ON DEFENSIVE

Southland Times, Issue 21930, 3 February 1933, Page 8

ON DEFENSIVE

PRIME MINISTER POLICY VIGOROUSLY UPHELD 4? REPLY TO CRITICS (From Our Parliamentary Reporter.) Wellington, February 2. With his jaw stuck out at a formidable angle and his right fist waving, the Prime Minister gave a characteristic fighting speech when replying to criticism of the Government in the second reading debate on the Banks Indemnity Exchange Bill in the House this evening. He claimed that the Government had acted in the best interests of the community, as the rest of the community was governed by the welfare of the farmer and that if the deflation policy had been continued the prospective budgetary deficit would have bee« far worse than that announced. He gave his opinion of those who would vote against the Government in no uncertain terms. According to his view, a man who stood by. his friends in bad weather was worthy of the name oi man.

He began by answering remarks that had been made by various speakers, particularly Mr C. A. Wilkinson regarding party loyalty. It was oy party loyalty and co-operation, he said, that the business of the country was carried on. He could understand men .like Mr Wilkinson who would belong to no party not understanding the meaning of this. Hotly defending the increased exchange policy, he said that when the House adjourned it was to enable the Government to investigate the position of the country and to see if it could give relief to a position that was rapidly becoming desperate. Cabinet had taken evidence from the heads of State departments and others regarding the position of the country. When the position was revealed it was known that the country’s export revenue had dropped from £56,000,000 in 1929 to £33,500,000 in 1932. Yet the Labour Party spoke of some mysterious credit mobilization and a guarantee of farmers’ credit so' that the position could be restored to that of 1929. Yet to restore the country to the position of 1929, a sum of £55,500,000 would have to be found. It was a wonderful thing this mobilization of credit if it would find £55,500,000. Mr W. E. Parry: Tell us another story. Mr Speaker: Order, order. Mr Forbes continued that if the Labour Party did that, credits would be well mobilised and there would be no surplus in the Dominion at all in four years. Primary produce revenue had decreased by 40 per cent, and that 40 per cent, decrease had fallen directly on the primary producer. That was the cause of the position to-day. Though they were doubted by Labour members, the Government statistician’s figures showed the position clearly as relating to farming costs and receipts. In the past two years all the assistance the farmer could get from the bank, stock and station agents and his friends was used up in paying his debts, and now his capital was gone. Members of the Labour Party gave a laugh of derision when it was said that a man wanted to pay his debts. The farmers were just as honourable as other men, and nothing would please the farmer better than to be able to go to the country storekeeper —who had stood well by the farmer in recent years—and pay something off his debt. Money spent by the farmer in that way would very soon circulate right throughout the community. The farmer in the last two years had used up all his reserves and towns and cities had received their share of the benefit of the money spent and credits created.

Reserves Gone.

To-day the country had got to a position where it had to live by its income, for its reserves had gone. He himself had been chided with the fact that he had changed his mind on the exchange question. When he had examined the figures and facts, he had realized the effect of the shrinkage of farmers’ income on the towns and cities of the country and he had thought that if anything could be done to relieve the position it certainly should.

He realized that he would have to change his mind and didn’t care tuppence for that in the circumstances.

“I realized that if the Government had closed its eyes to the inevitable consequences of doing nothing,” said Mr Forbes, “it should not be on the Treasury benches.” • The Government, he said, had come to the conclusion, with the exception of one of its members, that the only way to help the primary producer was to raise the rate of exchange. If the Government realized that by that means it would be benefiting the whole country, it should take its course, despite running counter to many interests and receiving abuse.

Unemployment. Mr Forbes considered that the best course had been taken respecting the exchange. He dealt with unemployment and gave figures showing that increases in the unemployed totals had followed the decrease in farmers’ receipts. The questions of the farmers’ welfare and employment were closely related and as unemployment was the most pressing problem of the day, the Government had had to do something to improve farmers’ receipts. When he was dealing with unemployment increases Mr F. Jones interjected: “You said wage reductions would reduce the numbers.” Mr Forbes replied that if there, had been no wage reductions the number of unemployed would have been greater. However, it had been shown that no matter what was done in the way of palliatives the fall in the prices of farmers’ produce was the governing factor. If the exchange stimulus could be applied to the primary industry, the Government would be doing something to restore industry generally in a large measure. That was not to say everything would be done, but at least something would be accomplished. If the Government had stood by and done nothing, the number of unemployed would soon have been doubled. Labour members murmured loudly here and were sharply called to order. Farmers would be able to keep up production, said Mr Forbes, and the benefit would be felt by the whole community. One had only to go to little towns to find that business was picking up already. (Laughter.) Mr Forbes said he knew there was a city outlook, but in the country towns the benefit would certainly be found. If the policy of deflation had been continued a further 25 per cent, cut in wages and other costs would have been necessary to enable the country to carry on. The Government, however, had faced up to the position. Meetings of Protest.

When he heard of meetings in Wellington protesting against the high exchange he felt ashamed of the men taking up such a position. Had they no care for the men out of work?

At this stage there was an effort to get an extension of time for Mr Forbes but loud Labour "noes” blocked the motion before it was put.

Mr Forbes continued that the Government had been returned to put through unpalatable measures and it

had done so. In bad weather one wanted men to stand by one and the Government was going through bad weather. It had plenty of fair weather friends, but he was certain the men behind the Government would see it through. A man was a man if he could stand up and not run at the first sign of clamour. This was the testing time when it would be seen if men had public spirit and could face a little unpopularity in doing the right thing. The figures in Mr Coates’s statement said Mr Forbes, were those from men opposed to high exchange and were the blackest possible, but the Minister of Finance had taken them, though not one was on the credit side. The Government of Australia was behind the principle of high exchange and said that effects on the Budget were compensated for by the improved condition of the country. The New Zealand Government thought the same. If the Government had allowed the forces of deflation to rule, there would have been a worse Budget than that before the House. “We shall see when it comes to the actual making up of the Budget,” said Mr Forbes, “whether the predictions come true or not.” He sat down amid loud Government applause.