MR NORDMEYER’S OPTIMISTIC REPLY

Grey River Argus, 24 August 1949, Page 5

MR NORDMEYER’S OPTIMISTIC REPLY

Essential U.S. Machinery Wil! Be Obtained To Boost Production WELLINGTON, Aug. 23. Hon A. n. iNordmeyer replied to the Budget debate of Mr S. G. Holland. He said that Mr Holland hau spoicen of branch resignations as it they were confined to the Labom Party, “yet,” said the Minister, “In my own electorate, one of his most prominent supporters has resigned and is standing as a Liberal, on the grounds that the National Party has departed entirely from the principles of Liberalism which it once espoused.” One could go through the country and point to resignations from the National Party. But that would not be news.” Mr Holland’s speech showed that the Opposition had failed to give serious consideration to imany of the major items of the budget, which items had been, either lightly brushed aside, or conveniently ignfored. It would, however, be agreed that prices were now at, or had already passed the peak. Mr Holland cairned that incentive for production was lacking, but production had, in fact, expanded steadily in recent years, when the farmers and the traders carried a heavier taxation burden than remained for them today. NOT CONSISTENT The talk of economy came strangely from the leader of a party whose members would cause an expenditure which would make the eight millions increase for which the budget provided “seem like small change!” The Opposition members had asked for social security benefits without any means test. Had they complained that the defence vote did not show greater increase this year, and they would, doubtless, seek for greater expenditure in their electorates when the estimates were debated. Mr Nordmyer said that high taxation would have to continue in order to meet the level of expenditure to which the Government was committed. It had been said that the Labour Government was greedy, and would not let go any of its taxation, and an impression had been -wen that the Government was reluctant to reduce taxes once they had been imposed. That was, simply, not true. The time had come to realise that only the State could do certain jobs, that it could undertake certain responsibilities better than could the individual. Mr Nordmeyer said that the policy pursued by the Minister of Finance in reducing the overseas debt of the country when we had large sterling funds lying idle, was wise at the time, and in the light of events, it had been shown to be so.

DOLLAR LOAN QUESTION It ’was fcever intended that the policy of pay off these loans would always continue, and he (Mr Nordmeyer) had never shut his eyes to the fact that the time might come when New Zealand would have to borrow from Britain, or elsewhere, to obtain funds to provide capital equipment. T He agreed with the Leader of the Opposition that the question of a dollar loan should be approaches with caution. Mr Nordmeyer said that, if it was in the interests of this country or more important in the interests of Great Britain, that a dollar loan be negotiated, we should pursue the bold course. In spite of what the Leader of the Opposition had said, the bankers of America w’ould not be hesitant in lending money on advantageous terms, because they knew that New Zealand’s credit stood high.

NEW. INDUSTRIES In the light of the Leader of the. Opposition's comments on the woollen trade, it seemed to be a crime that new industries had been established in the country and that workers were attached to them. Mr Nordmeyer said that with regard to the Reserve Bank payments, not one penny of the money involved was put into circulation. It was a mere book entry. „ . . The scope and scale of the Social Security benefits, and of the Pernns Sible income, and of the cash holdings of beneficiaries, had opened the gates wider than any previous Government dreamed of. It was idle to speak of a penalty on thrift when farmers could retire to a town house and could live comfortably on social security, as many of „ The exchange appreciation a year ago,' had been fully justified Cais tractors, buildings and materials were al LMng P costs had definitely been reduced and, as money now had a greater purchasing power the value of savings had appreciated.

machinery needed Mr Nordmeyer said that If New Zealand were to develop he resources fully, and- if her vast untapped potentiaities were to be used, it was necessary to obtain from some overseas louhe the machinery anti the plant that would enable, us to achieve the increase m Ppmary and secondary production which so earnestly desired. , , e In the last few years farmers had been crying out for .^ n }^ lca J Inrt 1 nrt tors and farm machinery, and al though some of what they sought might not have been necessary, a very high proportion of the iarmeis requests for American machinery and tractors were legitimate if production was to be increased. New Zealand had to rel Y 011 Great Britain to provide dollars ioi many imports, because the How of goods from New Zealand to the dolfar area, in recent years had not been sufficient to finance dollar purchases. We might do so to a limited scale by diverting our R'ods Horn the sterling area. That would hem, to some extent, to correct the balance and he had no doubt, that, over a period, we would have to increase the supply z of goods-to the do Jar ar The great bulk of . our foodstuffs however, went to Britain, and httle could be done 1 with our food products to earn more dollars. Mr Nordmeyei said there were other products, such as wool, hides, skins and tallow which we could export to the dollai areas to. a greater extent than m the Pa Anv dollar loan the Government obtained would be for the express purpose of obtaining capital equipment, farm machinery, and otherwise vital for the country s future development. PLAIN FACT “The plain fact is that the resources of this country can be developed only with plant and machinery that are obtainable only from the cionai areas. New Zealand, in asking tor < dollar loan does not come as a mendicant, seeking charity, but as a country of vast potentialities, seeding a loan to build up primary and secondary industries. Mr Nordmeyer said. “The credit of this country is his? a Ita reputation is unsullied Its capacity to (repay is undoubted. It is ordinary, produent business action that, when additional plarit foi lu ture development cannot be bought out of current income, a loan should be obtained. The time has arrived to

fritter away on consumer goods, and the loan will be used solely to acquire plant and machinery that will increase production. “If this loan builds our resources, helps farmers to increase the world food supply, and helps the manufacturers to increase' output, if we get the materials- so urgently needed for development, it will be money well spent.” ' Mr Nordmeyer said that production over a wide field of primary and secondary goods had increased substantially, as compared with the pre-war years and the post-war gap between money and-Roods had been bridged.