war have meant for family men advantages rising ’ from £62 per annum to £147. The 1 Minister points out that of every f £1 of taxation, social security ac- f counts for Ils 7d (pensions and ’ benefits 7s 4d, education Is 6d, I stabilisation Is 7d, and health Is * 2d), defence 2s, debt service 3s y 2d, and administration 3s 3d. It /

is thus obvious that taxation is very evenly and equitably laid out, and serves, to maintain an enviable social and economic equilibrium. No doubt the country must face up to increasing defence needs, as recognised at the referendum. The latest defence conference to begin to-mor-row in Mlbourne, due partly to Britain’s call, indicates what may be expected- In 1939 defence cost only £1 13s 6d a head, compared with £5 14s 2d now, while the new departure will raise it to £9 a head. Britain’s outlay is £l5 2s per head. One point is that the War Expenses Account, of which rehabilitation absorbs more than two and a-quarter millions, will meet current demands. The rehabilitation record is a grand one, with 6253 now settled on the land, and £6l millions in loans, including nearly £3O millions for housing, £23,600,000 for farm settlement, £4,500,000 for businesses, and £3,480,000 for other needs. Housing loans to ex-servicemen to date total 25,259 and 10,256 State rental houses have been allocated to ex-servicemen, making a total of 35,515 who have been assisted to obtain their own homes. During the year rehabilitation expenditure and loan authorisations amounted to £19,327,000, making the total to date £84,643,000. It is estimated that requirements in the current financial year will be in the vicinity of £18,000,000.. Mi- Nash proved last year’s production a record, 20 per cent, above 1938-39, and i.almost 30 per cent, above 1935-36, when Labour took over. Production for the year ended June, 1948, was £265 million. Of this £132,400,000 (roughly half) was exported. The total value of all goods available for use in New Zealand in the same year was £275,900,000. Of this, £143,000,000 (about 52 per cent.) was imported. Our overseas trade continues to expand, the volume of exports in the calendar year 1948 being 27 per cent, above the 1938 figure and 28 per cent, above the total in 1935. The volume of imports in .1948 was 84 per cent, above the 1938 total. Finally Mr Nash states goods available here are 25 per cent- more than pre-war, including 20 per cent, more local production, each individual having one-third more goods available than thirteen years ago. Inflation is ending. Last year the Dominion’s increase in the volume of money was £3.5 million—compared with £22.6 million for the year ended March, 1948, £6.9 million for 1947, and £32.5 million for 1946. As Mr Nash remarked : “On the evidence of the considerably diminished increase in the volume of money, it seems clear that, by such measures as gen- 1 eral stabilisation, price control and the restriction of tradingbank advances, the financial policy of the Government has been successful in preventing / buoyant conditions from develop-1 ing into inflation”. I