ECONOMIC POLICY

Manawatu Standard, Volume LIX, Issue 205, 31 July 1939, Page 9

ECONOMIC POLICY

A WARNING NOTE. COMMERCIAL VIEWPOINT.. CUTTING OF COSTS. ; (United Press Association—By Electric Telegraph—Copyright.) Per Press Association. WELLINGTON, July 31. > A statement on the financial t policy and economic position of - New Zealand, issued by the Assoi ciated Chambers of Commerce, ■ following a meeting of the execui tive, says that the securing by the Finance Minister (lion. W. Nash) 1 of • certain export credits from Britain gives New Zealand some ■ little relief from a dangerous situ- ■ ation. and Mr Nash is to be congratulated on the arrangements lie has been able to make in the ''difficult and unfavourable conditions that existed. L "At the same time, wo consider it imperative at the present juncture to ■ sound n warning note that the danger . confronting the Dominion has not been 1 removed, and that the financial posii tion of the country appears to lie . steadily retrogressing,'' adds the state- , meat. "The finance arranged provides no permanent solution of the difficul- . ties that led to the seeking of it. Bri- . tain has not been required to give any I pledges, but it remains necessary to i repay the short-term credit obtained, J obviate the necessity of seeking credits again in 1940. and raise the credit standing of New Zealand to assist the £17,000.000 loan conversion operations and revive confidence and encourage investment in the Dominion of local and foreign capital." After a review of the causes that led to the Government's imposition of import selection control, the statement says: The Government, like the ueoplo. must live within its income and must confine its expenditure to what it can get in ordinary revenue and what it can borrow from genuine savings. The adoption of this rule alone would ensure freedom from inflation. If the rule was not adopted and rigorously adhered to. the present difficulties, which were a direct consequence of inflation, must be expected to recur or become accentuated. SUGGESTED REMEDIES. The statement takes the view that, since rising cwts of production in New Zealand have been a factor tending to check exports, it is essential that conditions on Public Works employment be less attractive than employment in farming and other productive pursuits. The Government is also urged to encourage the return to New Zealand of investment capital by removing excessive regulation and restriction on commerce and industry, and by removing the arbitrary limits on interest rates. A longer term in periods of labour awards is also advocated, so that businesses will be able to plan ahead. It is also considered that there should be greater flexibility in hours and conditions, especially in tho-'e industries that fon tribute to the building up of the London funds. The taxation burden on industry, particularly primary, industry should be lightened. This is essential if production is to be maintained and expanded. An Attempt snould be made to increase the population by attracting suitable typey of immigrants, it is stated.