SLUMP PERIODS

New Zealand Herald, Volume LXXIV, Issue 22860, 15 October 1937, Page 13

SLUMP PERIODS

ADJUSTING PKODTJCTION ' * MINISTER'S CONTENTIONS MORE GOODS FOR OWN USE [BY TELEGRAPH—SPECIAL REPORTER] WELLINGTON. Thursday The feasibility of balancing production and exchange in order to overcome periods of slump was discussed by the Minister of Finance, the Hon. W. Nash, during his reply to the second reading debate on the Annual Taxing Bill in the House of Representatives hist night. Opposition members had pointed to the inevitability of trade cycles, Raid Mr. Nash, and had stated that taxation should be adjusted to meet them. If overseas prices for the Dominion's exports fell and the price of overseas goods remained constant, then fewer commodities could be obtained in exchange from overseas and at that point the standard of living of the country would be affected. However, where the previous Government erred during the depression was when it failed to increase the internal production of commodities which had to be imported. Overcoming Difficulties

"If we accept in its entirety the suggestion that slumps and booms are inevitable," Mr. Nash continued, "it means that as the y.ears pass we must come to the point periodically where people starve. That places a limitation on the human outlook, vision and brain capacity that is unjust to man's intelligence." I am certain that, with all the difficulties to be faced in balancing over a period of years producion and exchange, it is not beyond the power of human achievement to bring into being when slumps do come such factors as will ensure that no one should go short of the things that can be produced m this country. " The indictment against the last Government was that although it had difficult circumstances to face it allowed circumstances overseas to destroy the production facilities of this country. More Goods Sent Overseas The Rt. Hon. J. G. Coates (Opposition—Kaipara) : We produced more and more. _ , "We produced more of the we were going to send overseas,' said Mr. Nash, " but the more we sent overseas the less we got for it. That is inevitable inside the existing economy. What we did cease producing here were the goods required in this country and capable of being produced out of our own resources. In such circumstances, and as long as we have a supplv and demand market, if we produce and export more than can be absorbed by the reduced purchasing power of the people overseas, prices inevitably will fall, not to the extent of the reduced purchasing power, but to a calamitous extent."

Producing More For Home Needß Mr. H. S. S. Kyle (Opposition— Eiccarton): You are still telling the farmers to produce more. " Not to produce more for the people overseas," replied Mr. Nash, " but to produce more for our own people, to produce more. also to send overseas to pay for what we want from overseas. This Government says there is no need to reproduce the circumstances which existed here from 1931 to 1935." If prices fall, Mr. Nash added, the Government would not do what members of the Opposition had done when thev were the Government. If a fall took place which automatically affected the income of the country the Government would insulate it as far as P os ~ sible and at the same time set about maintaining the production of everything necessary for an adequate | standard of living.