REDUCED INCOME

Southland Times, Issue 21732, 18 June 1932, Page 6

REDUCED INCOME

DOMINION’S POSITION INCREASED PUBLIC CHARGES BANKER’S REVIEW Wellington, June 17. Dealing with the outstanding features of the general situation in the Dominion, the chairman of the Bank of New Zealand, Mr Oliver Nicholson, stated at the annual meeting to-day that; the present position might be attributable to the result of two definite causes, namely:— (a) A greatly reduced national income. . (b) An increased annual national expenditure.

Continuing, he said:— They mean on the one hand that the income of the country has seriously diminished and on the other hand that its financial requirements have greatly increased. In other words, we have less money from income wherewith to meet greatly increased public charges and standing debts. I do not think it necessary to furnish statistical figures in proof of this assertion, as these have been furnished from time to time through other channels. The serious fall in income is due chiefly to the unprofitably low prices for produce. The wool position is so serious that unless a substantial improvement in prices sets in, sheepfarming in New Zealand will be greatly restricted, as it is unreasonable to expect farmers to continue in any industry at a loss to themselves. As this industry has been one of the main avenues of the Dominion’s wealth, any restriction in the direction of its development will materially reduce the amount of national income in comparison with previous years and retard the progress of the country’s rehabilitation. Our sheep flocks will diminish in number and our lamb export trade in frozen meat will be materially lessened. It is hoped that some means of assistance to sheep-farmers will be devised .to encourage them to continue in an industry in the success of which the people of the Dominion are so vitally interested. Dairy produce is very low in price, and it is probable that adjustments will have to be made to a permanent lower level of land values to meet such conditions. Production costs will have to be further reduced, which requirement covers interest and all other charges on the industry, which obviously can only bear charges within its earning power. Restricted Trade. The condition of a greatly reduced national income has consequently brought about restricted trade, which in turn has caused the present grave unemployment crisis. All avenues must be explored to remedy the position and the channels of a further settlement of a considerable section of our population on the land and a vitalization of secondary industries appropriate to the Dominion appear to be worthy of serious consideration and support. As regards our trading relations abroad, much good is expected to result from the British Empire Conference to be held at Ottawa in July next. It is fervently hoped that there will be achieved at this conference through sacrifices made for the common weal, an Empire trading understanding and strength which will prove beneficial in the future to all the units of the Empire. It is clear that Great Britain must be the main outlet of our country’s primary products, and we should see that the goods we require from abroad are purchased from this source in preference to any other. Briefly summarized, the following appear to be essential requisites for the country’s welfare and rehabilitation:— (1) Greatly reduced costs of production to meet world-wide competitive conditions and further increase in the volume of our exports and the cultivation of further export lines. (2) Restricted public expenditure under several headings, bringing Government expenditure within the limits of the country’s present resources. (3) The creation of a self-depend-ent rural community comprising the bulk of the population by their settlement on the land in small holdings. (4) A reasonable further establishment of industries appropriate to the country. Thus we would’secure a more balanced population so far as regards their occupation and employment and so remove a portion of the discontent now prevailing in the Dominion. Government’s Measures. It is a matter for congratulation that we have a Coalition Government, which is functioning with a mandate from the people to take all steps which may be essential to bring about the Dominion’s financial stability and prosperity as speedily as possible. It has realized the problems which have to be faced, and in the exercise of the mandate so given it has seen the necessity of imposing taxation to a most onerous extent, of effecting rigid economies in public administration, and of putting into operation drastic measures which cannot be justified save through the exigencies of the crisis through which the country is passing. In so acting, it has incurred the displeasure of many sections who resent, being called upon to bear a share of the financial burden which they selfishly consider should be placed on other shoulders.

People are too prone to blame the Government for the Dominion’s present position and to attribute the same to the lavish borrowing policy and extravagant expenditure of its predecessors. They forget that such policy and extravagance (emulated as well by all local authorities) were but the reflection of their wishes and that they materially profited thereby, while they were in full operation. As they have shared in the benefits arising during the period of inflation and prosperity, to now they should uncomplainingly and courageously face the hardships resulting from deflation and adversity. The Government should be extended support and helpful co-operation in its earnest efforts, and not be subjected to capitious criticism and active as well as passive opposition and obstruction. Especially should the Government be commended in its honest attempts to solve partially, with the financial resources which may from time to time become available, the problem of unemployment—a state of affairs brought about through no fault of the majority of the unfortunate persons in that predicament. Sacrifices Necessary. Sacrifices must be made ungrudingly by all who have the necessary means, as well as by those in employment, to meet the plight of this unfortunate section of the people and the extent of these sacrifices must vary according to capacity to bear them. Until the world’s economic problems are satisfactorily solved, every endeavour must be made to put the country’s financial position in order by the practice nationally, locally and. privately of all reasonable and requisite economies, by the balancing Of the National Budget within a. reasonable period of years from sources other than borrowing and by finding avenues of employment for those who are in need of the same. This being achieved, we

shall be able as soon as the world’s conditions improve, to reap the full advantage of the improvement and once more experience the blessings of prosperity. The position must be faced with a resolute courage and an unselfish spirit, and every endeavour must be made to foster during the period of rehabilitation a spirit of goodwill in all classes of the community which will be extremely helpful in the solution of the country’s difficulties. When this happy result takes place, let us trust that the lesson of the depression will not be forgotten, but that work and thrift will take the place of the ’somewhat extravagant style of expenditure which has been the outstanding feature of past years.