EMPLOYERS' VIEW

New Zealand Herald, Volume LXIX, Issue 21346, 22 November 1932, Page 11

EMPLOYERS' VIEW

PIIOPOSAL CONDEMNED

"RUIN TO THE COMMUNITY"

THE POSITION # IN AUSTRALIA

"Speaking on behalf of the Auckland Employers' Association," said tho president, Mr. Albert Spencer, yesterday, "a strong protest should bo made by merchants antt manufacturers against this clamouring to force the Government to raise tho exchange to a dangerously high level. If passed it would shake the foundations of the whole of our business structure. These politicians have no conception of tho ruin they may cause to the whole community. "If high exchange rates came into operation only a small section of the farming interests would benefit, and it is doubtful if they would gain anything. Most likely tho money which is owing to tfio banks by the farmers would bo taken to reduce their overdraft, and 110 extra money would go into circulation. If this insane political measure was forced on to tho Government tho results would bo disastrous to tho whole of New Zealand.

"Our imports would receive such a check that they would entirely cease, causing widespread financial disorder and greatly affecting our relations with Great Britain. With the stoppage of imports our revenue from this source would shrink to nothing. Revenue the Government must have, to carry on tho services of the country, pay wages, etc. Higher Freight Rates

"All ships arriving from England would havo no cargo, and empty ships mean no freights. The shipping companies cannot afford to run their ships for nothing one way. Farmers would have to pay increased freights on all their produce shipped to London, and this extra freight would swallow up the benefits received from high exchange. "Tho Government, which must have revenue to replace thello s of duty on imports, must seek other means of raising revenue, and would naturally turn to tho farming community—which had forced its hands—to find extra revenue. Perhaps a tax of 10s an acre on all farm lands would be a possible solution, for revenue must be secured if this suicidal exchange is forced on to the community. Factories and industries operating throughout New Zealand, importing their raw material, would be forced out of business. They could not possibly carry on under tho crushing burden, and thousands of hands would be thrown out of employment. "It would havo a ruinous effect on local bodies and others, which would havo to find huge sums of money when remitting their interest on their loans to London. It would spell ruin to these bodies, which all depend on the ratepayers, and most of the ratepayers are tho business community who cannot pay. The Government would find that all taxpayers have no income left to pay taxes, and next year it is certain that the Government will receive less from income tax. Furthermore, ifc is generally known that the Government is in a desperate financial position, and unless the business community can make money the Government will draw a blank. "Plunge Into Chaos" "It is inconceivable that the Government will be forced to take such drastic steps, which would plunge this country into a state of chaos. Let the old law of supply and demand operate, and it is to be hoped that the Government "will take no hasty action, but wait calmly until its chief financial adviser arrives from London.

"It has been stated that Australia has benefited by high exchange, and in consequence taxes have been reduced. The reduction of taxes recently passed has been a political move and cannot possibly last. The enormous cost of remitting interest on loans has proved an intolerable burden, also the internal costs have proved a financial disturbance to tho whole community. Australia is a long way from economic health.

"Even tho present rate of exchange is not justified in view of our favourable trade balance of exports over imports."