TRADE PLAN

New Zealand Herald, Volume LXXV, Issue 23215, 8 December 1938, Page 17

TRADE PLAN

' LOCAL EXPANSION LABOUR'S GOAL jib,, savage Explains gfO DEFLATION POLICY [BT TELEC.K ATTT —TRESS ASSOCIATION] WELLINGTON, Wednesday The Government's financial and industrial policy was explained by the Prime Minister, Mr. Savage, in a broadcast address to-night. "I would like to sav that first, and foremost it is the aim of the Government to build and maintain the standard of living of all New Zenlanders," Ivi said. "It is no use trying to lift our standard of living tinder the old economic system of go as vou pleaso and tho devil take the hindJflOflt. "In tho past New* Zealand has depended on expanding farm production and expanding markets overseas. This has had the effect of developing our rich farmlands, but it has also meant that we have been more subject, perhaps, than any other country to alternate booms and depressions, with great poverty and unemployment. Without control over our overseas trade we just cannot protect ourselves. Supplying Needs Locally "Now we are taking the second 6 tep," Mr. Savage continued. "Whenever overseas prices have fallen we have had to go without goods from abroad and wo have not been able to supply them from our own production. The second step obviously is to make these goods ourselves. This cannot be done all at oncc.

"While we have our first dtftv to our sirn people, we also have obligations to Great Britain, and these will never be lost sight of by the Government. We have repeatedly assured the British Government that we are prepared to buy from them to the full extent to wliich they buy from us —that is, after our debt services have been met. There has never been any question concerning the payment of interest on our debt service.

Selection of Imports "It is pn the trading side we are adopting a new policy. We want to increase our trade with Great Britain. To the extent that we are able, we want to spend every penny of the sterling proceeds of our exports 011 bu.\ing British manufactured goods. The only sensible way is to select the goods we want to buy from Britain. It is all a question of scientific selection of lmP °' r, This same method of import selection is the most effective way of building up our own industries. We are going to give New Zealand manufactured a definite market if /hey can turn out goods. To, the extent that thev cannot, we will import goods from abroad. I want to say most emphatically that what we arc introducing is not a barrier but regulative procedure. "Money Quite Safe" "Now I wish to say something about the exchange position. Each year we receive from our exports a certain amount of sterling money. This is iisett to pay interest on our overseas debt to provide debt repayments to.pay freight on our exports an^/" ,ports ' to pay for our imports, and to pay the expenses of New when abroad. Also, when peop to transfer money abroad they use up New Zealand's sterling monw to do this; in fact, these people can, by send ing unusual sums abroad, use p money we require .to P a , necessary imports.\. . . • + . , "This is the latest model Patriotism and it is as foolish as it w un necessary, because money is q , ' here I have given word °f honour to the people that their interests will be safe. That pledge stands. Uncertainty Abroad "Perhaps I could sum up in this way,®S Mr. Savage. "We are faced with this position. Inere is , de lff a l ß J°3 and uncertainty of a most ominous kind Overseas. We have to defend o . try in more ways than one. W. to keep depression, poverty and want out for one thing, and we c a« * We are not ;to follow called orthodox method of deflation. That policy means the curtailment, ot - public works, with unemployment .and reduction in wages. Ours is a pos plan to maintain a high standard living. Real Development "There is no reason whatever for any anxiety about the present and economic and financial condition ot ± - Zeilancl," concluded Mr. Savage. • I have said time and time again, • Government will never ]Vf .. tackle difficulties. Even though - remedies may mean an adjusting methods, the principle of our obj.. fill not bo altered. We place in w forefront of aims and achievements the security of the people. Men, womei and children are more important to the nation than profits. , . 'i, "It is the duty of all to strne hard for real economic development ana expansion. Wo must not be content with experiments in social welfare, w must also excel in individual and collective effort to make this little country a great nntion. , , ~ . ~ _ . I should also mention that it is the Government's intention to issue an internal loan to meet capital expenditure "connection with railway and electrical equipment and other public forks. The Government's policy is to the credit and provide an opportunity for patriotic Isew /iea«nders to invest their savings in tne development of the Dominion s re Purees-"