NEED FOR ACTION

New Zealand Herald, Volume LXXIII, Issue 22406, 30 April 1936, Page 13

NEED FOR ACTION

PRICE FLUCTUATIONS OBJECTS OF LEGISLATION BALANCED ECONOMY WANTED [BY TELEGRAPH —SPECIAL REPORTER 1 WELLINGTON, Wednesday The necessity for a balanced economy in New Zealand was stressed by the Minister of Finance, Hon. W. Nash, in opening the second reading debate 011 the Primary Products Marketing Bill before crowded galleries in the House of Representatives to-night. He claimed that the bill before the House, with its provision for the payment of a guaranteed price to dairy producers, would be a first step toward such a balance. Mr. Nash opened by thanking those who had given him extremely valuable help in preparing his proposals during the last few months, particularly members of his own staff and of the statf of the Minister of Agriculture. Ho a so paid a tribute to the co-operation he had received from members of the Dairy Board. He would not have been able to face the House with his proposals had it not been for the assistance of men who had given the benefit of their knowledge and experience to work out what was hoped would be the best policy for New Zealand and lor the New Zealand dairy farmer in particular. Fall in Imports and Prices The bill, Mr. Nash continued, had potential associations with the Government's credit policy, matters of overseas marketing, mortgages, land values and the ultimate aim of a balanced national economy. Mr. Nash submitted that during i;he last six years there had been a material reduction in the standard of living in New Zealand. This was measured by the reductions in imports of gooJs generally considered necessary for a decent standard of living.

Figures showed that in 1933, as compared with 1929, the Dominion had imported 20 per cent less sugar, 33 per cent less fruit, 76 per cent less motorcars and 80 per cent less cotton goods. Such a result, he said, could not have come about under a properly-balanced economy.

The following prices for butter-fat over a long period were quoted by the Minister:—l9o4-5, 91d per lb.; 1913-14, 12d; 1917-18, 24 Jd; 1920-21, 33d; 1930-31, 12* d; 1934-35, 8.94 d. Those figures, he said, were sufficient to show the fluctuations in prices. However, from 1911 to 1921 production in New Zealand increased from 300,000cwt. to 900,000cwt. Although production increased threefold the total returns were multiplied seven and a-half times over that 10-year period, and in the same time land values rose by £133,000,000. During the next decade the total quantity more than doubled, but the actual cash received was £'500,000 less. "Unparalleled Lack of Vision"

"Is it possible for the most competent manager of a producing agency to take those years and decide on a balanced economy when faced with fluctuations of that type?" Mr. Nash asked. "The result of the decline in values between 1929 and 193-1 is shown by the fact that 19,501 applications for relief have been handled by mortgage adjustment commissions. All those applications have a tale of tragedy to tell. During the last six weeks I have received in my office 258 letters from people who, even with the adjustment provisions, are still in difficulties. "The whole position shows an ineptitude and lack of vision unparalleled in history. Unless we can see our way through -the potential production of the Dominion and the necessary consumption we shall fail miserably. Wo have failed so far. I am hoping that with the step we are taking to-night we shall be able to go some distance along the road."

Check on Specula lion Mr. Nash said that if land values improved because of the policy and activities of the Government then those enhanced values must go to the people and not to speculators. That was inevitably linked up with the procedure it was proposed to follow. New Zealand was one of the last countries to take action in the way of control with a view to overcoming existing difficulties. Managed economies were already operative in many other countries. The Argentine, the United States, the United Kingdom, Poland, Spain, Turkey, Sweden and Russia were countries in which there was operative some form of organisation for the control of the commodities they marketed. • As an indication that farmers were unable to find a market for their products Mr. Nash quoted a statement from a recent book by Sir John On; in which ho stated that 22,500,000 of the 40,000,000 people in Britain were not getting enough to eat. A member of the British House of Commons had wanted to establish a war food plan so that the people of Britain would have enough to eat in wartime, but why not do it now ? It was obvious there was a shortage of food in Britain. Mr. H. G. Dickie (Opposition— Patea): They never consumed so much in the history of the country. The Duty ol the State

"No other country in the world," Mr. Nash continued, "has resources untapped to the degree New Zealand has and yet our difficulty is not to utilise our resources, but to find a market when we Lave utilised them. Ihat is the origin of the bill which is inextricably wrapped up with production, incomes and land mortgages." Mr. Nash said the future of this country depended for some time on the proper utilisation of its resources and it was the duty of the State to see that the farmer received a decent price for the work he did. The first step to take to ensure that he received an adequate remuneration was to protect him from fluctuations and the Government knew of no other way than to buy his products. The present legislation applied only to products of the dairy industry, added Mr. Nash, but it could be extended to other products at the appropriate time. Too much of the wealth of the country went to people who were clever and the Government was anxious to see that a larger return from the sale of the products went to the people who diil the work.