Family Budget

Northern Advocate, 25 August 1948, Page 2

Family Budget

New Zealand-made goods might be expected to fall in price from 5 to 10 per cent, depending on the imported content, but manufacturers would have to meet much sterner competition from overseas, especially from Australia, and many New Zealand manufacturing industries would only be able to continue if their Australian competitors were locked out. So far as the family budget was concerned, there would be no reduction in bread, butter, rent, coal, gas electricity, wood, clothing, housing milk, eggs, sugar, tea, meat, transport fruit or vegetables. Imported boots and shoes that were allowed to come into the country would be about 20 per cent cheaper and would provide substantially stronger competition for local manufacturers. The test was. however, would such goods be allowed to enter the country in greater quantities? The gold industry would face a big cut in income, and it was feared many of the claims on the West Coast would cease operations. The tourist industry would be hard hit. especially in view of Australia'; refusal to follow the New Zealand decision to lift the exchange rate.

New Zealand already had an adverse trade balance with Australia of £lO.000,000, and now stood a very good chance of losing the trade she had. Mr. Holland said it was impossible tc consider the exchange situation without also considering another factox - — inflation, which was New Zealand's greatest and most urgent present-day problem of finance. Whatever might be accomplished by exchange adjustment, could and probably would be cancelled out by inflation.

The Government had done nothin? about curbing inflation, mainly for the reason that the Labour Party expressed opposition to the Minister of Finance by not agreeing to piece-work incentive payments or other schemes unless bv agreement between union and employers. As an anti-inflation programme. Mr Holland suggested that Government expenditure should be overhauled and waste and overlapping cut out; more money should not be created when wc already had far mere money than goods; while export prices were low in relation to import prices, overseasdebts should not be paid oil when wc could conveniently renew them: schemes of incentive pay should be introduced to encourage more production; taxation should be reduced tc encourage the ploughing of profits back into industry for expansion and development; people capable of work should be encouraged to continue in productive employment by higher benefits when they did retire; permissible income earned by social security beneficiaries should be increased. (NORDMEYER’S REPLY —PAGE 3)