THE OTAGO DAILY TIMES TUESDAY, MAY 16, 1950. AN HONEST ECONOMY

Otago Daily Times, Issue 27390, 16 May 1950, Page 4

THE OTAGO DAILY TIMES TUESDAY, MAY 16, 1950. AN HONEST ECONOMY

It was to be expected that a great many people, whose interest in politics had not extended beyond the occasional absorption of party catchcries, would be apprehensive of the effect of the National Government’s bold approach to the complex problem of subsidies. A generation had arisen nurtured in the belief that, in return for the surrender of liberty of thought, action and protest, the Government would 1 leaven a life of industrial indolence with the blessings of national and social security. But just as the people recognised that such a system was as politically dishonest as it was morally reprehensible, and discharged its authors, so they have recognised the need to adjust themselves to a mode of realistic living, and of meeting economic facts before they are distorted by the costly bureaucratic disguise of stabilisation. The lesson of stabilisation as practised by the Labour Government was that it stabilised nothing. Prices, wages and the costs of stabilisation advanced in irregular but inexorable progression, yet the Government of the day, while aware—as indicated in the Budget speeches of the Minister of Finance—of the inflationary sins it was perpetrating, continued its farce of stabilisation. Had this country been caught by a financial recession—even one of so temporary a nature as the recent setback in prices in the United States —while £26,000,000 m unsecured money was in circulation, the results might have been economically disastrous. Real stability depends on giving our money its real and honest value, and the removal of the greater burden of subsidies is the first step by which the present Government is advancing towards that objective. The immediate outcome will, of course, be an apparent increase in the cost of living, but the Gourt of Arbitration is empowered to provide reasonable compensation to wage earners by declaring a cost-of-living bonus. Other steps remain to be taken. An urgent one, of which the Government appears to be well aware, is the pruning of official expenditure to a level which can be maintained by reasonable taxation. Departmental spending and departmental staffs must be brought into line with the ability and the willingness of the taxpayers to support them, and the scope enlarged for private enterprise to play its rightful part in the national economy. Private enterprise has long been demanding the opportunity to demonstrate its ability to reduce costs and prices, and the speech by the Minister of Industries and Commerce, Mr Bowden, last week, would suggest that concessions to private enterprise are already under consideration and that controls will shortly be removed from a wide range of goods. The competition that can be expected from this move, stimulated by a relaxation of import restrictions on goods the people require, must, in the end, prove of benefit to the public, and assist in giving our money a real and calculable value.