MEETING DIFFICULTIES

Poverty Bay Herald, Volume LV, Issue 17472, 22 January 1931, Page 7

MEETING DIFFICULTIES

WHAT REFORM WOULD DO STATEMENT BY LEADER ECONOMIC CONFERENCE URGED (Pnr Association.) WELLINGTON, last night. The following statement was issued to-day by the Rt. Hon. J. G. Coates, Leader of the Reform Party: ;''Somc years ago, at a time of financial erisis, the Government of that day put the whole resources of tlu State behind the Bank of New Zealand. It was recognised that failure, of the bank would have had far reaching results and the Government ■was justified in taking the action it did take to avert such disaster. <<But the failure of the farming industries in New Zealand to-day would he. an even greater national disaster than the failure of a Lank. Th«-.. seem to be many people who do not even yet realise how grave and critic il is the position to-day of mint) thousands, probably tens of thousands of our farmers. I am neither Ml. alarmist nor a pessimist, bul I am ••>»)• vinced that our duty is to face ..nd recognise the facts. I believe that >i wo recognise the facts and take the necessary strong measures to deal witu the situation—then we can cmergo 7 from the' present crisis suec&sfuilv, but any further drifting will • navo most disastrous results. "The present difficulties are nn» confined to fanners. Associated with them in the economic crisis are the majority of businesses and industries in the towns, and one of the most distressing effects is the rapid increase, in number of the unemployed. The position cannot be stated too oftei.. or too dearly, that there has been a serious decline in the level of world prices, and this has resulted during the last two vears in a fall estimate.l at about £20,000,000 in the monetary returns for our farm produce, and ;, fall of nearly £20,000.000 a year in the value of our production of all kinds This means that our national inenm^, tho income of the community as a whole, has decrcused approximately 20 per cent. HIGH COSTS OF PRODUCTION y' "If the cost of living and the c. >st* of production had decreased to a corresponding extent, the present ilifn cultics would not have arisen. But tlu position to-day is that, in view of the fall in export prices, costs of prod.ic aro greater than the market re. , turn for the product, and, under jh/:«e conditions, it is obviously impossible for business and industry to be curried on, for New Zealand's first essential is to keep up the volume of production, especially of our primary product: for export. While we cannot cmiiVol overseas prices in the world market, we can do something—we must do something—to alleviate the condition of farmers in Now 7 Zealand in ordei to enable them to continue producing. "One urgent need is that the Gov eminent should supplement the work . of other financial institutions by using the organisation of the Intermediate Credits Board, working in conjunctioii With the dairy companies and the stock and station agents to make an vanccs to farmers for the purchase of fertilisers. "In regard to interest on mortgages, it is satisfactory to note that many adjustments are now being made by private agreement between the parties. But it is necessary that the Government should also set up some machinery for bringing these parties to gether in cases where they fail to come to an understanding without such assistance. LOCAL BODY RATES "In the matter of local rates, mans producers are experiencing difficulty in finding ready money with which to meet tho demands, and the Government should consider the possibility of permitting local bodies, in certain cases, to re mit the 10 per cent, penalty now added to overdue rates. Beyond this there ,is, of course, the need for permanently easing the burden of reading costs upon the primary producers by means of .some system of derating. "Some alterations are also required in the tariff in the direction of lowering tli« cost of certain imported lines of materials and machinery used in production, and making possible a more rapid decline in the cost of living. The revaluation of land is an urgent necessity at the present time in view of the marked fall in its real or productive value. "In the cities also the paramount need of the day is to effect reductions in the cost of living and the costs of production in the many businesses and industries. The present position is that the total amount of salaries and wages, plus interest and rent, plus power and materials, plus taxes and other costs of production, is greater than the price which can be obtained foi- the product. The decreased spending power of the community makes it impossible to maintain the old level of prices even in the .New Zealand market, but a reduction in prices can be brought about only by means of a reduction in the cost of living «jml the costs of production. "Unt\ such a readjustment, is made, many industries are unable to produce and sell at a price which the consumer can now afford to pay. Business and industry are, therefore, being compelled to slow flown and. in some cases, suspend operations altogether, with the result that investors are losing their . capital and workers their jobs. "This is the cause of the tragic increase in unemployment and the only remedy lies in effecting a reduction in the costs to make it possible for goods and services to be sold at a lower price conforming to the smaller spending power of the public. "The Reform Partv has consistently urged the Government to convene a national economic conference representative of the primary producers, nmnufacturcrs,' importers, financial institutions and workers, all of whom ore Vitally concerned in this problem. Such a eon. ference should work out the details of n plan by which the necessary readjustments could be made on an equitable hnsis and the resultant losses spread aa widelv as possible over the whole rommvm'tv, so that thev would not fall nndnlv unon anv section of the farmers'. T>usir»ss men. wor'-ers or in"estors, but wb'nM be shared fairlv bv all. "This conference should ."'so *~*mme various practical methods o f nnvmertt bv results, with p new to putting n premium upon efficiency and giving (rood wor'-ers an opprtrtnnitv of incmnln" their earnings. Such a scheme should also include n<W|unte safeguards against enHovcr« c-'tfine the rate. "It should filler be n-rwed that, in order to foster a revival of private enterprise. Ml rmnpN-ssnrv n-'>',,f,ons and renditions should he abolished, w*il- existing Stet" trnHW detriments which compete wi'h oH-nte cntemn™ should be rennired to do so on eoual terms as regards local and rreneral taxation » n 4 on all gtbe* conditions.