EXCHANGE RATE AND INCOME OF FARMERS

Northern Advocate, 12 August 1948, Page 3

EXCHANGE RATE AND INCOME OF FARMERS

WELLINGTON, Thu. (P.A.).— Any deduction from the new scale of prices for primary products of an amount equivalent to the sum represented by the present exchange rate between New Zealand and Britain would be a breach of the agreement between the Federated Farmers and the Government, said the Minister of Finance (Mr Nash) in the House of Representatives yesterday.

This opinion was contained in a written answer to a question by seven Government members,. Messrs F. Langstone (Roskill), W. T. Anderton (Auckland Central), W. W. Freer (Mt Albert). T. E. Skinner (Tamaki), P. Kearins (Waimarino), G. H. Ormond Wilson (Palmerston North) and Dr A. M. Finlay (North Shore). They had asked if the Minister would favourably consider making such a deduction and applying it to the partial repayment of the internal national debt and to subsidising various commodities on the local market.

i benefit of the farmers to the extent of I £25.000.000 a year. WOULD CUT EXPORTS Mr W. Sullivan ,o—Bay of Plenty) ; said the questioners were not prepared | to tackle the exchange rate question on a flat basis, but had sought out one | section of the community. ; It showed how dangerous it would | be for any country to have a set of ] theorists like the seven members con- ! corned in charge of its affairs. ! The proposal would reduce the coun- ! try’s exports as well as its imports. | The farmers had already been dej prived of £35,000,000 in New Zealand j curency of their own money, and an I effort to take away 25 per cent of their | income would be injurious to the j whole economy of the country, i Mr Anderton said the exchange rate : had been imposed because the farmers’ ! incomes had been reduced owing to the i lowering of prices in Great Britain. | It had been of some benefit to the i bankrupt farming community at that j lime, and the farmers were bankrupt ! until the Government placed the in- | dustry on an economic basis through | the guaranteed price. The workers’ j wages had not increased with the ' farmers’ income under stabilisation, j Whatever wealth the farmers produced could be produced only with the cooperation of the rest of the community Mr W. A. Shcat (O—Patea) said the members who the question on the Order Paper were the greatest collection of wage-cutters in the House. CUT IN WAGES The effect of their proposal would be to reduce the wages of every farm worker in the country because it would result in a reduced payout to the farmers. If it were wrong that Ihe exchange rate was £125 New Zealand to £IOO sterling, let the Government take the responsibility of bringing it back to par, and let the Government pay prices to cover the farmers' costs in sterling.

HOLDING OF BALANCES

Mr Nash said the Government considered the existing stabilisation arrangements had been and would continue to be of benefit to the farming industry, and, as previously announced, any balances were hold for the benefit of the farming industry as a whole.

Mr E. B. Corbett <o—Egmont) said the Minister’s reply was very satisfactory, but tlie framers of the question had no appreciation of the injustices which their proposal contained.

In fact, the question involved the confiscation of 25 per cent of the farmers’ income.

The members who had asked the question overlooked the fact that the primary producers were already paying a large amount in subsidies, and those members also lacked appreciation of the point that the new agreement for prices was based on the existing exchange rate.

ASTONISHED The part that astonished him was that Mr Kearins, who was closely associated with the farming industry, should have appended his name to the question, said Mr Corbett. He suggested that Mr Kearins must have been gulled by some of his associates, and the question reflected the attitude of the Leftists toward the primary producers. Mr Wilson said the agreement was satisfactory to Britain and New Zealand, but had altered the position in regard to exports. The pool accounts were for the benefit of the whole community—

Mr Anderton knew the workers had received increased wages to cover increased costs. Mr Skinner said the farmers knew who had put them on their feet. The people who would not support the Government were the people who had been farming the farmers. Irrespective of what the Government took away from the farmer, he would still get the guaranteed price, paid for and subsidised by the workers.

Opposition voices: No. —“if there was a fall in prices over seas,” continued Mr Wilson.

He would be happy if the pool accounts were left alone, provided they were not drawn on by the farmers. ‘CLUMSY EFFORT’ Mr K. J. Holyoake (O —Pahiatua) said the question showed a hostile attitude and deliberate discrimination against the farmers, and also showed the rise of the Left Wing. A significant omission from the list of questioners was the name of the member for Raglan (Mr A. C. Baxter). The question was a clumsy political effort to set a section of the people against the farmers. The questioners did not ask that the exchange rate be abolished—they just wanted the farmers’ income written down 25 per cent.

Mr R. G. Gerard (O —Ashburton) said the question represented a move by the Government’s Left Wing to split town and country further apart.

Mr S. W. Smith (O—Hobson) said he wondered if the Left Wing was flying a kite on behalf of the Government.

Mr A. G. Osborne (G —Onehunga) No, it is not.

The question suggested the grip of the Left Wing ,and what the Left Wing suggested today the Government usually did tomorrow.

Mr Langstone said the question had nothing to do with the stabilisation funds.

The exchange rate had been fixed at a time when the farmers were getting low prices. It was a tax on the people for the