The Southland Times PUBLISHED EVERY MORNING “LUCEO NON URO” WEDNESDAY, AUGUST 25, 1937. The Government And Prosperity

Southland Times, Issue 23287, 25 August 1937, Page 4

The Southland Times PUBLISHED EVERY MORNING “LUCEO NON URO” WEDNESDAY, AUGUST 25, 1937. The Government And Prosperity

Broadly speaking, the Labour* Party came into power at the last election first, because many people identified the Coalition Government with the depression; and second, because the party’s leaders —men who claimed to stand for honesty in politics—went to the country with all kinds of specious promises, of which some they could not have honoured and others they have made no attempt to honour. Today we have the spectacle of these same leaders using methods no more creditable to create the illusion that their actions have been responsible for the present wave of prosperity in New Zealand. Taking political advantage of what is purely a piece of good fortune—the fact that.the revival of export prices coincided with their election to office—they are trying to identify the Labour Party with prosperity while doing everything in their power to blackguard the Coalition and maintain the fiction that that Government caused the depression. We reprint from The. Press, Christchurch, this morning the report of an address given to the Riccarton branch of the Labour Party by the Minister of Railways (the Hon. D. G. Sullivan). It quotes Mr Sullivan as saying this: If we examine by every possible test the economic situation of this country today, every one of these tests indicates that the prosperous position which New Zealand is in at the present time is predominantly a result of the Labour Government’s legislation. The influence that has been absolutely predominant in restoring prosperity in this country is the influence of a rapid, rise in the prices of our exported produce, notably wool. Of this rise not one word appears in the report of Mr Sullivan’s address. The rise in the cost of living, he says, is not the Government’s fault: half of it is due to “outside influences.” But when it comes to the other side of the ledger—the improvement in our economic condition — outside influences, Mr Sullivan infers, have played only a minor part: the improvement is “predominantly a result of the Labour Government’s legislation”, the achievement of the Government has been “splendid”, and so on. The return of the Prime Minister seems to have inspired his colleagues to new transports of modesty, not to mention inaccuracy. If Mr Sullivan studies the latest Abstract of Statistics, containing export statistics for the full production season ended on June 30, he will find there the real reason for New Zealand’s relative prosperity (if a country with 37,000 unemployed, 22,000 of them in idleness, may be called prosperous at aU) and the real reason why New Zealand has been able to support his Government’s extravagances. The value of our exported produce in the production year 1936-37 was £64,138,736, an increase of £11,000,000 over the previous year’s value, which, in turn, exceeded the value in 1934-35 also by £11,000,000. Over the last six years, the annual export returns have been as follows: COALITION IN OFFICE

In the two years that Labour has been in office New Zealand’s income from exports has averaged £18,000,000 a year more than when the Coalition was in power. The export income for 1936-37 was practically double the export income for 1931-32, the year in which the Coalition was formed. The Minister of Railways would have us believe that this steep and substantial rise in the country’s income is merely incidental to the remarkable curative powers of his Government’s legislation. Of course there has been a revival of business activity; of course savings bank deposits are up; of course there have been expansions in life insurance and totalizator investments. How could it be otherwise, under the stimulus of a record production year? And has it ever been otherwise in the boom periods of New Zealand’s history, whatever the Government in power? If export income is only a minor condition of oui* prosperity, will Mr Sullivan or one of his followers explain how the Government would maintain the present level of prosperity if this income fell ’to, say, £34,000,000 for each of the next two years?

In the same address Mr Sullivan makes a further attempt to convince the wage-earner that the increase in his wages has brought him real benefit. The “total increase” in the cost of living since the Government came

into office, he says, is about 7|' per cent.; but “the darnings of the people” have risen by 15 per cent. Before the Arbitration Court in Auckland on Monday, the secretary of the New Zealand j Federation of Labour (Mr F. D. Cornwell) —an official who in the course of his work must come into contact with many more wage-earners than Mr Sullivan does —told a very different story. Mr Cornwell said: Since the court restored the 1931 rates of wages [that is, since July 1936] the cost of living had increased between 10 per cent, and 12J per cent, and workers were losing, and had been doing so for some considerable time, a vast amount of purchasing power. The fact is that while the total earnings of the people may have risen by 15 per cent., the rise has been very uneven. In some cases —Public Works employees are an Example—the rise in wages has been spectacularly high; and these employees will clearly be better off than they were, after allowing for the increase in prices. But in the great majority of individual cases, the rise in wages has been no more than 10 per cent.; and this rise has been largely, if not wholly, swallowed up by increased prices. According to the Minister’s own figure the rise in the cost of living has absorbed 7 J per cent, of this 10 per cent.; and the retail price statistics on which his figure is based cover a more or less restricted range of household commodities. The cost of living has gone up in many ways, directly and indirectly. Rates have gone up, as the ratepayers of Invercargill and other parts of Southland are now discovering; tram fares have gone up—not because of “outside influences” but largely because of the Labour Government’s legislation. Altogether, most people will have reason to accept Mr Cornwell’s estiriiate of 10 to 12| per cent, as being nearer the mark than Mr Sullivan’s 7£ per cent.; and they will also have been able to see from their accounts and price-lists that the rise in prices is continuing and in many cases accelerating, while wages are practically stationary. In other words, although wage rates are higher, real wages are falling. The wage-earner is finding his money of less and less value to him in terms of the goods and services by which he lives. And, to return to those pre-elec-tion promises, he is still paying sales tax, other taxation is heavily increased, and the exchange rate remains at 25 per cent. There are 37,000 unemployed and 22,000 of them are on sustenance without work. The Government should distinguish its own “splendid achievements” from the genuinely beneficent effects of world recovery—effects which in more than one instance it has done its best to stultify.

£ 1931-32 34,659,993 1932-33 36,868,510 1933-34 48,516,179 1934-35 42,418,351 Average 1931-35 40,465,758 LABOUR IN OFFICE £ 1935-36 53,188,515 1936-37 64,138,736 Average 1935-37 58,663,625