A SPECIAL SESSION

Poverty Bay Herald, Volume LIX, Issue 17944, 23 November 1932, Page 7

A SPECIAL SESSION

EMERGENCY LEGISLATION NEW YEAR POSSIBILITY MORE INTEREST REDUCTIONS (Parliamentary Reporter.) WELLINGTON, this day. There is now every probability that the Government will be obliged to summon a special session of Parliament in February next to pass emergency legislation designed to check the anticipated trend of the economic situation.

This point was made clear by the Rt. Hon. G. W. Forbes when briefly discussing the outlook in an interview last night. The Prime Minister, in reply to questions, said naturally the Government was. hopeful that the necessity would not arise for calling the House together again .in the new year, but on present indications the possibility of an early emergency session could not be ignored. He was afraid that one would be necessary if the country’s trading position did not show some signs of improvement.

Mr. Forbes emphasised that the whole question of whether an emergency session would be necessary would be determined by the condition of New Zealand’s oversea markets during the next two months. “That,” he said, “is the key to the whole situation. We are hoping to conclude the business of tin* present session before Christmas- —our plans provide for that —and no one will be more pleased- than the Government if Parliament does not have to meet for its third session before- the normal time in .Tunc, but if the price levels of our primary products continue to fall we will have no option but to take immediate steps to maintain the national income.” ALL INTEREST TOO HIGH It was suggested to Mr. Forbes that in anticipation of the development of such a set of circumstances ns he bad mentioned it would bo possible for the Government, before the present session ended, to formulate the necessary policy, translate it into legislation, and reserve authority to bring the provisions into operation by Order-in-Council, if, and when, the emergency arose.

The Prime Minister replied that the scheme would be .impracticable on account of the amount of detail which would be involved in the emergency measures which might have to be adopted. Invited to elaborate his references to internal interest rates which hc-lad made to the importers’ deputation during the morning, Mr. .Forties explained that by interest rates lie meant all classes of interest —bank rate of interest, interest on mortgages, interest on debentures, and other securities, arid the rest. There was no doubt in bis mind, ho added, that interest rates in New Zealand were Mill too high. He had in mind, espc va'lv, the rate of interest on loans. Tr the national revenue continued to decline, the question of making further reductions in interest would have t ) be considered. STATE BORROWING Mr. Forbes contended that r : per cent.—the rate the Government vi s at present paying for money “over the counter” —was too high, and observed that even at that rate the State found .it difficult to obtain funds. Incidentally, ho mentioned that one of the objections the Government had to the payment of a bounty on production, as suggested by the banks, was that after the public had subscribed to a loan—had responded- to an appeal at a certain interest rate—it might be found necessary subsequently, through the development of the economic crisis, to arbitrarily reduce that rate. He considered, as Prime Minister, that he would not be acting fairly to the country if he allowed the Government to place itself in such a position. .Asked whether further wages and salary cuts would take their place alongside interest reductions in any future economy measures, the Prime Minister replied that the question had not yet arisen. He added that further Parliamentary action in that direction was not necessary, since, under the operation of the amendment to Hie arbitration law reductions had been made to what might be termed an adjustment level.