Mr. Savage Believes Attack Is Best Defence

Northern Advocate, 28 July 1938, Page 6

Mr. Savage Believes Attack Is Best Defence

[Special to “Noithern Advocn?.”] WELLINGTON, This Day. The Prime Minister, Mr Savage, disagrees with the annual report to Parliament of the Reserve Bank in one or two instances. When Mr Savage was asked to comment on the report last night, he stated emphatically that he could not agree with the idea of holding up public works in anticipation of a slump. The vieW put forward in the bank’s report was that the extent of public works should be regulated as far as practicable according to the state of employment in other directions. It was suggested that there should be a slowing-down when the demand for labour for other purposes was relatively satisfactory, and an acceleration during periods of comparative business inactivity. Opposed to Orthodoxy. “I am not finding fault with anybody’s opinion,” said Mr Savage, “and I give credit for the viewpoint taken in the report. It is the orthodox point of view, but ft is one which I do not hold. It is based on the theory that slumps are inevitable, but I prefer to think that bad times should only arise from famine or some similar natural cause. There is no evidence that our production's breaking down. Therefore, the only way in which a slump can happen is through people being unable to buy what they are able to produce. With adequate purchasing power spread over the community, and production maintained, there is no earthly reason why any section of the community should suffer distress. Work should not be carried out just for the sake of work, but because it gives a new service and creates additional wealth or greater facilities for the people. That is the only excuse for a public works policy. “I know we have a lot of leeway to make up In public works. That is not our fault, but our misfortune, and it

is our bounden duty to correct the , fault of our predecessors. Commonsenso Balance Wanted. “I admit that we must keep a commonsense balance in our productive and general developmental agencies, but to set out deliberately to hold up public works in the belief that slumps are inevitable is something to which I for one refuse to subscribe. The person who spoke about the inevitability of slumps is creating the slump psychology in the minds of the people. That is harmful, and the person taking up such an attitude is rendering a disservice to the country.” When asked to comment on the suggestion in the Reserve Bank report that all advances made by the bank in financing the Government’s marketing policy should be secured on the Consolidated Fund, Mr Savage said he did not think he had better discuss that point. It opened up a subject that would fill a newspaper. The only thing he had to say was that the time must come eventually when everything would be secured on the production of the Dominion.