EXCHANGE POLICY

Poverty Bay Herald, Volume LX, Issue 18253, 23 November 1933, Page 11

EXCHANGE POLICY

COST OF LIVING UP BENEFITS AND PENALTIES REDUCTION OF OVERDRAFTS (Parliamentary Reporter.) WELLINGTON, this day. Contending that the. Government, by its action in pegging the exchange rate at. 26 per cent., had increased tho cost of living for the whole community and had failed even to benefit the section which it had intended to and claimed to have benefited, Mr. D. W. Coleman, Labor member for Gisborne, in the course of the Budget debate in the House of Representatives, declared that the only people to secure any aid from the raising of the exchange rate on London had been those to whom the farmers had owed money. “In defending tho exchange rate, the Minister of Labor said thaUthe farmers received a benefit of 30 per cent, by the raising of the exchange, but the cost to them was only about 18 per cent.,” said Mr. Coleman. “Did anyone ever hear such rot as that?” Mr. Speaker: Order.

Mr. Coleman: I withdraw tli*t word. Did anyone ever hear such nonsense as that? Even if the farmer received the full benefit of the exchange, which lie does not, it could not be more than 26 per cent. The Minister of Labor questioned whether Mr. Coleman was sure of his calculation, and the member for Gisborne replied that ordinary commonseiiso would support his argument. Tile cost of living to the farmer, and to every other section of the community, he held, had been increased by anything from 30 to 35 per cent.; yet tho Minister had claimed that the cost of living to the farmer had increased by only 18 per cent.

What the Minister had not taken into account, Mr. Coleman pointed out, was that on imports into the country, they were charged the wholesalers’ profit on tho exchange as well as on tho prime cost, then the distributor’s profit on the prime cost plus exchange, plus the wholesaler’s profit, and so on. The Minister had also said that the cost of living was now no higher than before exchange went up, but in a survey of tho price list of one of the largest chain store companies in the Dominion, he had found increases in about 98 per cent, of the prices, on goods required in the ordinary household. Even if the Minister was correct, tho action of the Government was responsible for preventing the reduction of the cost of living.

“The only people to receivo a benefit, as has already been stated, were the stock and station agents and the banks,” said Mr. Coleman.

Mr. de la Perrelle: Oh, no, the fanners themselves. Another member: That is so. Mr. Coleman: I deny that the farmers have received much benefit from it. I know that the lion, gentlemen who are interjecting are amongst those who affirm that the farmers are receiving a benefit from the pegging of exchange when the money goes to pay the stock and station agents or the banks in reduction of overdraft. I know that that is their argument. But it is not what the farmers require to-day. What they require, and tho lion, gentlemen know it as well as I do, is something to assist them to carry on, not so much to help to pay their overdrafts.

“Tho hon. member for Raglan and the hon. member for'Wairarapa defended the action of the Government in pegging tho exchange in order that the stock and station agents and the banks might receive their money in reduction of overdrafts and interest,” Mr. Coleman added later, on tlio same question. “They state that it is fit and proper that the farmer should pay his debts. I know that, but it is not fit and proper that the money should be taken front other sections of the community to enable the farmer to pay his debts. It is not right that tho rest of the community should be put into debt to enable one section to reduce its overdraft.”