LABOUR’S RECORD

Otago Daily Times, Issue 23437, 28 February 1938, Page 5

LABOUR’S RECORD

TiW. WAV OF PROStffcßmf LESSONS OF THE Pt&ST « ONR PROGRESS WILL CM) ON ” nWME MINISTER’S SURVEY (Per United Press Association) FEATHERSTON, Fie Jo. 26. "Poverty has given way fin New Zealand to picnicking—and in certain quarters to garden parses,” remarked the Prime Minister J(Mr M. J. Savage) at the picnic tq-day of the Wairarapa branches of the Labour Party at which he was tßie guest of honour. “A few years ago crowds gathered to demand more fd>od and work, and they were giv en the charity that is as hard as ia stone. This year the greatest assemblages all over the Dominion ha.ve been lor pleasure. Every form of holidaying has been a record. This is the difference between having a Labour Government in poiver and a National Conservative Government in a panic. When tM; Labour Party routed the depression Government a little more than two years ago, the ' record of misery and muddle was a disgrace to an intelligent community. Except td>r its lessons, the depression in New Zealand is past history with mo value. But these should not be forgotten. One can fairly say that in ithose five black years the people’s dyes were opened to the fallacies oi the o.ld ideas of economics. The system of leaving everything to private enterprise and hoping for the best was proved false by the great > economic disaster. The attractions 4* private enterprise may still pleasei some, but they are not enough to satisfy the requirements of the peoplh. _ “ It is necessary to emphasise that fact because there are sorcue men today who want to go bcl&k to the old system. They are the J men who wasted four years trying to turn the comer and then turned the wrong comer into the political wilderness. Let them renjiain there for the proverbial 40 years. The prosperity we know to-day 1 must not be permitted to lull people into believing that social and economic reform was never necessary, We must build the new prosperity dipon more stable foundations than thfe old. The aim of Labour’s polity is. io give the Dominion a steadily rising level of prosperity instead of a succession or booms and slumps. And .already the new ways are proving t(o' be better methods of redistributing' the increased national wealth. ' One of the great truths the world Ifste leamt_ is that slumps and booms are not inevitable. natural forces-f-or Acts of God—working out their iinescapable destiny. , , “ The history of the i depression and of recovery the worM over has surely taught us that Governments must accept the responsibility for deciding the main diretten of national economic development. We have had the spectacle of poverty and suffering in a world uof technical efficiency. The convicflion that is now widely held is that frnan can m actual practice interf'Wfe successfully with the play plf . eepnomxc forces. Even Mr Chariiperlain, the head of a Tory Goverftilaent, says, ‘We have had to realigd l that even the most efficient inditeftry cannot create or maintain tha conditions necessary for successful' operation —Governments must rflgulate I;he direction and volume of 'trade.’

Insulating New 2Se\\l and “ One of the bogeys vt&sch our opponents delight to con:/Uire up, continued Mr Savage, “ is the prospect of another depression. They threaten the people with depression both from outside as a | result of the so-called overseas recession as well as from inside as the. result of Labour’s prosperity policy. “ Let there be no mistake or misunderstanding about Even if there is any recession overseas Labour’s policy is framed to avert the effects from btnng imposed on the people of this Country. We have always stated that! it is possible to insulate the N(j.w Zealand economy from the effects of any world depression. Should such an occurrence again afflict the world — and I see no reason why it should — then I can assure you. 'there will be no better test for th<t success or failure of our policy, “Everyone knows Hhat it is too late to discuss remedies when a crisis is upon us and preparations must be laid in times of prosperity. We have our plans nelidy—they are both comprehensive aaid detailed. It is largely a money problem. The Government is determined to base our money system 0(n production. The depression Govern ment believed that the fall in overseas prices led naturally to a fall n/- national income which in its/ course must necessarily be followed by sacrifices all round to meet The straitened conditions. v “ The Labour Pa;n y still holds that national income- 'must, and can be, substantially mamtained during bad times overseas, ¥e would protect standards of living by maintaining wage rates and employment —by protecting the farmers’ income, and there must certainly be no cutting of public works <hi the score of economy, which was <one of the cardinal errors of the plast depression. Our standard of life lean be limited only by our power to produce. The clearest lesson of the depression is that monetary policy’fls the most important single factor influencing a country’s economic prosperity. Already we have oped the public credit in restoring prosperity—and we will not hesitate to use it further whenever necessity Slrises.

Contrasting Conditions

“ In this connectiqn I think it is my duty to contra};t the state of affairs before Labour came into office with conditions to-day. As a result of the ruthlijss deflationary policy of the Government the Dominion, amassed some £23,000,000 of sterling balances in London. They even reduced the National Debt during the depth of the depression! ThtMe were claimed to be the magnificent achievements of wise administration. “But what was the result of that stupid policy in New Zealand? The consequences were inevitable. When Labour came into dffice over 57,000 men were without • employment; no fewer than 175,000 teen, women and children were suffering from protracted impoverishment; only 3300 boys were learning trades; social services were curti tiled and hopelessly inadequate; , 50 per cent, of 80.000 farmers were insolvent; wage cuts were so deep 4 hat the purchasing power of H ery class was affected; we had relief camps, sus-

tenance on a starvation scale and malnutrition, and people have not forgotten the soup kitchens and the old clothes drives. Such was a part of the economic mess we had to clean up. “ Those who had helped most to create these ruinous conditions now say that the causes were beyond political control. They also assert that if similar circumstances arose again they would, if they got the chance, do the same again. I will return to that aspect in a moment. I will say now that this can only mean that the Nationalists would again slash wages, cripple enterprise, abandon public works and reduce pensions and unemployment relief to a beggar’s pittance. They say we are spending too much money, which means, of course, that if they are returned again they will spend less. That must mean another depression in the making. That is not a fanciful prediction. It is a true summary of the Nationalists policy in practice. They call it prudent and safe administration against bad times. The _ mockery of those wretched conditions was that the great productive capacity of New Zealand was on the increase ah the time, and so were our sterling balances.

The Credit Side

“ Towards the end of 1935 Labour was given its opportunity to reverse the disastrous policy of its predecessors. The beneficial results have been increasingly apparent. By increasing the standards of living and creating national assets, prosperity has not only been restored, but it has been increased to levels never before experienced in this country. Here are the official facts of prosperity in the past two years as compared with those of the best year under the Depression Government. “Since 1935 our exports have increased by 43 per cent., which means a gain of close on £20,000,000. That is the New Zealand selling side of the new prosperity. On the buying side the increase has been 54 per cent. The gain has exceeded £20,000,000. The business of the banks in two years tells a similar story of prosperity. Cheque transactions have gone up by 30 per cent, or nearly by £ 5,000,000. The notes in circulation increased by 37 per cent.; while wholesale business turnover has gone up 45 per cent. More than 1000 additional houses were built last year as compared with 1935. The value of new buildings has increased by 60 per cent. And it has been said that the Government is throttling private enterprise. “How have the wage earners fared in the change-over from depression to prosperity? Let them think over the vast difference in their lot. In 1935 the wage earners got £67,000,000. Last year the workers’ earnings totalled £96,000,000 —a gain of 43 per cent. In other words those who work for wages received £29,000,000 more than they were paid under the last year of Coalition Government. As a matter of fact wages in New Zealand to-day are higher than they were in the boom year of 1929. b it has been asserted that wage increases would have increased naturally even without the Labour Government. But would wages have gone back to the 1931 level? We all know what has happened in other times of prosperity. Other sections of the community enjoyed increased returns while the wage earner remained in a relatively poor posi--IC“History supplies the proof. When the wage earners’ position became unendurable in the past he always had to fight for an increase. He had to fight all the time because employers do not willingly increase wages. He will have to fight again if the wage-cutters ever geV back into political power, and re-enact their depression policy of stopping the machinery of compulsory arbitration. One has only to compare New Zealand conditions with those of other countries where the machinery for industrial peace is out of gear or is not effective. In the United States of America the workers only kept their real wages from falling by bitter strife in which guns and tear gas are used. A few weeks ago President Roosevelt issued a warning against cutting wages. He emphasised the necessity of maintaining the purchasing power of the worker, and added: ‘To reduce the purchasing power at such a time is nothing short of suicidal.’ We have been saying that in New Zeaalnd for years.

Industrial Prosperity “More people are employed today than at any time in New Zealand’s history. The employment of boys and girls has increased substantially during the past year. Over 16,000 boys and girls left school last year to take up some definite occupation, Have you heard any parents repeat the old depression cry: What are we to do about our boys? “A great deal has been said against the Labour Government’s policy of paying adequate sustenance rates. No excuse is necessary. We refuse to believe that hunger is the best promoter of employment. “The aggregate private income has increased 36 per cent, in two years. This means a gain of £37,000,000. You have been told by Nationalist propagandists on the platform and in the anti-Labour press, which means nearly all the daily newspapers and mushroom journals, that the Government’s legislation has shackled private enterprise and robbed them of profits. “Actual facts confound these prophets of disaster. Within 18 months of Labour rule some 1350 new companies were registered with a capital of over £13,000,000. The profits of 150 representative companies, whose results have been published, show an average increase of over 14 per cent, after the payment of taxation. The number of registered factories last year increased by 692, bringing the total to well above 17,000. “ There has been a record increase of 21 per cent, in the number of factory workers during the past two years. Increases have been recorded in respect of every kind of factory. The value of production has gone up from £79,000.000 to £105,000,000 in round figures. “Increased purchasing power for the majority of the people has had a marked influence on the extent of shopping business. Last year almost 1000 more shops were opened, giving employment to an additional 7000 assistants throughout the Dominion.

The Economic System

“The economic system has been reorganised in respect of agriculture, The dairy farmer has been given a guaranteed income for the first time in his life. He has beep given security and stability. For 10 years before the advent of the Labour Government the dairy farmer doubled his production, but got no more reward for his efforts. He was driven into bankruptcy, Two years ago the average income of small farmers with valuations under £3OOO was £2 a week. To-day £5 15s is the average after paying rent, interest and working expenses.

“ Orderly marketing has been established in respect of many farm

products. Thus the dairy farmer is protected against the vagaries of overseas markets. The procedure is now simple and economical.

Expenditure of Revenue “As a result of better times the taxation revenue last year,” said the Prime Minister, “ increased by £5,500,000 to the record sum of £31,000,000. That, admittedly, is a * mighty lot of money.’ But what is it used for? This is the test. Well, to begin with £ 11,000,000 goes to the annual payment of national debt services—a legacy from previous Governments. The sum of £18,000,000 is paid for social services including health, education, pensions and unemployment relief. Thus, more than half the taxation is handed straight back to the people. Approximately £3,000,000 is spent on highways. The rest of the money goes in essential repairs, defence and administration. “ It is true that taxation was less under the depression Government, but then income and wages were also much lower, and tens of thousands of people had nothing on which to pay taxes. Social services were shamefully inadequate. We hear a lot about high taxation. In this also the test is: What have the people left after paying taxation? Since 1935 the aggregate private income has increased by at least £37,000,000, while taxation revenue has gone up £10,000,000. The extra money left for the people is £27,000,000. “ Taxation to provide social services is part of the Government’s policy of redistribution of the national income. Can New Zealand afford its social services on the present improved scale? I say yes, and I defy anyone to disprove it. “ Our programme of progress will go on,” he concluded. “ State houses are now becoming available at the rate of 60 a week. Plans are in hand for the construction of 2517 houses in 41 towns. Moreover, building construction is increasing generally. Permits for December last were 323, the highest for 10 years. The issue of permits for new houses last year totalled 4144, ar\ increase of 1000 over the number in the previous year. The value of all buildings in the larger towns last year was well over £7,000,000, an increase of 60 per cent. If the rate for the last few months is maintained, this year will show a figure of £10,000,000. And critics say private enterprise has been driven out of building construction. A great deal has also been said about expenditure on unemployment relief, and particularly the employment of 20,000 men on public works. World experience has shown that every penny spent in creating public assets and on retrieving men from enforced idleness goes into immediate circulation, thus helping to maintain business activity.”