THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, SEPTEMBER 27, 1938 INSULATION IN ECLIPSE

New Zealand Herald, Volume LXXV, Issue 23153, 27 September 1938, Page 10

THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, SEPTEMBER 27, 1938 INSULATION IN ECLIPSE

Plans to insulate New Zealand from the effects of overseas market fluctuations were to have formed the chief plank in the Labour Party's platform in the current campaign. Speaking in the House of Representatives a few weeks ago, Mr. C. R. Petrie said these plans would "be the main issue placed before the people at the coming general election." In of many challenges, however, Labour declines to disclose the plans although the Prime Minister said six months ago that they were all ready. In fact Labour has soft-pedalled on the theme in recent weeks. Has the secret formula for insulation been lost ? In the party's 28 policy points as published, the subject is not once mentioned. Apparently it is not considered worthy of a nomination even in a field of 28. It is true that passing reference is made to the subject in the preamble to the party's policy, mixed up with and overlaid by the usual mumbo-jumbo about national economy, balanced economy, promotion and expansion of industrial activity, organising internal economy, standards of living, guaranteed incomes, regulated marketing, currency and credit control, maintenance of purchasing power, redistribution of income, labour power, requisite raw material and capital equipment. If somehow a superman like Mr. Nash can combine all these abstractions in the right proportions, then, Labour's manifesto cheerfully asserts, "there is no insuperable obstacle to the full utilisation of those resources, irrespective of overseas conditions."

From all this the people can judge how near (or how desperately far from) the Labour Government is to making New Zealand independent of overseas market fluctuations. It has no plans and it is therefore useless to . ask for them. As much was admitted by the Prime Minister in his policy ' speech at Wellington. Mr. Savage wistfully reflected that "the farmer should not be dependent on the > fluctuations of overseas markets" and went on sadly to speaic of the "economically impossible." These are sobering admissions from the bold leader who is accustomed to declare: "Nothing will stop us." "We are going the whole way." "We're the Government, aren't we." But actually Mr. Nash is the high . priest of guaranteed incomes and prices in the balanced economy he pictured in his 1935 pre-election pamphlet, "Why and How?" His questions still echo down the years, unanswered. Mr. Nash has had to admit failure by refusing to pay the dairy farmer a price that will cover cost of production as determined by the advisory committee. To do so would wreck the scheme, he says, by piling up heavy deficits. In fact he admits he must, in fixing the buying price, be governed by the selling price, and thereby confesses . he has not achieved that independence of overseas fluctuations he ' thought and promised to achieve. Now the difference between Mr. Nash's and the committee's price was .87d per lb. butterfat, equal to £1,289,000 on the season's production. Yet a man who talks largely about making money available and using the public credit, a man who does in fact control currency and credit in New Zealand, baulks at paying the dairy farmers their full costs, forcing them to produce at a loss, because he dare not raise their guarantee by seven-eighths of one penny. "It will wreck the scheme." When such a comparatively small measure is found impossible, it is vain and idle pretence to assert that the major economic operation of complete insulation can. be successfully performed. If farmers could be protected by the Government from market vagaries, no doubt they would have been saved from the drop of over £6,000,000 in last season's wool cheque. But the farmers had to bear the loss because the Government was impotent. Apart from this major market, the Government could not save them from the effects of recession on a dozen by-products—-hides and skins, casein, tallow and sausage casings and so on. Even when it came to smaller items like potatoes and grapefruit, the growers were left to carry heavy losses. And if New Zealand were to insulate or cut herself off from the outside world, she would have to make herself self-sufficient in a great many respects. Suppose she decided to make the cut and do without such things as petrol and motor-cars, rubber goods and tea, cinema films, silks, most books and so on ; suppose New Zealand decided for the sake of insulation to lower her living standards and live a simpler life, she would still require bare necessities, and the first of these is bread. For a generation various Governments have sought to mako the Dominion independent of imports in this eimple essential and have pampered and subsidised the wheat growers in various expensive ways. Yet in most years New Zealand's harvest falls below New Zealand's needs. This year all Auckland's requirements and most of the North Island's are being drawn from Australia. If a generation of spoon-feeding the growers has not made New Zealand self-sufficient in respect of a simple crop like wheat, with which many other countries are at present overstocked, what prospect is there of complete self-sufficiency as a prelude to complete insulation? The people i can judge from the examples before them. Depressions can be cushioned by building up reserves in good 1 years against the bad, but that prudent policy is scorned by the i Government. And now it is singing small about insulation because'the time has arrived for producing plans, : and the Government haa no plans.