NEED OF TRADING WITH BRITAIN

Southland Times, Issue 25763, 29 August 1945, Page 3

NEED OF TRADING WITH BRITAIN

Generous Gesture Recalled

BUDGET DEBATE IN HOUSE (PA.) WELLINGTON, August 28. Resuming the Budget debate in the House of Representatives today, Mr F. W. Doidge (Nat.; Tauranga) said the war had created a political upheaval, and the result of the British elections reflected not so much the electors’ request for a Labour Government, as a war weary people’s desire for a change of Government. The term new British Government would not produce startling revolutionary changes. Mr Attlee was likely to be Britain’s most cautious Prime Minister, and the attitude of the present British Government towards the Dominions was unlikely to be as generous as that of previous Governments, Britain and the United States were about to become involved in a titanic trade struggle, and if Britain did not double her export trade she would be “sunk,” and we in the Dominions would inevitably feel the result. New Zealand must exert herself and help Britain more than ever before in our history. The Minister of Finance gave glib assurances that we were willing to spend our sterling surpluses in London, but actually we were spending much of those surpluses in the United States through London. Why was it that a contract for hydro-electric equipment worth £500,000 had recently been let to the United States? That was not helping the British working man. Mr F. Langstone (Lab., Waimarino): What about the National Party’s affinity with the United States? BRITAIN’S GENEROSITY Mr Doidge said that even if the United States’ price were lower, New Zealand should give its contracts to Britain. Britain had been generous with New Zealand over the lump sum payments, and we should be equally generous to Britain. The United States was the richest country in the world; it was glutted with gold and would undercut Britain whenever possible. The United States took little from the rest of the world and would probably take less in the future. She was determined not to face another 13,000,000 unemployed. How was the rest of the world going to get the dollars necessary to pay for American goods? It appeared that the United States, through the Bretton Woods machinery, was prepared to lend gold to the rest of the world tos enable other countries to buv dollars. Mr Doidge asked if the New Zealand Government was waiting on a lead from London before commiting itself about the Bretton Woods agreement. He personally opposed the Bretton Woods proposals because they were damaging to Britain’s trade recovery. Discussing the concern over New Zealand’s import restriction policy which Ihe and the Leader of the Opposition I encountered during their recent visit to I Britain, Mr Doidge said he felt sure the | new British Government would not stand for the fiscal policy pursued by the Government in New Zealand. He said the Budget disclosed that under Lend-Lease New Zealand owed the United States about £25,000,000. The Minister of Finance apparently still held the view that there would be no day of reckoning, but we should now ourselves approach the United States and seek a reckoning agreeable to them. LUMP SUM PAYMENT While we had supplied the United States at prewar prices, she had charged us prices which were treble the prewar level, said Mr Doidge. Britain, on the other hand, gave us a lump sum of £24,000,000 to cover such a discrepancy between the prewar prices we charged Britain and the wartime prices Britain charged us. If we asked the United States to do as Britain had done, the United States would probably owe us between £20,000,000 and £30,000,000. The Americans would doubtless regard such a claim as just, and if it were not made, would regard the New Zealand Government as a “bunch of saps. The United States did not want charity from US Mr T. H. McCombs (Lab., Lyttelton), replying to Mr Doidge’s suggestion that the Government’s financial policy was leading to serious inflation, quoted examples of the cost of living figures for 1926, which were higher than the present day prices, mainly gas, electricity, bread and tomato sauce. Opposition Voices: What about coal. Tell us the price of a suit. Are you allowing for subsidies? Mr McCombs went on to say tnat the cost of living had increased by 430 per cent, in Canada. Our inflation had been mild compared _ with that m other countries, and he said that where we paid a first-class typiste £4 or Lb here, her salary was the equivalent or £7OO (N.Z.) in the United States. PREVENTION OF INFLATION

“The Government’s financial policy as a whole has gone a long way to prevent the inflation we all feared, he said. “Other countries will be in a much worse position than we will be when war expenditure ceases it there were to be a settlement of LendLease, it had already been stated from the Government side of the House that we were not prepared to accept a settlement based on a disparity between prewar and present-day prices. Mr McCombs said the order for electrical equipment to which Mr Doidge j referred was actually shared between i Britain, Canada and the United States after world-wide tenders had been called for. At the time we were calling tenders British manufacturers had quoted prices which were obviously prearranged. The Minister of Industries and Commerce, Mr Sullivan, was in Britain at the time and was asked by Dr Hugh Dalton, who was then President of the Board of Trade, to hold up the contract for a fortnight This was done and Dr Dalton then told British manufacturers that they were ruining British export trade and that they must submit independent prices. This was done with the result that Dr Dalton gained for Britain £500,000 worth of trade which would otherwise have been lost through the activities of the private enterprise ring. This Government wanted to place every possible penny of trade with Britain, but it had to deal with honest business methods. Mr McCombs said that New Zealanders who wanted to help Britain should replace their American cars with British ones. He did not want to see the British car resume its prewar place on the New Zealand market with everybody thinking the thing to do was to buy an American car. Mr W. Sullivan (Nat., Bay of Plenty): Will the people get licences to import British cars? Mr McCombs: They will get them from this Government before they will get licences to buy American cars. SALES TAX Defending the import control policy, Mr" McCombs, said it was necessary not only to ensure that New Zealand got the best possible use of its limited exchange, but also to direct the maximum trade to Britain. The British Government itself was adopting a similar policy. Mr S. W. Smith (Nat, Bay of Islands), in his survey of the Budget said one of the strongest platforms on which the Government was returned was the abolition of the sales tax—a platform which had broken down. Mr Doidge: That is not the only one either.

Mr Smith said the sales tax had been increased to 20 per cent by the Gov-

ernment, despite its one-time opposition to such a tax. The people of this country had not complained unduly at the payment of taxes for war purposes.

Government voices: The Opposition has, though. Mr Smith, after dealing with several items of revised war expenditure estimates, said we seemed to have reached the stage where we now talked of millions of pounds where we once spoke of threepences. Increased war expenditure when the war had ceased was an insult to the intelligence of the people. Mr J. Thorn (Lab., Thames) said it had to be remembered that the revised figure of £139,000,000 for war expenditure was an estimate not for the present financial year, but until complete demobilization had been achieved —a different thing altogether. It should also be remembered that £68,000,000 would go directly to servicemen and women in pay, allowances, gratuities and deferred pay. The Opposition in clamouring for a reduction in taxation overlooked the fact that most members of the forces would be receiving pay or allowances until the end of the financial year and some of them after that. Taxation could be reduced only at the expense of servicemen unless we defaulted in our payments, which was unthinkable. DECENTRALIZATION URGED < Mr R. G. Gerard (Nat., Mid-Canter-bury) said the Government had been advocating decentralization of industry, but had not gone far enough with it. The dehydration plant which was installed at Riccarton should have been placed in a country town. He believed the Minister of Housing was sympathetic enough, but it was extremely difficult to get’housing for country towns. The usual answer to the claims of such towns for the allocation of industries

to them was that there were no houses available. Decentralization would improve the health of factory workers and enlarge the amenities of the people in country towns. We tended in New Zealand to build our amenities too much around cities and to educate the people too much for city life. There should be a rural bias in our education. Apy policy of dencentralization should be accompanied by a policy of increasing our population. People should be educated to the idea that parenthood was the duty and privilege of good citizens. Mr Gerard paid a tribute to the work of the staffs of the Post and Telegraph and Public Works Departments in repairing the damage caused by recent storms. He said the Government should go into the question of insurance against snow and flood loss on a national basis to see if it were possible to devise some form of insurance to protect farmers against losses such as Canterbury experienced in the recent disastrous visitation. A co-operative scheme would be best, but the Government should take the initiative, perhaps in Consultation with the leaders of the various produce boards. BUDGET PRAISED Mr Clyde Carr (Lab., Timaru) said the Budget was magnificent. It was inevitable that the immediate aftermath of the war should call for expenditure on a sustained high level. Discussing decentralization, he said the Government had actively supported the policy of dispersal of industry and was applying a similar policy to Government departments. The Rehabilitation Department had been very effectively decentralized with local offices becoming more and more autonomous.

Mr Carr said that if Government members advocated reform of the money system it was not because they supposed the money token could replace real wealth, but it should be adequate to represent that real wealth without either inflation or deflation. Mr Carr also advocated local industries in New Zealand rather than branches of overseas firms in order to foster the skill and enterprise of our own people and .to retain profits within the Dominion rather than sending them out of the country.

Mr H. J. D. Acland (Nat., Temuka), reviewing the problems of the family man, said that one naturally looked to the Government to give a lead to assist him, but there was little in the Budget to secure any relief from the war burdens he had to bear. The family man undoubtedly carried a heavy burden in this war, and his living costs had increased greatly out of all proportion to those of the rest of the community. Members of the community who were earning between £3OO to £6OO a year and who were producing goods and services essential to the country’s development were receiving no consideration from the present Government. Mr Acland made a plea for the average working man and woman who, he said, should have more time and amenities at their disposal, particularly by affording them more help in their own homes.

The debate was interrupted by the adjournment at 10.30 p.m.