A QUESTION OF BALANCE

New Zealand Herald, Volume LXXV, Issue 23101, 28 July 1938, Page 12

A QUESTION OF BALANCE

In order to dispose of the advice of the Reserve Rank board that public works programmes should be designed to reciprocate with the state of production and industry, the Prime Minister has raised the depression bogey. ITe says emphatically that he "cannot agree with the idea of holding up public works in anticipation of a slump." But that was not the idea expressed by the board. Its plea was that public works should be used as a balancing factor in the national economy, being accelerated or slowed down according as employment in other spheres became slack or plentiful. In fact public works could be used as a useful makeweight in achieving that balanced economy which is supposed to be part of Labour's policy. It. is the principle professed in respect to industrial and transport licensing and it was the principle behind the guaranteed price system until the means of balance in the surplus were dispersed. Regulation of exports and orderly marketing represent applications of the same idea. They are not condemned as measures taken in anticipation of a slump but as eominonsense planning. Why should the same principle not be applied to public works, instead of the (Jovernment's method of glut, which may precede scarcity? Mr. Savage himself admits that "we must keep a commonsensc balance in our productive and general developmental agencies." Let him consider, therefore, the effect of Mr. Semple's vast programme in diverting labour from production on the farm to works of dubious value. Let him consider, also, tlie effect of the millions being lavished on public buildings in diverting labour from housing, raising the cost of materials, and prolonging the shortage. And then let the Prime Minister reconsider the whole question of balance and whether he is not, by works and other policies, causing dangerous shifts in this country's economic equilibrium.