POLICY SPEECH

Southland Times, Issue 22731, 6 November 1935, Page 8

POLICY SPEECH

LABOUR LEADER IMPENDING BATTLE “NO MIDDLE COURSE” GOVERNMENT CRITICIZED (Per United Press Association.) Wellington, November 5. Labour’s proposals for administering the affairs of this country, if returned to power, were explained by the Leader of the Opposition, Mr M. J. Savage, when he delivered a policy speech in the Wellington Town Hall to-night. The hall was full and Mr Savage received an enthusiastic reception. At the conclusion of the address a resolution was carried expressing confidence in the Labour Party. Mr P. Fraser M.P., presided. Mr Savage said that the handiwork of Mr A. E. Davy, political organizer, was this time reflected in the advent of the Democrat Party. Students of political history would at once realize that the work of the Democrats, in the main, was to keep the Labour Party off the Treasury benches. The leader of the Democrats, Mr Hislop, had definitely stated that he would not record a vote which might, have the effect of putting Labour into power. Unfortunately for Mr Hislop there were only two lobbies in Parliament and unless he had a clear majority of his own (which was very unlikely) he must vote either to put the Government into power, or to put Labour into 'power. There was no middle course. It was quite clear from Mr Hislop’s own statement that any Democrat candidates that might be elected would form part of an auxiliary force to keep the present Government in power. The whole thing had a very questionable ring about it. The impending political battle will be between the present Government and Labour, with a few wellmeaning but helpless independents thrown in. The real issue was: Shall private banking corporations continue in control of currency and credit, or shall the State assume control? Unless the money problem was solved there was little hope of a permanent solution of the other problems facing the country. The receat Canadian elections had resulted in a sweeping majority for Mr Mackenzie King who was pledged to the principle of State control of currency and credit, which was the cardinal feature of the New Zealand Labour Party’s policy. The Country Quota. Labour was not in the dock and had no charge of maladministration to answer. The Government was on trial, and its four years of office abounded with breaches of contracts, maladministration, and economic madness which had no equal in the history of the country. Sir Alfred Ransom had stated that the country quota was part of Labour’s hidden policy. Although the country quota was wrong in principle it was not referred to in the present policy and the Labour Party had not the slightest intention of altering the electoral system during the life of the first Labour Government. Its first period of office would be fully occupied in cleaning up the mess left by its predecessors and in implementing its social and economic policy for the restoration of prosperity to the Dominion. The story of the life of the Coalition Government had revealed such a picture of maladministration and economic madness on the part of Ministers as to make a speedy end of the present Government almost inevitable. Government by Royal Commission had become an institution which should be superseded by the elected representatives of the people. Royal Commissions had their place when charges of maladministration had to be investigated, but they should never be employed to find a policy for the Government of the day, as had been the case in recent years. Labour proposed to meet that situation by co-opting the services of ail members elected to support a Labour Government. Ministers would still be appointed as at present, and the prerogative of the Crown would be preserved, but rank and file members of the Government Party would be associated with, each Minister, according to their fitness for the various positions. The , cost of Government would not be increased. It was not the intention of the Labour members to divide among themselves fees at present paid to Royal Commissioners as suggested by a section of the Press. The intention was to pool salaries already paid and to share according to arrangement. The proposal had been unanimously adopted, first by the Parliamentary Labour Party and ultimately by the Annual Conference of the Party. The main object was to make it possible to bring about far-reaching changes for the benefit of the people in the shortest time possible. Control of Public Credit. Labour said that the money service should be sufficient to enable the people to purchase at economic prices the full value of the Dominion’s total production. Unless that was provided the people could buy only at uneconomic prices. The result was industrial depression and unemployment. To provide an alternative to the present system, Labour said that the public credit snould be controlled for the people by a national credit authority whose duty it would be to provide a money service sufficient to give effect to the will of Parliament. The' money necessary to complete capital works must be raised by one or more of the following means, viz., taxation, borrowing, or an intelligent use of the public credit. Further taxation was out of the question. Borrowing meant debt in perpetuity, which had already reached unmanageable proportions, while the intelligent control and use of currency and credit would not involve the country in debt in perpetuity and would not necessarily involve the Dominion in the taking over of the Associated Banks, but would provide a money service at cost. Labour’s policy was State control of currency and credit. Under Labour the money system would operate the same as it was operated now: by people who knew something of the business of banking. When Labour ruled it would be the duty of the Law Drafting Office and Treasury, just as it was now, to express, in the necessary legislation, the financial policy of the Government. -It was clear that the goods and services which were to be exchanged, and the medium of exchange (purchasing power), must be brought into more direct and sympathetic relationship to each other. Mr Savage cited the following as “what the Coalition Government had done”: (1) It had destroyed the foundation of trade and industry in New Zealand by reducing wages, salaries and pensions wage reductions commencing with the charwomen who cleaned out public buildings, and extending to all workers in and out of the public service. (2) It had destroyed the usefulness of the Conciliation and Arbitration system as a means of settling industrial disputes and safeguarding wages and conditions in industry. (3) It had created an army of unemployed ranging in number from 51,000, immediately after the formation

of the Coalition Government, to over 79,000 in 1933—the present number being over 58,000. / (4) It had destroyed the public works policy of the Dominion and discharged thousands of standard-rate workers—-re-employing them on relief rates of pay(5) It had destroyed annrenticeship contracts and turned thousands of partly trained apprentices into the streets.

(6) It had weakened the education system of the Dominion and excluded five-year-old children from the schools. (7) It had destroyed the State Advances Department and substituted a semi-privately controlled Mortgage Corporation which was to be presided over by the managing director of a competitive private lending company. “Virtual Dictatorship.” (8) It had introduced a virtual dictatorship in the primary industries by the passing of the Agriculture (Emergency Powers) Act, and the appointment of the Executive Commission of Agriculture. (9) It had instituted the equivalent of a receivership in the cases of farmers who were in financial difficulties by the passing of the Rural Mortgagors Final Adjustment Act, which provided for enforced budgetary conditions in the homes of producers concerned. (10) It had discharged hundreds of men from public services and, by legislation, had interfered with the superannuation rights of a large number of those who were dismissed. (11) It had failed to honour its obligations under the Superannuation Act and had postponed consideration of the difficulties arising therefrom until after the general elections. (12) It had extended the life of Parliament from three to four years without consulting the people—thus striking a blow at the foundation of constitutional government. (13) It took power under section 59 of the Finance Act, 1932, to dismiss public servants for making statements calculated to bring the Government into disrepute. (14) It passed the Motor Spirits (Regulation of Prices) Act, 1933, with the pretence of regulating petrol prices for the benefit of the users and resellers of petrol. It failed to use the law, with the result that resellers are not getting a fair return; the users are being exploited; and the wholesale interests are still making exorbitant profits. (15) It passed the Broadcasting Amendment Act, 1934-35, which prevented B stations from earning their own revenue for purposes of upkeep, and which would ultimately starve the B stations out of existence if the present Government were returned. Following on the large . reductions made in wages and salaries by the Reform Government in 1922, the United Government was compelled to . introduce the closure for the first time in the political history of the Dominion in order to pass the Finance Bill which provided for further reductions early in 1931. The closure was again introduced in March, 1932, in order to pass the National Expenditure Adjustment Bill which provided for still further reductions in wages and salaries. While the incomes of the people were being reduced, production was increasing with the natural result—falling prices. Buying Power. Ministers said that the Dominion’s trade depended upon external buying power, but thinking people knew that unless the people of the Dominion were able to pay economic prices for all goods and services—including imports —sold in New Zealand trade could not be expanded and bankruptcy would be inevitable. It was no exaggeration to say that from January, 1930, to the end of 1934 the aggregate amount of wage reductions was not less than £100,000,000; while the aggregate sum due to the reductions made under the Public Expenditure Adjustment Act in 1922 could not possibly have been less than another £100,000,000. Labour said that by conscious and intelligent action more settled economic conditions could be made to return. To sit down and wait Micawber-like for something to turn up was not sufficient. Labour said that definite action for shorter hours should be taken immediately. The machine was taking the- place of human labour and unless the benefit was passed on to the people in the form of shorter hours of labour and increased pay, the results of science and invention would be lost. The Government had promised to revise the Apprenticeship Act in order to safeguard the interests of the boy. Labour said that it was rather late in the day to speak about the interests of the thousands of apprentices whose contracts were broken and the boys turned into the streets as a result of the passing by the present Government of Section 56 of the Finance Act, 1932. The full period of the life of the Coalition Government provided a story of destitution and ragged clothes for thousands of men, women, and children while alleged statesmen were discussing restriction of production in order to make it fit in with a shortage of buying power. Public works should be carried out under reasonable living conditions and at standard rates of pay. So long as production was sufficient there was no reason for postponing the introduction of universal superannuation, beginning at sixty years of age, or invalidity. On the eve of the general elections the Government is promising further investigation and the introduction of a National Health Service “as soon as financial conditions permit.” Labour says again that financial conditions must be made to meet the needs of the people and their ability to provide the services necessary to meet those needs. Labour also stood for a National Health Service based upon Universal Insurance. The foundation of any housing scheme must be increased wages and salaries. With a majority in Parliament Labour would begin immediately to'-lay that foundation, and provide decent living conditions for the people. Readjusting Taxation. Readjustment of taxation was long overdue. For many years the tendency had been to shift taxation from incomes to indirect forms of taxation which always involved the poorer section of the people in the payment of taxes out of all proportion to their ability to pay. Whatever way a tax was levied it must come from the incomes of the people. Readjustment of taxation must not be understood to mean increased taxation which has already been overdone. During 1933 and 1934 over £50,000,000 was collected from the people by means of sales, customs and unemployment taxes, and the high rate of exchange. During recent years there had been a definite movement on the part of the Government to economize at the expense of the education of the children. Large sums of money had been spent in building colleges for the training of teachers who in many cases had to find employment on relief works, while some of the colleges were suspended. The nation that attempts to save money at the expense of education was sure to fail. The Agriculture (Emergency Powers) Act provided for a virtual dictatorship in the primary industries. The Executive Commission of Agriculture which has been apponted under the Act ..had almost unlimited powers. The purposes of the Act appeared to be to squeeze the last ounce out of the industry concerned rather than* to find means of paying for the increasing production which was already an accomplished fact. The Executive Commission of Agriculture, with a fairly substantial guaranteed price for their services and with the power of a Hitler, were at present engaged in bringing the dairy-farmer up-to-date. The fact that the dairy-farmer had doubled his production in ten years without any

increase in his income was not seriously considered.

Mortgage Corporation.

The Mortgage Corporation of New Zealand had been substituted for the State lending departments and to the extent that it had co-ordinated those departments it was justified. But the introduction of priyate capital (£500,000), which was a mere bagatelle and only an excuse for drawing dividends, together with thd semi-private control, meant the end of State lending institutions so long as the present Government existed. The Corporation was presided over 1 by the managing director of Wright, Stephenson’s, Ltd.—a competitive lending institution with mortgage interests all over the Dominion. He was also a director of other priv-ately-controlled lending institutions. How could justice be done.by any person with conflicting interests to serve The policy of Labour was to place the Mortgage Corporation on a basis similar to the State Advances Department. The Rural Mortgagors Final Adjustment Act provided no immediate relief for farmers in difficulties. It completed the dictatorship provided for in the Agriculture (Emergencies Powers) Act by placing all tho.'ff seeking relief ' under direct supervision for a period of five years in order to provide a basis for valuation for the purpose of readjustment of equities in the securities involved. During this period the farmer will be subjected to budgetary control of a type apparently similar to the inquisitorial methods of the Unemployment Board in dealing with relief workers. If a farmer happened to have a wireless set, decent furniture, or anything else that might make life worth living, he would be treated as the relief worker was to-day. The time was long overdue for the proper planning of production and overseas trade. The present tendency was to restrict existing forms of production by means of the introduction of the quota. If Dominion experts were to be restricted, there appeared to be only one logical alternative, namely, to build up the home market. That could be done only by the development of New Zealand industries. New Zealand woollens were amongst the best in the world, and in many other lines Dominion products compared favourably with the best imported. When that was so, there was no reason for waiting for other countries to move before beginning to put their own house in order. Children leaving school were entitled to remunerative positions in the work of building industries in the land of their birth. If they could not exchange primary products for the manufactures of other countries, there was only one reasonable thing left for them to do—that was to exchange a greater percentage of primary products with additional manufactures and services of their own country. The time had come for stock-taking and after having considered natural resources and external commitments, they should begin a national plan of reconstruction. The planning of external trade was of equal importance. Hit or miss methods belonged to a past age and immediate steps should be taken to enter into agreements with other parts of the British Commonwealth with the object of exchanging primary products for goods that could not be economically produced in the Dominion. There was no logical argument in favour of tariffs on goods that must be imported from the British Commonwealth and these goods should enter New Zealand duty free. Guaranteed Prices. The raising of the rate of exchange was the equivalent of an indirect tax on the whole of the people of - New Zealand—rich and poor—the burden being greatest on large families. It was raised for the purpose of assisting exporters, and it helped the exporter most when he needed it least, when prices were comparatively high. When butter was at 127/- a cwt., the farmer got more assistance than when butter was selling at 70/- a cwt. A guaranteed price, on the other hand, would help the farmer when he needed it most and would not necessarily cost the whole people any more than a high rate of exchange. A high rate of exchange acted as a brake on Britain’s sales to New Zealand, which in turn must curtail New Zealand’s sales to Britain, one-way trade being impossible. A guaranteed price would have no such effect. A guaranteed price would begin with an average of prices ruling during the last eight or ten years. Labour stood for guaranteed prices. Land settlement must be an integral part of their national policy, but it was useless to talk of such a policy without first laying a financial foundation which would allow the farmer to make a living. Unless those who were already on the land could be made secure, it was hopeless to try to establish others. When the farmer was encouraged to go on the land to provide a national service, he must carry with him some guarantee of security. With complete control of the monetary system and proper planning of production such guarantee could be given, and further land development could be undertaken. At the present time considerable concern was being felt over the possibility of infringements of the secrecy of the ballot. He was confident that no such fears need be entertained. Under the existing electoral laws electors might feel quite at ease in this connection. Mr Savage repeated the list of undertakings by the Labour Party announced at Auckland.