TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 14th SEPTEMBER, 1936. COSTS AND CONSEQUENCES.

Te Awamutu Courier, Volume 53, Issue 3808, 14 September 1936, Page 4

TE AWAMUTU COURIER. Printed on Mondays, Wednesdays, and Fridays. MONDAY, 14th SEPTEMBER, 1936. COSTS AND CONSEQUENCES.

WHETHER the Government’s hous ing scheme will serve the public need depends largely on the effect of ruling policy in other directions. We seem .to. have emerged from one difficulty ifily to encounter another—from a state in which financial stringency and low costs are replaced by availability of finance and high costs. The paradox is easily understood since it brings to prominence the weakness of Government policy in periods of depression and revival. If money could be made to flow as easily as the Government makes available / housing finance it would appear that herein lay the cure for the depression withcut much, if not all, of the artificial fixations which have been resorted to du an effort to regiment the industrial and trade mechanisms. Because, when the two elements in policy are combined, the tendency exists for the one to defeat the other. As illustrative of

this- there is, in the report of the lands Department, a most significant passage:

"Progress of small farm settlement,'’ runs the report, "has not been maintained. Factors retarding the scheme are .... the increasing costs of many commodities, particularly building materials ”

This admission, from a department which enters the market as a purchaser and shares the civilian handicap of costs, is an eloquent example of the effects of the rising tide which policy in other directions has caused to flow, and it certainly suggests that the Commissioner of Housing has difficult days ahead. The Government was not unmindful of this when it announced its easy finance terms, be cause considerable reference was made to the barrier of costs. Private enterprise was cautioned under threat of Government controlled supplies if tne costs level mounted too steeply. But few in. the community will treat such a threat seriously, because it is no new thing for the Government to invade the merchant’s domain, and the results are not encouraging. What private enterprise takes in the form of profit is more than equalled by mismanagement and needless losses in official run concerns. The most enthusiastic Ministry faced with the necessity of a periodic accounting to the electors, is not likely to rush headlong into hazardous supply industries, and even a spectacular housing scheme will not justify such risks. The plain fact is that costs have been deliberately raised and no end of Government manoeuvring can escape the consequences when the Government is in the market as a purchaser. The effect must be to narrow the advantages ot the housing scheme. More houses are needed, and they must be provided quickly. It can be said that housing at this moment is the most pressing of all social problems, for on it so much depends—health, comfort and security. The same condition arose during and immediately after the Great War, when the same financial phenomena occurled. And a Government which had learned to advance liberally against a pressing public need was caught in the losses which swept so severely over the country when the bubble of inflation burst. Has the present Government the capacity to profit from that experience, or will it rush blindly on to similar disaster? It already has in its care a measure to adjust the affairs of the mortgagee and the mortgagor, and must have at its command the effects which arose out of conditions which are strangely alike to the availability of money and high costings which it has deliberately brought about to-day. Costs and consequences must be taken largely into the reckoning. It is one thing to build houses; it is not enough to overtake the housing shortage. The really important thing is to give to the asset in the form of a house some valuation that can have security value now and for all time. To, in short, reach a parity which does not fluctuate with the seasons or vanish when the day of reckoning arrives.