The Hawera Star. FRIDAY, FEBRUARY 6, 1931 SPENDING POWER AND WAGES.

Hawera Star, Volume L, 6 February 1931, Page 4

The Hawera Star.

FRIDAY, FEBRUARY 6, 1931 SPENDING POWER AND WAGES.

Delivered every evening by 5 o’olook in Hawera, Manaia, Kaupokonui, Otakeho, Oeo, Pibama, Opunake, Normanby, Okaiawa, Bltham, Ngaere, Mangatoki, Kaponga., Awatuna, Te Kiri, Mahoe, Lowgarth, Manutahi, Raliaramea, Alton, Hurleyville, Patea, Whenuakura, Waverley, Mokoia, Whakamara. Obangai, Meremere, Fraser Road, and Ararata.

A decision so important as that of the Federal Arbitration Court, directing a ten per cent, reduction in Commonwealth award wage rates, is of the greatest interest to this country in view of the probability that proposals will be submitted by the Government to our own Parliament during the ensuing session with a view to enabling award wages to be reduced by general order. The grounds upon which the Federal Court reached its decision were indicated in only the briefest terms by cable, iSut they are clearly sot out in the judgment as published iu Australian papers. The real issue before the Court in the course of a lengthy inquiry was expressed by it in the question—“ Can the wage standards built up during the past years of prosperity (be maintained?” It is universally agreed, the Bench commented, that wage reductions should be the last re-, sort in any scheme of economic readjustment forced on a community by extraordinary circumstances, and therefore its task was to decide whether prevailing circumstances “forced recourse to the last resort.” Its conclusion was that they' did. Upon outstanding features of these circumstances the Court threw an effective light. The eviI den.ee before it, which it could not dis--1 regard, ws that the fall in the national income had become so serious as completely to disturb the whole economic basis. Prices for exported primary products had fallen rapidly to the extent of £-10,000,000 a year, and inability to borrow abroad—which had meant £30,000.000 a year for use in developmental and other labour-employing works—together with “repercussions” which exceeded half the amount of the primary loss, reduced the spending power of the community by- more than £100,000,000, or to the extent of approximately' a sixth of the national income. Upon the “harsh reality-” of this lost spending power the Court placed particular emphasis in view of the argument that had been adduced in opposition to the application before it. The real question, it was pointed out and reiterated in the decision of the Court, was whether the general wage level was too high for the present spending power of the country-, and the Bench was forced to come to the conclusion that a general reduction of wages was necessary, for, as it summed up, an emergency- had arisen, which called for immediate readjustment of costs of government, production and services;, rents 1 , dividends, interest, and other returns on capital, and costs of living. There is no escaping the import of the words of the Federal judges: “Great and increasing unemployment is strongly symptomatic, of a wage level too high for our present capacity-.