FINANCE AND CONFIDENCE

New Zealand Herald, Volume LXXII, Issue 22260, 7 November 1935, Page 12

FINANCE AND CONFIDENCE

A true word was spoken by Mr. Coates yesterday when he asserted that the main attack on the unemployment problem must be in the direction of encouraging private employment. While electors approve the policy of placing men on public works under standard labour conditions, the more thoughtful realise that this method offers no permanent cure of a wasting social disease. The point is illustrated on a large scale in Germany, where Herr Hitler claims to have reduced the unemployed from 6,000,000 to 1,700,000. Without disputing his figures, competent observers point out that the Nazi achievement has largely been made possible by the lavish and, indeed, reckless expenditure of vast sums by the State on rearmament and public works in various forms. By these means the unemployment problem has been shelved but by no means solved. The day of reckoning cannot be postponed indefinitely and may arrive very shortly, when the need of funding the mass of German floating debt can no longer be denied. The United States must soon face the same difficulty. In New Zealand, as Mr. Coates was able to show, the Government has not loaded future recovery with past debts for relief. Current income has been drawn on to relieve current distresses at a scale that compares more than favourably with relief scales in any other country. In the last four years probably no other country except Britain and South Africa has done 'so much with so little recourse to borrowing. In Australia, both State and Federal Governments have supported their Budgets by repeated loans, a feature that also marks the public finance of all the great nations except Britain. Despite this financial abnegation, New Zealand is one of the few countries in the world that can show a balanced Budget. No doubt the fact that she' is further on the road to recovery than other countries, with two or three exceptions due to special circumstances, is largely attributable to the careful handling of her public finances. Confidence has been largely restored, a factor that more than any other is going to influence the increase of private employment, the decrease of unemployed rolls. Opposite policies, polieies involving borrowing or so-called ea,sy money, policies that have been tried and found wanting in other countries, are being offered by the Democrat and Labour Parties. The electors should ponder carefully before accepting these offers at their face value and so nipping in the bud the growth of confidence induced by sound finance.