INDUSTRY AND TRADE

Southland Times, Issue 25747, 10 August 1945, Page 4

INDUSTRY AND TRADE

GOVERNMENT POLIOS . OUTLINED - *

(Special) WELLINGTON, August 9. “The Government intends to foster our export trade as much as possible and to endeavour to find new avenues for such trade, thereby increasing our ability, to import, but it is clear that only a minority of the population can be employed on farms. That being so, the only way we can achieve a better standard of livihg for everyone is to manufacture more goods in New Zealand,” said the Minister of Finance, >Mr Nash, in his Budget speech in the House of Representatives tonight. “The policy is to obtain full employment in making those things that can be most economically manufactured here and particularly in industries that can utilize our own « raw materials,” Mr Nash added. “Much of Ihe additional activity will come by way of expansion of existing industries, and many new ones can be organized efficiently—and we must strive for efficiency—without help from overseas. But in other cases we lack the necessary knowledge and skill and alone cannot hope to keep abreast of the larger countries in research work. In such cases the best course is to invite and encourage successful overseas businesses to bring the necessary plant and key personnel and establish brarich factories in this Dominion. It should be clearly understood that development of a policy of expanding manufacture iii New Zealand does not mean reduc-

ing the aggregate value of our imports, but it will gradually involve some change in the nature of such imports. From necessity we will utilize our overseas resources to the full—and we cannot do more than that—in importing the wide range of commodities that we cannot manufacture economically in this country.” EXTERNAL TRADE Referring to external trade, Mr Nash said that as the United Kingdom bought the vast bulk of New Zealand exports it was plainly to the interest of New Zealand to buy British goods wherever quality and price were reasonably competitive. Also, wherever it was practicable, United Kingdom industries would be given an opportunity to put forward proposals for establishing factories in New Zealand. While adhering to the long-estab- |: lished policy of preference for British ; goods, the Government was fully : aware of the interdependence of all 1 countries in economic welfare and was ready at any time to support inter- - national arrangements that would 1 facilitate an expansion of world trade ' and stabilize it at a high level. At the same time, the Government would not 1 lose sight of the fact that prosperity ’ began at home and that the first and 1 greatest contribution that New Zealanders could make to a better world ■ was to bring about full employment J and a higher standard of living in their own country. “Within this country, we have a serious housing shortage to over- ' come,” Mr Nash said. “We are short of power and have a leeway to 5 make up in other directions, but we 1 are fortunate in having no devastated f areas to rebuild nor have we any i gigantic wartime industry to convert * to pea'ctime purposes. Relatively our c problems are simple compared with t those of many less fortunate coun- r tries. The Government affirms that r one of the great truths that has been given publicity since the International t Labour Conference at Philadelphia o last year is that ‘Poverty anywhere s constitutes a danger to prosperity I everywhere.’ ” . t'.

DANGER OF INFLATION Even although the United. Kingdom proposed to give exports a considerable measure of priority over her own internal needs, it would obvious-

ly be several year's after the war before New Zealand could hope to catch up with her essential requirements of imported goods. In addition, delay in obtaining plant and machinery from overseas, added to the fact that it was impossible to do everything at once even in the fortunate circumstances obtaining in the Dominion, would mean delay in building up a flow of consumable goods sufficient to meet the tremendous demand represented by the huge wartime accumulation of purchasing power belonging to the people. Thus in the immediate postwar years there was much greater - danger of inflation than during the war. Prices soared more after than during tire last war, and potentially the position could be much worse this time than it was in 1920. The people would want free- I dom from controls—which was understandable after six years of war—-and would naturally feel that having saved their money and gone without things for so long they were entitled to spend their money freely when the war ended. Continuation of the stabilization scheme and of price control over this critical period would be a vital necessity, but price control procedures would be so altered and simplified as not to impede the' expansion of production which alone could provide the real solution, an adequate supply of goods and services. To obtain this all-import-ant expansion in production it was the policy of the Government to give reasonable priority to factory buildings, to accord any necessary priority or sponsorship in the importation of essential machinery or tools, and generally to give every practicable assistance and encouragement towards the reconstruction and expansion of the country’s industries. The Government would ensure that any worthwhile activity that was economically sound was not held up for lack of finance.