N.Z AS WORKERS’ PARADISE

Southland Times, Issue 23736, 7 February 1939, Page 6

N.Z AS WORKERS’ PARADISE

“CREDIT CONTROL WILL

SUCCEED”

OPINION OF TASMANIAN TREASURER

The opinion that the Government's policy of controlling 'credit is fully justified and that it will succeed was expressed by the Hon. Edmund DwyerGray, Deputy-Premier of Tasmania and Treasurer to the Tasmanian Government, who is returning to Melbourne by the Maunganui after a visit to New Zealand. Interviewed on the Maunganui at Bluff yesterday, he advanced the opinion that already the Dominion was relatively a workers’ paradise and would become increasingly so. The Labour Party, he said, would govern the country for a generation or more. Mr Dwyer-Gray arrived in Wellington on January 2 with the Hon. J. McDonald, M.L.C., as a delegation to New Zealand on behalf of the Tasmanian Government. Mr McDonald left Wellington by the Awatea on January 24. The object of the delegation, it was. stated, was to inquire into the financial and economic effects of the New Zealand Government’s departure from ths orthodox financial system, and to learn as much as possible of the financial and banking system here and of the country’s new scheme of licensing imports and exports. ; Community control of credit was going to succeed in' New Zealand, said Mr Dwyer-Gray. This was an unforgivable offence in the eyes of many. An argument advanced by objectors was that the Reserve Bank’s published accounts showed that it had advanced £13,199,000 to the Dominion Government up to November 21 last, and that the December figures would undoubtedly increase this debit. However, to begin with, £4,699,000 of this amount represented the present year’s loan to the 'Marketing Department, and had been advanced against the very tangible assets known as dairy products, and would therefore be completely extinguished when those products were sold by the Government, unless the prices actually realized failed to reach the guaranteed prices paid to dairy farmers.

STABILIZATION OF INDUSTRY The Government’s dairying policy was undoubtedly -justified by the results, said Mr Dwyer-Gray, and had stabililized completely one of the country’s greatest primary industries. Of the remaining £8,500,000 of the amount advanced by the Reserve Bank, he said, £5,000,000 “of this extension of community credit for the good of the community” represented home building, which he considered was proceeding very rapidly in New Zealand. On this £5,000,000, the Government, as the delegation had learned, paid the Reserve Bank £1 5/- per cent, but, as the bank’s profits belonged to the Government, this merely meant that the Government transferred the £1 5/- per cent, from its Treasury pocket into its Reserve Bank pocket. “The present ‘financial crisis’ in New Zealand, which resulted in the adoption of the system of licensing imports and exports early last December will, I think, be successfully overcome,” continued Mr Dwyer-Gray. '“Further, only New Zealand’s importers—and by no means all of them—the New Zealand daily Press, which is prejudiced and entirely and unreasonably anti-Labour, and the satellites of orthodox finance in London, Australia and New Zealand, are putting up any sort of protest. It might be that the purchasing power of the community has increased a little too rapidly, with the result that when the people had emptied all the stores of the Dominion of locally-manufactured goods, imports became unduly stimulated. “However, it cannot be denied that the depletion of New Zealand’s reserve funds in London, accompanied by adverse changes . with the Dominion’s overseas balance of trade, forced the Government to adopt strong means of cure.” ADVERSE TRADE BALANCES Mr Dwyer-Gray said that, as he had already reminded the Tasmanian public, New Zealand was not the only Dominion whose reserve funds in London and whose overseas trade balance had recently been adversely affected. In 1936-37 Australia had a favourable overseas trade balance of no less than £45,000,000 in Australia currency, and after paying its overseas interest of £27,500,000 this left £17,900,000 to be added to its reserve funds in London or used for other payments. But in 193738, he said, according to the approximate figures supplied to him in Sydney on his way to New, Zealand, Australia’s favourable trade balance was only £14,400,000, or £13,100,000 short of the amount required to pay Australia’s interest bill.

“It is admittedly true that the London reserve funds held by the Reserve Bank became reduced from £16,534,000 in December 1936 to £7,700,000 in October 1938,” said Mr Dwyer-Gray, “and that the London reserves of the trading banks, much of which might not be available for Government use, fell from £11,546,000 to £4,156,000 in the same period; it is also true that many unpatriotic New Zealanders transferred their investments to other parts of the world, including Australia. It is quite possible that the Dominion’s new policy will adversely affect Australia. But Australians must face the facts, and the Federal Government could prevent these adverse effects by revising its imports and transferring to New Zealand a reasonable proportion of its imports from foreign countries. If it fails to do this, the Federal Government will be x-esponsible for any unfavourable reaction of New Zealand’s present policy on Australian trade.” ATTITUDE OF IMPORTERS Discussing the attitude or New Zealand importers to the new regulations, Mr Dwyer-Gray said they had been busy during the past few weeks drawing attention to the fact that the Government’s policy might cause unemployment by restriction of their business and consequent reduction in staffs. They forgot to add that this would be more than balanced by the direct encouragement given to local manufacturers whose business would rapidly expand. Some British propagandists, he said, claimed that British interests would suffer, whereas precisely the opposite would be bound to occur.

“The New Zealand Government’s policy is fully justified and it will succeed,” maintained the Deputy-Premier. “Others are gloomily predicting big increases in the costs of production and in the cost of living, entirely forgetful of the fact that Parliament has already enacted legislation which will enable the Government to control prices and prevent profiteering. The Government makes no secret of the fact that its present policy is intended to protect and raise the standard of living of the people of the Dominion which, today, is probably the highest in the world. “Already, the country is relatively a workers’ paradise,” he said. “It will become increasingly so and the Labour

Party will undoubtedly rule this Dominion for a generation or more. In mv opinion, the Labour movement in New Zealand is distined to achieve one of the most complete triumphs m the story of man by making a real success of democracy for the first time m history. Nothing but a destroying war can prevent it.’