LABOUR’S FINANCE.

Hauraki Plains Gazette, Volume XXXXII, Issue 2805, 25 November 1931, Page 6

LABOUR’S FINANCE.

INTEREST AND LOANS. EXPLANATION OF POLICY. Points in the Labour Party’s financial policy were touched upon by Mr W. E. Parry, in his address at Paeroa on Friday evening. Wages and thus incomes from businesses had been reduced,, he said, but the Government had refused to reduce interest rates. This was the greatest burden to-day on land-owners, business men and workmen. The Labour Party would insist that the rates of income from interest be reduced in equal ratio to the income from other sources. It was agreed that contracts should be honoured but, if it was right for the Government to break the contracts entered into by workers through the Arbitration Court and by the Government in respect of deceased soldiers’ wives and dependants, where was the foice of the argument? The maintaining of a high interest rate while other values had fallen meant that farmers’ and house owners’ equity had disappeared. The amounts of their mortgages were not affected, it was only their equity which depreciated. Local bodies still had to pay high interest, so could not give relief to ratepayers. It was said that to alter interest rates would be repudiation of contracts, yet nothing was said of the breaking |af jqther contracts, which should have been equally sacred and inviolate. Under these circumstances, to maintain the high interest rate was repudiation of the borrower. The Labour Party believed that New Zealand would not reach stability until interest rates were reduced.

Internal Loans.

Labour’s borrowing policy had been criticised as inflation. Few people undcrstoood what inflation was, but were led to believe that it was an undesirable state. During the InterParty Committee, Mr M. J. Savage had questioned a leading banking authority on whether there would be any difference between borrowing five million pounds abroad and borrowing the same sum within New Zealand, and his reply had been that in point of inflating the currency there would bo absolutely no difference wherever the loan was raised. Labour proposed not to write any new laws in order to run New Zealand financially, but to put into operation those laws which had been enacted and used during the war period. It believed that it was of vital importance where the money was raised. If a loan was raised abroad it meant that the workers of New Zealand were unemployed while the country received goods to the value of the amount raised whereas, if the loan was raised internally, our workers would be kept in employment. In addition the interest would be paid to New Zealanders. Had this policy been followed in the past there would be no unemployed in Now Zealand to-day. Labour’s proposal was to borrow £25,000.000 in New Zealand over a period of three years. It would not be for destructive purposes, as had been the case during the war, but for productive use, the settlement of land, the development of industries, etc. If the effect on inflation was the same, no matter where the money was borrowed, surely it was better to raise the loan in New Zealand and thereby provide work for our own people than to go abroad to make millionaires f freigners and provide work for foreigners while our own people starved. The legislation of the wa period, which had been acceptable to the people would be used and, again, the loyalty of New Zealanders would be appealed to. The party was confident that when the people realised how the provision of money would bring about th© development of industries which would provide work for their boys and girls, they would respond.