GOVERNMENT’S POLICY

Hawera Star, Volume L, 16 February 1931, Page 5

GOVERNMENT’S POLICY

CRITICISM BV MR. HOLLAND RESENTMENT OF METHODS “SURRENDER TO REFORM” lUi>ited Press An.sociation—By Electric TKlegrupb Ucpyriglil. l WESTPORT, Feb. 14. “The first thought that will strike the average reader of the Prime Minister’s pronouncement will Be that the Government’s new policy, plus its abandonment of its railway construction schemes, leaves it making an unconditional surrender to Mr Coates and the Reform Party, on practically every 1 item except the South Island Main Trunk line.’’ Thus Mr H. E. Holland (leader of the Labour Party) sums up his opinions •on the policy of the Government as set out by the Prime Minister, the Right Hon. G. W. Forbes, on Saturday. Mr Holland has issued a statement for publication in the Press. “There lias never been in the history of any country such wholesale dishonouring of election pledges, accompanied by an amazing determination to hold oil to office in defiance of the electors whose confidence lias been violated,” says the statement. “Mr Forbes estimates that there will be a fall of about 20 per cent, in our export values this year as against 1930. That is serious enough, but is the position so> utterly dismal as the Prime Minister’s statement would lead people to believe ? Tbe export values for 1930 were less than £.500,000 below the yearly average of the ten years 1920-29, which period included two abnormal years: 1928, which showed an increase of nearly £8,000,000 over 1927, and 1929, with an increase of more than £7,000,000 over 1927. If the Prime Minister is correct, export values for the present year will amount to round about £40,000,000. or just about double the yearly average of our export values for the ten years immediately preceding the war. I have faith in the capacity of this country to make rapid recoveries from any period of economic depression, but it is quite clear to me that the policy which the Government is now putting forward will accentuate our difficulties rather than end or minimise them. BALANCING THE BUDGET

“No ono will quarrel with, the Prime Minister over his desire to balance his Budget, but most will repudiate his method of doing it,”, the statement continues. “There will be widespread resentment at the determination to place on the shoulders of the Public servants and other wage-workers the heaviest responsibility in the matter of sacrifices demanded. Even if the position should prove to be as dismal as Mr Forbes has painted it, his method of retrieving the situation would still be the wrong one. A far more equitable* method would be a super-tax on all incomes of, say £SOO and over. But even if wage reductions were admitted, it. is an extremely lopsided policy that levies a flat rate of ten per cent, on all incomes irrespective of their dimensions. It means that the man with the small wage or salary pays out of all proportion in comparison with the hignlysalaried official. If a raid is to be made on wages and salaries, why not , commence at the top, drastically reducing all higher salaries without | exemption whatever. “The decision to reduce wages,”, says! Mr Holland, “is definite and emphatic, but the Prime Minister adopts a, different tone when be talks about interest. ‘Rates of wages must come down’ Mr Forbes says, but apologetically bo makes what he term® ‘an earnest appeal to banks, mortgagees, stock and station agents, ets., to review each individual mortgage case.’ ‘The unfortunate farmers*, 5 he correctly says, ‘are not in a, position to meet the high rates of interest charged on loans, and they certainly cannot reduce their indebtedness. 5 It is for the Prime Minister to explain why he is content only to appeal to money-lenders. Why has he not applied the same legislative principle as in the case of Public servants and wage workers? A reduction of two per cent, (or even one per cent.) in the rate of interest would mean an enormously greater measure of relief to bona fide farmers than any system of wage-reduction. “The latest available statistics (1931) shows that wages paid in butter factories of New Zealand amount ±o £945,000 and in meat freezing works £1,570,000. The amount of wages paid on farms is not given, but the latest agricultural statistical report (for 1929-30) allows that the number of wage workers on farms is less than 33,000. Many of these are necessarily not in permanent employment, but if we average wages at the abnormally high figure of £3 10s a week the total paid out in wages would be only £115,500. On this high estimate all that the 10 per cent, wage reduction can save is £11,500. On the wages of butter factory and meat and freezing works employees a ten per cent, reduction will mean a, saving of - £94.000 and £157,000 respectively, a total (including farm employees) of \ £262,500.. The relief such reduction! would bring to farmers would be infinitesimal. In the case of shearers a sliding scale agreement is in ©Deration and anv interference with that will he quite as deserving of condemnation a® the proposal to dishonour other oxist- | ing awards and agreements.

COST OF LIVING

‘‘The main effect of the wage reductions will bo to deprive the local market to' the tune of some millions of pounds, destroying the people’s abilitv to meet periodical and national 'liabilities, and the farmer will be hit as badJy as the wage-worker in consequence. There is also another aspect of this question. Even if the wage-reductions were unavoidable the first condition should be an all-roundi reduction in the cost of rentals, wearing apparel, foodstuff’s, etc., but there is no proposal to legislate in that direction. The Government haltingly assures us that it ‘expects’ wage reductions will reflect themselves immediately in the cost of living. “There is no reference to the position of workers in intermittent employment —waterside workers, miners, and others, whose wages are never sufficient to give their families an average standard of living,” continues Mr Holland “Their incomes, already wholly inadequate, are to be still further reduced. Mr Forbes will have the task of formulating his excuse for reducing the wages of men with less than £3OO while he gives liberal exemption to income tax payers. However, it is beyond question that there has been no reduction in the! cost of living that will justify a ten per cent, reduction in the wages of workers and the Government may rest assured that the Labour Party will oppose to, the utmost its attack on the basic wage. No one knows better than the average business man that wage-reductions are not the way out, and the working farmer knows 1 it, too. Mr Forbes has now capitul-

a ted to the Reform Party and is proposing to continue the work began in 1922 by that party at the dictation of tlie financial institutions. “It is absurd to talk about placing the railways under non-political control, when Parliament must vote money with which to carry on the service. There is a danger that the new arrangement will mean practically handing the railways over to private control, and in that case it- will not be in the public interest. .. . . . , “The Dominion’s credit should be mobilised,” concluded. Mr Holland. “During the war no difficulty was experienced in organising the credit of the Dominion. Special methods were adopted to compel the people to contribute to the war loans and an amount of £55,000,000 loan money was raised within the Dominion. There is no reason why. similar action should not be resorted, to to-day. The whole of the Dominion’s credit should now be mobilised' to infuse life into industry. This is the time for an extension of national industrial activity rather than a downgrade policy.”