DUNEDIN NORTH SEAT

Otago Daily Times, Issue 22717, 1 November 1935, Page 7

DUNEDIN NORTH SEAT

MR A. S. FALCONER'S ADDRESS DEFENCE OF THE GOVERNMENT CONSTRUCTIVE POLICY FOR THE FUTURE A large audience gave a warm reception to Mr A. S. Falconer, the National Government candidate for the Dunedin North seat, when he opened bis campaign with an address in the. Coronation Hall, Maori Hill, last night. Mr J. M. White presided. The chairman, in introducing the candidate, referred to Mr Falconer's war record, stating that this suggested to anyone accustomed to military training efficiency in organising work. Mr Falconer had accepted nomination purely from a sense of duty. He had served the Dominion in the past with great credit, and he now placed himself in the hands of the electors of Dunedin North so that they might say whether he was worthy to represent them in Parliament.

Mr Falconer stated that the attendance of his audience was an indication of the interest at present being taken in national affairs, and a reflection of the keenness of the contest in the North Dunedin electorate. Where candidates representing three distinct political parties were in the field, it would be his aim to fight the campaign in a dignified manner, avoiding personalities, and to do his part in placing politics on a higher plane,— (Applause.) The aim of every elector on November 27 inext would, no doubt, be to return to power that party which in his or her opinion sponsored a policy showing the greatest promise of restoring prosperity to the Dominion. Having regard to this aim, it would appear to be the duty of everyone to consider seriously the position as it existed to-day, profiting by experience during the past four years, assessing future prospects as far as they could be envisaged, end carefully examining the policies of the three parties. Briefly, then, this was their object. He proposed to turn to some of the considerations affecting the attainment of that object. To secure really favourable economic conditions involved the recruiting of complicated and diverse remedies. _ Before attempting to apply the remedies it was only common sense to endeavour to appreciate the whole problem. First, they had the world-wide depression, which reached New Zealand in 1928, and from which the country had suffered since, although there were now apparent definite signs of improvement. In Great Britain, under a National Government, the recovery had been phenomenal, and, if past history was any indication, New Zealand could' look forward to a reflection of that recovery in the very near future. CHANGING CONDITIONS " It has been stated," Mr Falconer continued, " that we stand on the' threshold of a new economic era. Whether thiß itj or is not correct, conditions are certainly changing rapidly, and it seems incumbent on all Governments to enlist tha services of the best brains so that the situation may be closely watched, and legislative measures introduced in ample time to allow of our enjoying the fruits of development. "The unsettled state of Europe is causing grave concern the world over, particularly the conditions obtaining in Germany, Austria, and Italy. The disagreement of . the latter country with Abyssinia continues to_ exercise the minds of those actively associated with the conduct of the affairs of the League of Nations, and with the possibility of more serious complications in the direction of the implication of other nations, the efforts of New Zealand should be added to those of other nations in an endeavour to secure a settlement without further bloodshed. Such a settlement would remove a considerable obstacle from and, in fact, accelerate to some extent a return to prosperous economic conditions." .."A further factor to be reckoned with is the constant development of machinery with its consequent displacement of labour. Whether the solution of this difficulty—and 1 am not a believer in the idea that we are here on earth to work alone —lies in shorter working hours, or in that measure combined with an effort to keep machinery producing to capacity by working two shorter shifts in each 24 hours, and thus reducing costs sufficiently to enable more of the manufactured goods to be sold, or whether still more unorthodox measures will require introduction, the fact remains that the position must be faced up to." So far as the chief market for the Dominion's primary products—Great Britain—was concerned, new problems had arisen during the past few years, among the chief of which were the measures taken by the Imperial Government io protect and afford assistance to the British farmer, and the vastly increased production of countries such as Australia and South Africa within the Empire, and the Argentine without. In this, connection it was of paramount importance that the quality of all the Dominion's primary products should be not ouly maintained, but actually improved, and in a country so rich in Nature's gifts, this should present no undue difficulty, provided scientific and hygienic methods were fully availed of. Any person directly connected with the dairy industry would readily admit chat there was much room for improvement in that section. A reference to secondary industries at this stage would not be amiss. Factory production during the past four years had shown a very considerable increase, which should be capable of being sustained, if not actually increased. There appeared also to be no valid reason why the nature of New Zealand's manufactures should not become still more varied. Wer& there not fresh productive possibilities outside the Dominion's scope altogether? Finally, and not to the exclusion of many other points which might be mentioned if time were available, there was the question of confidence —confidence , in the country, and confidence in the ability of the people to develop it. With the natural resources which New Zealand possessed, surely they could rise to the occasion and make their little nation what it should be—the envy of iho world. COURSES OPEN TO ELECTORS The courses open at the moment were in the main three in number:— fa) Return to power the National P art y- . , . (b) Place an untried team —tne Democrat Party—in charge. (c) Refuse to profit by the experience of outside countries and return the Labour Party. Dealing with each of these courses in some detail, Mr Falconer said that consequent on the extraordinarily depressed economic state of the world, New Zealand was faced with a grave emergency in 1931, and a National Government was formed bv the fusion of the Reform and the United Parties. It was a matter for regret that the Labour Party at this time, although the opportunity was offered, did not see fit to lend support, but one

must credit its, leaders with acting; m what they considered the best mteiests. This National Government decided on an aggressively active policy in an a«emiit, to prevent the country and its people being overwhelmed. What a valiant attempt that was and how successful it had been he would endeavour to show. One of the . main problems with which the Dominion was at that time faced was the stabilising of the public finances. The rate of decline on the revenue side was rapid m the extreme.! and altogether out of proportion witn tne rate of decline of the expenditure side, a very considerable proportion of which consisted of debt and fixed charges incapable of immediate reduction. Added to tpis difficulty was the additional expenditure actually demanded by the depression itsc-U, an example of which was the outlay necessary for the relief of unemployment until such time as special direct taxation was legislated for for this purpose. The Government had been freely criticised on the score that the total expenditure per annum had remained nearly constant in spite of the financial stringency. The figures were as follows:

Savings to the extent of almost £10,000,000 per annum had been effected; but these had been offset by outgoings occasioned by the depression. As a result of the conversion of the internal debt savings had been made totalling £930,000. To make the position still more clear he might mention that in 1929 it took onesixth of the value of the Dominion's exports to meet debt charges. By 1932, owing to the fall in values, the proportion had risen to one-third.

As for the revenue, the Government had been faced with unprecedented difficulties. Customs revenue, land and income taxes, in common with most other sources, showed serious shrinkage, and to have any prospect of achieving budgetary equilibrium the imposing of fresh taxation was unavoidable. The sales tax was an example. Hitherto unknown in New Zealand, though taken advantage of in other British dominions, on a higher scale, it produced for the year ended March, 1935, the sum of £2,170,504. In his opinion t&is should be deemed purely an emergency measure, and just as soon as the budgetary position would allow should be abolished, chiefly on account of N the inequitable nature of its incidence.—(Applause.) In passing, he felt it necessary to refute the statement made by the Leader of the Democrat Party in Invercargill to the effect that the tax was imposed at the rate of 5 per cent., but by the time the man m the street paid for it it was nearer 12 per cent. He would like to be a retailer in a business showing 150 per cent, on the cost of his goods. It was pleasing to note that the policy of borrowing—so faithfully lived up to by so many political parties in the past—had received no support from the National Government. This in the early part of its life was perhaps because the money was not available, but latterly it had been definitely contrary to policy to indulge in what had become the customary amount of borrowing. Since 1931 only £1,000,000 had been borrowed overseas, and a total of £5,655,475 had been borrowed within New Zealand, representing a rate of £1.664,000 per annum as compared with an average of approximately £7,000,000 previously. The National leaders had reason to be proud of their achievement, as, even allowing for the fact that they had reserves amounting to £6,290,000 to draw upon, it was common knowledge that liie financial position of the country was the envy of more than one British dominion. Faced each year with prospective deficits of alarming proportions, by wise administration and, what was very important, the co-operation of their people, the results indicated in the following figures were achieved:—Year ended March 31, 1932, deficit, £2,140,819; year ended March 31, 1933, surplus, £40,142; year ended March 31, 1934, deficit, £709,278; year ended March 31, 1935, surplus, £1,626,000. It should be noted, however, that the surplus remaining as at March 31, 1935, was largely due to non-recurring items such as death duties and profits on the sale of gold. The Minister of Finance (Mr J. G. Coates) had been rather severely criticised for his inaccurate fore >!ast; but, though an able man, he was no clairvoyant, and could not be expected to foresee the dates of death of individuals nor the approximate amounts of their estates. A CREDITABLE RECORD Before passing from the question jf finance, it should be mentioned that the situation so far as it affected the national debt during the past four years was highly creditable. The total indebtedness as at March 31 last—£2Bo,sßl.2l7—was ovfir f 1,000,000 less than it was in 1932. The figure stood much higher in 1934, chiefly as a result of temporary accommodation secured by Treasury bills, which had since been redeemed. It might safely be stated that the primary producers were among the firjt to feel the effects of the depression, and the profound necessity of avoiding wholesale bankruptcies and the lying idle for longer or shorter periods of large areaH of highly-productive land was early realised, and steps were immediately taken to ameliorate the conditions. The prices of wool, butter-fat, mutton, and lamb had fallen by 1931 to an alarming extent from the 1929 level—to so great an extent that the returns were insufficient to meet the cost of production. Action was essential, and. however unpopular the necessary legislation promised to be, no thought was given but to the good of the country. It took courage to embark on a policy of pegging the exchange, and much heart-burning had been occasioned thereby. He was afraid that manv critics had allowed their judgment to be obscured by the thought of possible consequences rather than awa.it actual results. In raising the rate an honest endeavour was made to act in the best interests of the country, and, irrespective of whether the principle was approved or not, some credit might well be accorded a gallant attempt to avert disaster. The farmer himself strove strenuously by increasing his volume of production to increase his returns, but, unfortunately, a similar policy was followed by farmers in competing countries, and the result of their combined efforts' was to lower nrices in the main market still further The effect of the raising of the exchange rate had proved to be much more nearly in accordance with the ideas of the Government than with those critics who so loudly voiced their opinions when

the increase was made. Obviously, the position of the farmer was more secure, and he might venture the opinion that this added security applied whether the farmer's proceeds" were received direct or whether they went towards extinguish! 113 liabilities with stock and station agents or the like. One might also note that, even with the sales tax added, the cost of living, as disclosed by statistical figures had risen only very slightly—a matter of about 3 per cent. What he had said referred to the measures taken to deal with the problem from the receipts end. An attack wns also made from the costs end, and in this direction the major effort was made, due regard being given to the rights and interests of other classes. First, to avoid wholesale foreclosures it became necessary to provide for a moratorium on mortgages. The court was given wide discretionary powers in the direction of postponing foreclosures, and of postponing, reducing, or remitting payments of rent and interest. Regional Mortgage Adjustment Commissions were established and had dealt fairly and equitably with many thousands of applications for relief. LEGISLATIVE MEASURES

Under the National Expenditure Adjustment Act, 1932, rent and interest were reduced by 20 per cent. The graduated land tax was abolished, and only the flat rate of one penny in the pound of unimproved value now remained. Legislative measures had been introduced to co-ordinate the lending activities of the State. The Mortgage Corporation of New Zealand Act, 1934-35, and the Rural Mortgagors Final Adjustment Act, 193435, provided for the placing of money on mortgage on the security of land and the taking over of existing State mortgages, with provision for dealing, with a minimum oi disturbance of the interests of the parties, with the vexed question of over-capitalised lands. The'intent of the Mortgagors Relief Act was to have the land revalued on the basis of its productive capacity, not necessarily when farmed by perhaps an inefficient individual, but, in the absence of satisfactory settlement otherwise, by the result of five years' effort under supervision. The Act also provided for the just treatment of mortgagees and the court would see that justice was done by both parties. It had been suggested that it were better to allow farmers in difficulties to be forced off their holdings on the ground that there was any number of capable young men waiting to take up land, and these would have greater prospect of success than the present holders. This would appear to be pure surmise, and so long as each case was dealt with on its merits the Act should operate successfully. Certainly there had been interference with private contracts, and, while he was fully alive to the sanctity which these should enjoy, he considered that the extraordinary problems confronting the country required extraordinary methods of solution. This interference must be reduced to an absolute minimum, and only such as was for the national good could possibly be justified. By way of increasing the effect of the efforts of the Government to betfjer the farmers' conditions, prices now being received for meat and butter-fat were much improved, and the present prospects for wool were very encouraging. The results of the recent meat negotiations carried out by the Prime Minister and the Minister of Finance were very gratifying. The success attending their efforte to have the British Government abandon its proposal to impose a levy of one halfpenny per pound on mutton and lamb meant a saving to New Zealand of £1,375,000 (New Zealand currency). Were this the only achievement of delegation to the Old Land, even if, as he was led to believe, it did cost a few pounds, then it was more than justified. But added to this the Dominion had secured increased quotas for chilled beef and baconer pigs. The farmer was in an infinitely better position to-day than he was four years ago, and much of this improvement could be traced to the active nolicy pursued by the present National Government. A further major problem which it had been necessary to face was that of unemployment. The peak of the numbers of unemployed citizens ran to the enormous total of 75,000, and even to-day there still remained something over 50,000 to rehabilitate. At any time there was present a number who for various reasons were unemployable; but the great majority of those out of work at present were good fellows who, through no fault of their own, had been deprived of their ordinary means of earning their livelihood. The lack of prospects was having a v«ry demoralising effect on many of these, so that the implementing of a constructive scheme to ensure their getting back to their ordinary callings was one of urgency. The Government, with the generous assistance of the great majority of the more fortunate citizens—both officially and unofficially—and he would here pay tribute to who had so constantly put their hands in their pockets to provide assistance additional to that granted by the Unemployment Board—had provided certain measures of relief through various channels. Though these were inadequate in many cases, and entailed considerable supplementary efforts on the part of local organisations, one should remember that a very considerable proportion of the taxpayer contributors to relief funds were little, if any, better off financially tlian the unemployed citizens themselves. Perhaps the most successful of the means of assistance had been that to assist the building trade, in spite of the criticism levelled at the board with reference to the subsidy granted for the erection of huge buildings in Southland and in Wellington. The least successful, one must admit, had been the No. 5 scheme, as on this class of work a man had no prospects beyond keeping body and soul together. That the Government was alive to this fact would be indicated when he came to deal with future policy. It would stand to the credit of the Government and to the people of New Zealand that over £14,000,000 had been raised for unemployment relief by direct taxation, and in this connection New Zealand was the envy of Australia, where relief had Deen provided by borrowing. Through facing up to its problems, and meeting its obligations as" they arose, New Zealand was in a position to enjoy immediately any benefits accruing from increased prosperity. It had no leeway to make up in the direction of repaying loan liabilities incurred for this purpose. He might again mention that a restoration of confidence in the Dominion would do much to evaporate its difficulties by way of getting everyone back to work. " There are the clearest indications on every hand that conditions are im-

proving," Mr Falconer declared. "There is now abroad a spirit of optimism, replacing the atmosphere of gjpom which has prevailed during the past few years. Export values have improved, imports have increased, the balance of trade is favourable, costs of production have been reduced, and money is available in abundant quantities. Bank overdraft rates are lower, free deposits and savings bank deposits are increasing, factory production is increasing, and building activities are apparent in every city. Business generally shows definite improvement, and there is an absence of signs of that disaster which was predicted by pessimistic critics of the Government. Even to-day, and notwithstanding these signs of returning prosperity which I have quoted, leaders and members of other parties are touring the country in a vain endcavoui" to persuade the electors that disaster is upon us." After giving an outline of the future policy of the Government. Mr Falconer stated: "Surely a comprehensive policy formulated after four years' experience in the most troublous times that have existed for mahy years and. with the approval of the electors, brought to fruition during the next term would prove a worthy structure to erect on the foundation of solid achievement already so truly laid bv the party with which 1 have enlisted." THE DEMOCRAT PARTY Born in doubtful circumstances, and subscribed to by numbers of ex-members of other parties who had failed to achieve fame in their late environment, the policy of the Democrats would almost appear to be to null the National Government to pieces. The amount of purely destructive criticism —and it was much the easiest form —which had been noised abroad would almost lead one to that conclusion. Were the indicated platform of the party capable of proving such a panacea for_ all the Dominion's economic and social ills, then he submitted that it whould have been unnecessary for the leader to spend quite so much of his time in delving into past mistakes, imaginary or real. Indeed, in all seriousness- he would presume to suggest to the Democrat Party that its chances of Buccess would be greatly enhanced if more time were devoted on the public platform, to enlightening the electors on the details of its proposed policy and less to what others had done or proposed to do.— (Applause.) —The Democrat policy as outlined by its leader might be likened to a mirage in the desert. Viewed from afar, it appeared in glowing colours, and, like the mirage to the thirsty traveller, full of promise of relief to the burdened taxpayer.

"We are promised relief from various forms of taxation, and that relief in good measure," added the candidate, "and in the next breath comes promise of such increases in our social services aa surprised oven the most hopeful. Someone must pay, and the only unfortunates who can he called upon to foot the bill are the taxpayers, either present or future. And it seems to me that here is the, catch. Rack to the old habit of borrowing, they would load future generations with a load of care that we may go care free to-day. > Have we not suffered in our fenerations as a result of the debt heaped upon our shoulders by governments in the past? And, realising this, is it right that we should handicap our children — r-.nd our children's children —with a similar burden? No! We have learned in a hard school to live within our income, and we must continue so to do.— (Applause.) "Forty thousand men are to be put back into jobs at normal wages in the first year at a cost of £8,000,000. But can it be done with this amount? I take leave to suggest that it would prove difficult.

" Some weeks ago we were promised that the exchange would immediately be brought clown to a level dictated by the law of supply and demand. From the tenor of recent remarks on the subject one would gather that someone has beeu thinking a little and arrived at the conclusion that the altering of the rate is not quite so easy as the proverbial fall off the log. If the rate were reduced, an export subsidy is proposed for certain producer!?— not the efficient ones, but those seriously involved. In other words, is It suggested that there should be a premium on inefficiency? The cost of deciding who was to receive the export subsidy would rule it out as impracticable, for it would take quite a large staff to cope with it. " The whole of the party's_ platform when examined in detail promises to be more expensive than is stated by its exponents, and the air of light-heartedness surrounding its promulgation undoubtedly suggests that it has not been formulated by men in close touch with the administration of the country; nor with that thoroughness and attention to detail which is so characteristic of the National Party. The Democrats have been slow in getting off the mark, and the electors of New Zealand are possessed of sufficient powers of discernment to refuse to allow themselves to be gulled by such an ethereal policy." LABOUR'S BID FOR VOTES Having reached saturation point in the matter of catching votes in the city areas, said Mr Falconer, the Labour Party had turned its attention to the country districts. Its former policy contained no plank which would appeal to the majority of country residents, particularly the farmer. Therefore one had perforce to be introduced. Guaranteed prices sounded all right, and, in the light of recent utterances, one formed the opinion that that was all the consideration it ever received from the party. One member of tho party said that the guaranteed price would mean nothing more or less than a repayable advance, and in the long run the nation might lose nothing. Another —this time a candidate only—said that the statement made that guaranteed prices were simply a repayable advance was a mis< representation. It was simply the creation of extra credit. A questioner had asked what would happen if the price of butter-fat rose to 2s when the guaranteed price stood at Is Stl. The answer given was: "We would take the extra Od and cancel it out. We want to stabilise prices, and you can't have it both ways."— (Laughter.) Another Labour member said that the money to be paid the farmer would come from the same source from which all New Zealand's money comesthat was to say, Parliament would authorise further printing. Another candidate stated there could be no inflation unless consumption exceeded production, in other words, was New Zealand to have a planned production? Was the Labour Party intending to tell Jones what he was to produce, when it was to be available, and the quantity he was to be allowed to market? There was still another opinion from a member, who said: "Our

answer is that we will take it from those who have it." Another member was more discreet when he said he would supply the details when Labour became the Government of the country.—(Laughter.) So obvious a lack of consideration of the proposal was proved by every advocate. An air of mystery surrounded the detail of the general policy 'of this party. Whether it was that it had received such a thrashing over guaranteed prices that it felt impelled to maintain silence he did not know, but in any case ample evidence was available to ehow that the mam plank of the platform was sketchy in the extreme. From the speaker's experience, the farmer was extremely unlikely to rise to such an obvious bait. CONCLUSION "From these remarks," said Mr Falconer, "you will have gathered some idea of the characteristics of the three parties. The National Government Party, with its record of a difficult job well done in the face of trying circumstances, now releases a constructive policy formulated on solid lines and capable of efficient fulfilment by a party rich in men of proved experience and ability. The Democrat Party has its airy promises and super-ambitious programme for which the taxpayer must ultimately pay, and finally there is the Labour Party with its hazy policy of guaranteed prices put forth iri a vain attempt to capture country seats.. I suggest that if you were putting a party in to manage your/ own business —and the management of a country is a business--you could not select any other than the National Party.— (Applause.) "As your chairman has told you, I have had considerable administrative experience in more than one direction, and during the last eight years I have been in very close touch with all sections of the community, so that I am not unfamiliar with current domestic problems. If you see fit to return me as your representative, I can assure you that I will spare no effort to lend my assistance in the direction of improving the conditions in New Zealand. Those efforts will be directed to assist all classes, whether in sympathy with my party or not —national interests first, and then the interests of the South Island, particularly Otago, and then the interests of Dunedin North. It will be my ambition to set a new standard of service as your representative, by keeping in close touch with the district both during sessions and vacations."—(Loud applause.) At the conclusion of his address, which was entirely free from interruption, Mr Falconer answered a number of questions. A vote of thanks to the speaker and confidence in him as a candidate for the Dunedin North seat was moved by Mr C. B. Barrowclough. When it was put to the meeting there was not a dissenting voice, and it was declared carried amidst sustained applause. (Extended report by arrangement.)

1929-30 .. . ,. .. £25,200,882 1932-33 .. . ,. .. £22,528,370 1933-34 .. . . .. £24,202,027 1934-35 .. . ,. .. £24,500,000