EX-FINANCE MINISTER AND LABOUR LEGISLATION

Northern Advocate, 19 August 1936, Page 8

EX-FINANCE MINISTER AND LABOUR LEGISLATION

ISpecial to “Northern Advocate.” 1 ] DUNEDIN, This Day.

p” -V, ex-Minister of Finance, the Hon. W. Downie Stewart, in p | an address before the annual |i :l meeting of the Dunedin Chamber of Commerce last night, said that %. ; 4* steps should be taken to provide | safeguards against the danger of State control.

% Mr Stewart felt that commercial !nnd trading activities should be as far as possible from political control. While it was true that 4he dominant political opinion ran the other way at present, he judged from past history that, before long, accusations of political favouritism, nepotism and unfair political influence would arise.

Experience In Europe.

DOWNIE STEWART STRESSES DANGER OF STATE CONTROL

In fact, he thought it was only a question of time until both Ministers and Public Service would themselves seek to revert to nonpolitical boards.

Referring to the changes made in the Reserve Bank constitution, the exMinister said that unless the bank could pursue a consistent policy, unaffected by changes of Government; there might be violent fluctuations be tween inflation and deflation, according to the changing Ministers.

In Europe, the experience of reserve banks seemed to show that those Under political dictation were the ones to get into serious difficulties.

“The Minister of Finance,” he added, ‘says that it is an indictment of every member of the .House to suggest that political control is dangerous, as it infers that members of Parliament have not the same integrity as the people engaged in private enterprise. But that is not the point at all. It is not a question of integrity. It is a question whether political and electoral considerations may not override the soundness of banking principles.”

The Finance Minister had also repeatedly stated that while the trading banks were well conducted, his chief objection was that they were run for profit. However, that difficulty was guarded against, when the Reserve Bank was founded, by the provision that the profits of the Reserve Bank belonged to the Government. “So far as the use of public credit is concerned,” said Mr Stewart, “the Minister has stated that what he is advocating is in line with standard orthodox economics. If so, in that respect, his views conflict with the preelection statements of some of his colleagues and supporters. But it is right to say that the views he now holds are substantially in accordance with those he gave before the Monetary Committee in 1934. Best Of Both Worlds. “So far, he appears to have been successful in making the best of both worlds. By that I mean that, on one hand, he has satisfied his party by his large extension of social services in the way of pensions, etc.,. and, although this may have been rendered possible by rapidly expanding revenue, his followers are not likely to demur merely because these increases have come of orthodox methods.” On the other hand, Mr Stewart went on, although businessmen viewed with dismay the increased tax burdens, no violent change in the monetary policy had been launched. It was gratifying that the Minister hoped to balance his Budget by orthodox means, but he was sure that Mr Nash, later, would realise that the graduated land tax was unjust and inequitable.

Mr Stewart said he was responsible for the abolition of that tax in 1931.

Concluding, Mr Stewart said it was probably on account of the danger of inflation that the Minister had taken the power to prohibit the export of capital, for if too much money were issued it would tend to depreciate the value of New Zealand currency, and if that happened, people would try tb transfer their funds abroad.

If any embargo on the export became necessary, he finished, it would be regrettable, because New Zealand had been largely developed by private capital from overseas. If any ban were imposed, it was reasonably clear that no more capital would come in, lest it might not be able to get out again.