MR. FORBES’ NEW POLICY

Taranaki Daily News, 18 February 1931, Page 12

MR. FORBES’ NEW POLICY

LABOUR LEADER REPLIES OPPOSITION TO CUT IN WAGES. REMEDIES EUR THE DEPRESSION. Criticism of the Primo Minister’s statement of his new finance policy was made on Saturday at Westport by Mr. H. E. Holland, Leader of the Labour Party. “The first thought that will strike tho average reader of the Prime Minister's pronouncement,” said Mr. Holland, “will be that the Government’s .new policy, plus the abandonment of its railway construction schemes, leaves it where it has made unconditional surrender to Mr. Coates and the Reform Party on practically every item except the South Island Main Trunk line. There has never been in the history of any country such a wholesale dishonouring of election pledges, accompanied by an amazing determination to hold on to office in defiance of the electors whose confidence has been violated. “Mr. Forbes estimates there will bo a fall of about 20 per cent, in our export values this year, as against 1930. That is serious' enough, but is the position so utterly dismal as the Prime Minister’s statement would lead people to believe? The export values for 1930 were less than half a million below the yearly average of the ten years, 1920 to 1929, which period included two abnormally productive years. If the Prime Minister is correct, export values for the present year will, amount to about £40,000,000, or just about double the yearly average of our export values for the ten years immediately preceding the war. ’■

CAPACITY FOR RECOVERY". “I have'faith in the capacity of this country to make rapid recoveries from any period of economic depression, but it is quite clear to me that the policy which the Government is now putting forward will ac&aftuate our difficulties rather than end Offlgninimise them. “No one will quarrel with the Prime Minister over his desire to balance his Budget, but most will repudiate his method of doing it. There will be widespread resentment at ,the determination to place on the shoulders of public servants and other wage-earners the heaviest responsibility in the matter of sacrifices. Even if the position should prove to be as dismal as Mr. Forbes has painted it, his method of retrieving the situation would still be wrong. “A far more equitable method would be a super-tax on all incomes of, say, £5OO and over. Taxation on a graduated scale is always fair, because it ensures that money will be provided by those who are in the best position to pay, but even if wage reductions were admitted it is an extremely lopsided policy that levies a flat rate of 10 per cent on all incomes, irrespective of their dimentions. It means that a man with a small wage or salary pays out of all proportion in comparison with the highly-salaried official. If a raid is to be made on wages and salaries, why not commence at the top, drastically reducing all higher salaries without any exemption whatever. If that were done.it would not be necessary to attack incomes of lower-paid employees whose wives and families must suffer heavily from any reduction in wages. LOWERING INTEREST RATES. “The decision to reduce wages is definite and emphatic, but the Prime Minister adopts a different tone when me talks about interest rates. Wages must come down, Mr. Forbes says, but apologetically he makes what he , terms an earnest appeal to banks, mortgagees and stock and station agents to review each Individual mortgage case. It is for the Prime Minister to explain why he is content only to appeal to moneylenders. Why has he not applied the same legislative principle as in the case of the public servants and wage-earn-ers? A reduction of 2 per cent., or even 1 per cent., in the rate of interest would mean an enormously greater measure of relief to bona-fide farmers than any system of wage reduction.” Mr. Holland claimed that the relief to farmers from a reduction in wages would be infinitesimal. In the case of shearers a sliding scale agreement was in operation and any interference with that would be quite as deserving of condemnation as a proposal to dishonour other existing awards and agreements. The Prime Minister has refrained from any attempt io show to what extent his wage reductions would enable primary producers to cut their prices in overseas markets so as to compete successfully with cheap labour products of certain other countries. EFFECT ON LOCAL MARKET. The main effect of the wage reductions would be to deprive the local market of some millions of pounds, thus destroying the people’s ability to meet periodical and national liabilities, and the farmei’ would be hit as badly as the wage-earner in consequence.' “There is also another aspect of this question,” continued Mr. Holland. “Even if wage reductions were unavoidable, the first condition should he all-round reductions in the cost of rentals, wearing apparel, foodstuffs, etc., but there is no proposal to legislate in that direction. On the one hand, there is a drastic dragging-down of wages, and on the other, a pious hope that something will happen in the way of falling prices to offset the Government’s attack on wages. “There is no reference to the posi-

tion of workers in intermittent employment, such as waterside workers, miners and others, whose wages are never sufficient to give their families an average standard of living. Their incomes, already wholly inadequate, are to be still

further reduced. Mr. Forbes will have the task of formulating his excuse for reducing the wages of men with- less

than £3OO, while he gives liberal exemptions to income tax payers. “However, it is beyopd question that

there has been no reduction in the cost of living that will justify a 10, per cent, reduction in the wages of workers, and

:he Government may rest assured that

the Labour Party will oppose to the utmost its attack on the basic wage. No one knows better than the average business man- that wage reductions are not the way out, and the working farmer knows it, too. Mr. Forbes has now capitulated to the Reform Party and is proposing to continue the work begun in 1922 by that party at the dictation of the financial institutions.

“It is absurd to talk about placing railways under non-political control when Parliament must vote money with which to carry on the service. There is a danger that the new arrangement will mean practically handing the railways over to private control, and in that case it will not be in the public interest.

“During the war no difficulty was experienced in organising the credit of the Dominion. There is no reason why similar action should not be resorted to today. The whole of the Dominion’s credit should now be mobilised to infuse

life into industry. This is the time for extension of national industrial activity, rather than for a down-grade policy.”