EVENTFUL YEARS

Otago Daily Times, Issue 22717, 1 November 1935, Page 14

EVENTFUL YEARS

WORK OF COALITION GOVERNMENT FIGHTING THE DEPRESSION QUESTION OF MEAT EXPORT ADDRESS BY MINISTER OF PUBLIC WORKS One of the largest audiences that has been seen at a political meeting in Waimate for a good many years greeted the Minister of Public Works (Mr J. Bitchener) when he delivered an address in the Olympia Hall on Wednesday night. There was a complete absence of interjections, and the Minister was given an attentive hearing throughout the duration of his address, which was devoted largely to a survey of the steps taken by the Government during the past four years to combat the depression in New Zealand. The Minister opened with a reference to the difficulty in which the United Government found itself in 1931, and as a result of which the co-operation of the other parties in the House was sought with the object of forming a National Government. Eventually a coalition was effected between the United and Reform parties, he said, and at the 1031 election the Coalition asked for the confidence of the people and for the opportunity to stem the tide of depression in New Zealand. The country had demonstrated its confidence in the Coalition by returning it to power, and he felt that the time had now arrived to tell the people just what had been done. There was no doubt whatever that at this election the Government could go to the couutry with absolute confidence for it could certainly be proved that it had faced its responsibilities, with the result that, unpalatable as some of its efforts might have been, New Zealand was now emerging from the most difficult period of its history. REDUCING COSTS Justifying the action of the Government in reducing wages and salaries and in cutting down expenses in other directions, Mr Bitchener said that what had befcn done was only what any prudent man or woman would have done under the circumstances. Any person who found himself with a reduced income to carry on his work would have deme exactly as the Government had done. The worst of the slump period was now well behind, and as a result of the careful and prudent action of the Government during that time, it had been able last year, and again this year, to make restorations in the salaries of the civil servants and in other directions, and this action had been followed by local bodies and private business organisations throughout the country. It could be said to the Government's credit, moreover, that it had come through the depression with the National Debt less than it was in 1931. TRADE PROBLEMS The Minister referred to the oft-re-peated statements of members of the Labour Party that New Zealand could produce enough to satisfy all its requirements without having to be too much concerned about its export trade. That, he said, was a wrong view to take, for while it was very desirable to- foster the internal trade, New Zealand must rely for the greater part of its income on its exports. The volume of exports had grown very much during the past year or so and, in fact, during the worst of the slump period, but the difficulty was that while there had been an increase in volume there had not been a corresponding increase in real value. " The first real problem that faced us," said Mr Bitchener, "was that of our exports to Britain, for Britain is undoubtedly our' main avenue of trade, and new markets are not available. It is not possible to set up an export trade with a country without taking some of that country's goods in return. It has been urged frequently in the House of Representatives and elsewhere throughout the Dominion that we should endeavour to open up markets in the Far East, but that again is a matter that must be considered fronr both points of view. I question very much whether we want a great deal of the commodities that are produced in the Eastern countries with which we have been urged to trade." Continuing, the Minister referred to the matter of Freetrade within the Empire. "If this were allowed to come about," he said, "a great many of our industries would go out of operation, for other countries in the Empire would be able to beat us in our own market. Where would our secondary industries be then? The lifeblood of the Dominion is its export trade, and as our best cus-' tomer by far is Britain we must do our utmost to preserve the market that we have there. In this connection I wish to refer to the Ottawa agreement, which has been of inestimable value to New Zealand, for it has established the principle of preference to countries within the Empire.' At Ottawa a five-year _ agreement was made with Great Britain, and although the United Kingdom restricted meat imports, those from South America, one of the strongest competitors, were restricted far more than those from the dominions. At the same time, foreign dairy produce and fruit were subjected to a tariff, but the dominions were exempt from such a tariff or from any form of quantitative restriction until August of this year." EXPORT OF MEAT Discussing the recent conversations in London concerning the importation of meat into Great Britain, Mr Bitchener said that for nearly two seasons the New Zealand meat industry had been carrying on under the fear of quotas or levies or both, and for most of that period exporters had been working under quarterly agreements—a most unsatisfactory arrangement. Early in the present year New Zealand was faced with Great Britain's proposals. Broadly speaking, these were to impose a _ levy on all meat imported into Great Britain for the purpose of subsidising British beef producers. the alternative being a drastic quota on meat imports. At the same time the British Government had made it clear that countries of supply must, in their own interests, arrange among themselves for restrictions in their shipments in order to keep prices at a remunerative level. New Zealand was thus in the position of having to choose between a levy, which would press more heavily on her than any other dominion, and a quota, which would drastically reduce her exports to the United Kingdom. What had been achieved by the New Zealand delegation to London was that the United Kingdom had undertaken that no levy or duty should be placed on New Zealand mutton or lamb. Instead of quarterly agreements, which were most unsatisfactory, New Zealand had now, in the case of mutton and lamb, an agreement for the supply of satisfactory fixed quantities until the end of 1.936. Continuing, Mr Bitchener said that Australia had sent Home a huge delegation about a _ month before the departure of the New Zealand party, and if the Australians had been successful in securing what they were after New Zealand would have been in a very poor position indeed. "Australia was not worrying about a levy," the Minister added. " She would have been quite willing to have a levy imposed on her exports to Great Britain, but that would have been disastrous to New Zealand. And that was just the position that was averted by the excellent work done by the New Zealand delegation. As a result of the efforts of the Prime Minister, Mr Forbes, and the Minister of Finance, Mr C'oates, we are now in a better position regarding the export of meat to Britain than for many years past, and we are likely to remain in that fortunate position "for some time to come. The British Government promised that it would not complete any meat agreement without consulting New Zealand. The few pounds we spent in sending that delegation to Great Britain have been repaid more than tenfold by the advantages we have gained, and if similar benefits can be secured in the future the exj. »nse of any further delegations will be well warranted. —Applause.)

EXCHANGE RATE Dealing with the matter of exchange, the Minister said that the raising of the rate was a means of grappling with the problem of the declining prices for primary produce. The main object of the move w-as to increase the national income. The raising of the exchange enabled the income from farming, the basic industry, to be increased, thus permitting the Dominion to weather the storm that threatened to wreck it, for without a healthy primary industry the whole couutry would have been reduced to bankruptcy. It had also had the effect of preventing further deflation and of bringing about greater stability in internal price levels. The effects of the raising of the exchange rate might be summarised as follows: It had raised farm receipts in terms of New Zealand currency and had enabled farmers to remain on their land. It had stopped deflation and had expanded the national income (and conae quently the spending power of the peop'.ej by at least £10,000,000 per annum. It had contributed to increased business activity. It had ensured that the value of securities was maintained. It had permitted an increase in public revenue by increasing the taxable capacity. It had not raised the cos-t of living. It had decreased the burden of internal debt. THE UNEMPLOYMENT POSITION Referring to unemployment, Mr Bitchener said that this problem had been dealt with in New Zealand as well as or better than in any other part of the British dominions and with less burden to the people. *' I know," he said, " that there is a good deal of genuine poverty in New Zealand, but the Government has done its utmost to better the conditions of the poorer people. We have not attempted to overcome the difficulty by borrowing huge sums and thereby adding to the burden of the public debt, but we have taxed the people with the incomes to try to provide work and sustenance for those who, through no fault of their own, have found themselves without employment. Although it has- been difficult the Government has honestly tried, particularly in the largo centres of population, to find work for the unemployed, and we derive some satisfaction from the knowledge that as the result of our efforts in this direction we have created an ascet that New Zealaud will be proud to have in the future. Apart altogether from what has been done in the past we have in hand a programme of long range work which will be of benefit to the unemployed and to the country as a whole." EXTRAVAGANT PROMISES The Minister warned hie hearers not to be taken in by the extravagant promises being made by the Labour Party in its guaranteed prices scheme. " Neither Mr Savage (the Leader of the Labour Party) nor any of his followers," he said, " think they have any chance this side of the grave of putting their guaranteed prices scheme into operation, and even if they had the chance they could not do it." One Labour member had said, Mr Bitchener continued, that the farmers would not be allowed to produce as much as they liked, but would have their rate of production restricted. How many of the farmers of New Zealand would stand for that? Another Labour man had said that to bridge the gap between the actual market price of the produce and the guaranteed price the money would bo taken from those who had it. That, also, was an ominous statement. The great question with guaranteed prices was -o find the money to finance the scheme, and it could be fairly estimated that it would cost the country about £30,000.000 a year to put it into operation. The present Government had raised the price to the primary producer by raising the exchange rate, and even though some of the city people might be inclined to cavil, he wis certain that they, too. had received their share from the extra money that came to the primary producers. MONETARY POLICY A great deal of criticism had been directed at the monetary policy of the Dominion during the past few years-, said Mr Bitchener, and while it was not, perhaps, claimed that the present policy was perfect, it was the best one available. It would be advisable to have a system that was based to a greater extent on the value of goods produced in the Dominion, but until that was done the present policy could not be departed from. There was no sense in changing the system until a better one could be found. PROTECTION OF WHEATGROWERS The Minister referred to the proposal of the Democrat Party to abolish the wheat duties. "I want to tell the farmers." he said, /'that the enemy is at their door. For many years I have taken part in the fight to put the wheat and flour duties on a satisfactory footing, and there is no doubt that the sliding scale of duties is the most satisfactory to the whole of the people of New Zealand. Bran and pollard are admitted duty free, and now the Democrats want to raid our wheat industry. It would be a sorry day for the east coast of the South Island if that happened. If we allowed free trade from Australia and thereby left our wheat industry unprotected the result can well be imagined. And yet some people would take that protection away. If our farmers had to go out of the wheat industry as the result of this commodity coining into the country duty free, it would mean that another million lambs would have to be raised every year. A large amount of money is circulated in the Dominion each year as a result of the magnitude of the wheat industry, and the same amount could not be circulated if farmers who now grow wheat were forced to go into the sheep-raising business. We must keep the enemy of the wheatgrowers out of Parliament, and that enemy is the Democrat Party." QUESTIONS In reply to a question whether he thought 12s a week was too much for a single man on relief work to be paid, the Minister stated that to his knowledge there were no single men on that wage. The men in camps received 15s per week in addition to having everything provided. Another questioner asked the Minister whether he thought that bridge-building by the Public Works Department was preferable to having this work done by contract, particular reference being made to the bridge to be built over the Molyneux River at Clydevale. " The department had no objection to the bridge being built by contract," replied Mr Bitchener. "but the reason that we are building it is because the contributing local bodies that we should do so." The Minister was accorded an enthusiastic vote of thanks and confidence at the close of his address.