Government’s Financial Policy

Manawatu Times, Volume 63, Issue 48, 26 February 1938, Page 3

Government’s Financial Policy

"SPENDING ITS WAY THROUGH PROSPERITY." "Financial affairs occupy a prominent place in the policy of the Government," remarked the Hon. J. G. Cobbe, M.P., in the course of his very trenchant criticism of tho socialistic policy of the Labour Government, at Feilding last evening. "Judging by their erratic steering on the legislative ocean, it is a question whether they will be wrecked upon the jagged rock jf imitation Soviet dictation, or the shelving reefs of empirical finance. The weekly returns of the Reserve Bank show the latter is the more immediate danger. It will be noted the note issue was recently in excess of £15,000,000. And as our primary producers will be paid in inflated currency, the question may soon arise, what will be the real value of that currency! "The spectacular failure of the United States five-year plan should be sufficient evidence that the attempt of the New Zealand Government to spend its way to prosperity, is on the road to the limbo of exploded theories and discredited fallacies. The United States plan for a managed recovery from the result of the depression was based on the theory that a country could spend its way back to prosperity by using public funds. The final result was that the market value of stocks on the New York Exchange dropped by some 25 billions of dollars. And the Bulletin goes on to say "it initiated business declines that are still under way, and which have already become genuinely serious through tho business structure of the nation. " "If Americawith its great wealth unparalleled natural resources, and the financial expeiience of its leading men, made such a spectacular failure in an attempt to save by spending, to increase by washing, to enrich by imprudence. Is it to be wondered at if we feel alarmod at the head-long haste with which Socialistic legislation affecting the future is, without any heed to the lessons of the past, or even of the present, being imposed upon our country. Surely we have reason to be deeply concerned.”