THE MENACE OF INFLATION

Southland Times, Issue 22962, 7 August 1936, Page 8

THE MENACE OF INFLATION

WARNING OF MR COATES CONCLUSIONS FROM BUDGET (United Press Association.) Wellington, August 6. “Round the corner is the menace of inflation.” This was the conclusion pointed to by the Rt. Hon. J. G. Coates (Nat., Kaipara) in an examination of the Govememnt’s achievements, to data and its plans for the future in opening the debate on the Financial Statement in the House of Representatives tonight. “Ever since the Government took office,” Mr Coates said, “it has been administering almost daily doses of soothing syrup. Its members have attempted to lull the public into a sense of false security. They have, in effect, been trying to administer a sort of political anaesthetic to deaden the pain caused bv the application cf the knife of Socialism.” While Ministers and others had been making their reassuring statements, Mr Coates continued, the Government had been active. Its aim apoeared to be reckless expenditure. Perhaps there was a hope that some form of social credit might arise to get the Government out of its difficulties, but it appeared that there was an absolute disregard whether industry was crippled or not. j Government members: That’s not fair. That won’t do. Reaction Expected. Mr Coates repeated that the majority of the Government’s proposals constituted a direct stab at private industry. Labour’s first Budget provided the same array of glittering promises, but he was willing to predict that within the next 12 months there would be a complete reaction. It was to be hoped sincerely that there would not be complete collapse. A study of the Budget showed that expenditure was to increase from £26.000,000 to £31,000,000, an increase of £5,000,000 in one year. Nothing had been put forward to justify that increase, and there would accordingly be a drain on the Consolidated and Revenue j ’unds to that amount. There had been notable instances of delay in reaching decisions. The Minister had promised to announce the guaranteed price before the start of the new export season on August 1. Actually, the price was not announced until August 4. “Is there any significance in the date?” asked Mr Coates. We remember that on August 4, 1914, the-’ was a war, and are we to understand that on August 4 this year another kind of war has started. The Minister probably delayed announcing the guaranteed price in the hope that he would avoid criticism. The war has started and already there is a barrage of criticism over the Minister’s head.” The Minister of Lands (the Hon. F. Langstone): Have you got a toy pistol? Further Explanation Sought. “The Budget states that public borrowing- will not be necessary this year,” Mr Coates said. “We are entitled to ask for a further explanati’i. on this point. Does the Minister intend using Departmental reserves and balances, or is he going to ignore the position and borrow from the Reserve Bank to adjust the balances at the -nd of the year. It looks as if we are drying up all our resources and reserves to put the public works programme into operation.” A Government member: You left nothing to dry up. Mr Coates: My only reply to that is that the last Government left the finances of this country in an unassailab’e position. Referring to the proposal to spend £10,500,000 on public works, Mr Coates said that he understood the Government proposed to find work for 20,000 men. He doubted if the money available would be sufficient to employ Mr C. A. Wilkinson (Ind., Egmont): One year’s wages. Mr Coates: Yes, and wages represent only about half the total cost.