PRICE LEVELS

Hawke's Bay Tribune, Volume XXII, Issue 270, 29 October 1932, Page 8

PRICE LEVELS

MR. COATES HOPEFUL IMPROVEMENT IN NINE MONTHS. ECONOMY STILL NEEDED. Pukekohe, October 28. “As the result of the Ottawa Conference the Dominion will see, not in the immediate future but in about nine months’ time, a gradual but definite improvement in the price levels for the produce we depend on—the products of the farmers,” said the Kt, Hon- J. G. Coates, addressing 600 people at Pukekohe to-night on the general atmosphere surrounding the conference. Mr Coates remarked that he felt more confident about the future than he did before the conference. Our export field was not now the narrow field of New Zealand, but one spread out to include a quarter of the population of the world. The discussions were the interests not only of the partners in the Empire, but of the world as a whole. Our conditions were no different from those of the sister Dominions, and the remedy was beyond the singlehanded effort of any individual nation. Mr Coates dealt with the Ottawa concessions on the lines previously published, and announced that arrangements were being made to sell the surplus hops on hand ahd those for some time to come. New Zealand had gained a reputation for good products, and he urged producers to maintain that high standard. A great deal had been done in the matter of effecting economies in public expenditure, and as a result a substantial improvement had been effected in the position of public finances for the current financial year.

RESTORATION OF BUSINESS. The restoration of business and confidence would undoubtedly do a great deal to accelerate progress along the road to recovery. In order not to check incipient recovery of such confidence, the Government had this year adopted the extraordinary course of budgeting for a deficit not exceeding £1,000,000, and had refrained from imposing any further taxation . either for general purposes or the Unemployment Fund. In fact, there had been some movement in the opposite direction in that the Government had restored penny postage and, pursuant to the Ottawa agreement, made reduction* in Customs taxation estimated at £250,000 for the balance of this financial year. In addition, every effort was being made to provide work for unemployed and use moneys in such ways as will provide the maximum amount of assistance towards a revival of business activity. The building subsidy scheme was a case in point. In short, the Government had so arranged matters as to provide a breathing space from further taxation burdens and was doing its utmost in other directions to encourage business recovery. USE OF RESERVES.

At the same time it should not be assumed that we were out of trouble financially. The Budget for the current year allowed for a deficit not exceeding £1,000,000 after taking into credit £2,500,000 to be obtained from reserves. These reserves were not in a liquid state, and special arrangements had been made with the banks to enable the amount to be made available. It must now be realised that this was practically the end of reserves built up in more prosperous time* and that, to obtain a balanced Budget next year, the amount of the reserves being used this year, plus the estimated deficit, a total of £3,500,000, must be made up from some other source or obtained by a further reduction of expenditure. We certainly mid not go on budgeting for deficits Such a course would inevitably increase the difficulties instead of relieving them; this being so it 1* imperative that the rigorous control of expenditure and the campaign of economy in all directions must be continued without abatement. Mr Coates said that he would like to impress this on the people of the Dominion. PERMANENT ECONOMIES. Furthermore, we must press forward with permanent, far-reaching economies designed to afford the maximum amount of service at the minimum cost. Any further permanent lightening of the burden of expenditure must to a large extent depend upon far-reaching changes to obtain equal service at less cost or on the definite curtailment of those services rendered by the State. Just as the Government was overhauling costs, it expected that local bodies would do likewise.