THE OTAGO DAILY TIMES FRIDAY, JUNE 9, 1933. LABOUR AND THE DEPRESSION

Otago Daily Times, Issue 21975, 9 June 1933, Page 8

THE OTAGO DAILY TIMES FRIDAY, JUNE 9, 1933. LABOUR AND THE DEPRESSION

The electors of South Dunedin who were led to believe that Mr Peter Fraser, Labour member for Wellington Central, would expound to them on Wednesday night a policy under which “ prosperity for all " would be brought about have cause for disappointment. They were regaled with a. rechauffe of the generalities which serve as the policy of the Labour Party in relation to the existing situation and were left to form their own inferences concerning the precise nature of that policy, as intended by those who have framed it. Mr Fraser expressed gratification at the proposals, apologetically submitted by the Mayor of Auckland to the Acting Prime Minister earlier in the week, for the flotation of a gigantic loan, to which subscription would be compulsory on the part of those who are assumed to have funds for investment. It is not, as we understand it, by the form of inflation which was suggested at Auckland that the Labour Party aims at treating the economic ills of the country, but Mr Fraser personally would not hesitate to accept a loan proposal, regarding it, as he does, as merely a variant of the policy of his party. To embark upon a programme of heavy borrowing at a time when the country is staggering under the weight of the existing indebtedness would be to provide a fresh version of “ the rake’s progress.” That, however, would be entirely consistent with the attitude which the Labour Party has adopted in the past few years. Mr Fraser was applauded by the less intelligent members of his audience at South Dunedin when he said that “ all thinking persons in Dunedin and in the Dominion were agreed that the wage cuts, deflation, reduction of pensions, and reduction of social services were a great disaster and a grievous mistake, and had made conditions much worse.” We cannot pretend to know the means by which Mr Fraser professes to know what all thinking people in Dunedin and in the Dominion are agreed upon, but there is not the slightest ground for giving any credence to his statement. All the most thoughtful people in the have been forced to the conclusion that, however regrettable a policy of retrenchment may be—and no one can have any satisfaction in the reduction of salaries and wages and pensions—there was no alternative if the country was honestly to pay its way. The policy adopted in New Zealand was the policy adopted in most countries. But not in all. It is not necessary to look far afield for the example of a country that endeavoured to apply the policy which the Labour Party in New Zealand favours and for the illustration of the disastrous effects of an attempt to maintain the cost of government at a level that was not justified by the economic conditions of that country. It took less than two years’ experience of the policy of the Labour Party under Mr Lang in New South Wales —with its deplorable record of repudiation of public debt, punitive taxation, crippling of industries, closing of the State bank to which were entrusted the savings of the workers, and flight of capital to other States —to demonstrate conclusively that a Government must be guided in matters of finance by the same principles as apply to an individual, and that it is suicidal for it to live beyond its means. If the Labour Party had been in power in New Zealand when the catastrophic fall in prices occurred that has so greatly diminished the national wealth, and if it had attempted to apply the policy which Mr Fraser recommends, the country would inevitably have been faced with the prospect of national bankruptcy with consequences far more serious for all its people than any they have suffered.