IMPROVED OUTLOOK

Taranaki Daily News, 15 July 1933, Page 5

IMPROVED OUTLOOK

MEW ZEALAND’S POSITION MR, COATES’ HOPEFUL REVIEW. POLICY OF THE GOVERNMENT. Appreciation of the manner in the people of New Zealand had faced the effects of the depression and confidence that the future held promise of a marked improvement were expressed by the acting-Prime Minister, the Rt. J. G. Coates, in his address when opening the 32nd annual Dominion conference of the New Zealand Farmers’ Union yesterday. He reviewed the measures taken to meet the situation, and expressed appreciation of the courage with which the; people of the Dominion had faced their difficulties. As a result of the economies which had been effected by the Government, the reduction of interest, and the raising of the rate of ex- , change, he said there were indications that better times were in store. The acting-Prime Minister, whose remarks were closely followed, said that he was aware he was talking to people who knew not defeat. In 1929 the Dominion appeared to be floating along on the crest of a wave, and good prices were being obtained for primary products. Then in 1930 came the sudden drop in the price of products. The Government had also had its difficulties to face, and effected some £10,000,000 in economies. If facts meant anything, the country had at last reached the bottom of the depression, said Mr. Coates. The great difficulty was the amazing suddenness with which the fall took place, but it might be that the recovery would be as rapid. The country could not expect a recovery until steps were taken to raise the prices of products. The suddenness with which the drop in prices had taken place had rendered it impossible to adjust costs with prices. The amalgamation which had taken place of political parties had been made to endeavour to bring relief. Prices, however, continued to fall, and the Government had gone as far as it was possible to reduce the cost of living. / PROBLEM OF UNEMPLOYMENT. Th unprecedented growth of unemployment, continued Mr. Coates, was another problem which the Government had had to face, and all its efforts had been directed upon it. In the meantime it had been possible to reduce much of the overhead charges. A general reduction of interest rates was one of the first matters undertaken, and this was the general pojicy of every government to-day. New Zealanders could be proud of those who had accepted cheerfully a reduction of 20 per cent..in their interest rates. The Government’s aim had ■been to get interest rates down to the lowest possible level. Local bodies had played their part in getting a new interest rate. inflation defended. After reducing costs and wages, the problem of whether an inflationary policy should be adopted or not had to be considered, continued Mr. Coates. What the Government must be sure of was that no mistake was made in the policy which was ultimately adopted. Few had a clear idea of what lay behind the raising of the rate of exchange to 25 per cent. Everyone who had watched New Zealand grow must know that the primary products were the basis of the country’s prosperity. New Zealand • budgetary situation showed that the farmers were not getting on too well. Many proposals had been discussed with a view to lowering the costs of production and increasing the farmers’ income. The Government, proceeded Mr. Coates, saw that it was useless to continue the deflationary policy, and some other form had to be thought out He had had a cablegram from Mr. Forbes stating that it was the consensus ci opinion in England that New Zealand could have taken no other step than to raise the rate of exchange. Much of the criticism which had been levelled against inflation had come from interested parties. That the Government had been justified in the stand it had taken was proved by the fact that farmers’ cream cheques had been substantially raised, and he felt sure none of them would care to go back to the lesser amount. The raising of the rate of exchange had certainly helped to bridge the gap in the price of primary products. At the same time there had been little or no increase in the cost of living. QUESTION OF RATES. Mr. Coates said that the question of rates was a most important one. _ Many proposals had been put forward, including that of derating, but he could at once tell them that derating was impractical . , A voice: It has been done in other countries. ; „ “If I know anything about the farmer, said Mr. Coates, "I know he is willing and ready to pay all fair charges.” A fair distribution was needed of the load which had to be carried, said Mr. Coates. It was not temporary measures that were wanted, but a well-defined policy. The Government’s policy was to . protect the capital in farms in order that it would be available for future use. It was impracticable for people to suggest a general system of derating. Proceeding, the acting-Prime Minister said his difficulty was as to how much the public purse could stand. This year they had been able’to square the Budget, though reserves had had to be drawn up. Sinro January last a further check had been made, and it was found that there was now another million to credit, which meant that the deficit would be only i £3,500,000. The Government’s aim was to have a balanced Budget, as it must, square the accounts at the earliest possible moment if the Dominion was to maintain the high name it had enjoyed for so long. BRIGHTER OUTLOOK. There had been a depletion of stock in New Zealand, particularly breeding ewes, and possibly too mafiy lambs had been exported, said Mr. Coates. There had been a falling-off of three million in sheep, but the position was now better. He believed there was a great future before the Dominion. Since the Ottawa Conference New Zealand was assured of an ever-increasing share of the Empire’s pig market. With a shortage of wool in South America and Australia, and with the Dominion decks clear, there should be a good demand for New Zealand wool next season. There were indications of an improved tone in the wool and meat market, and the outlook was better than it was a few months ago. He would like to say how much the Government appreciated the manner in which the farmers of the Dominion were standing up to their difficult task. This was very evident from the fact that this year had seen a record for production. It was hoped that the world conference would give some guide for the future; if not, the people of New Zealand would simply have to grit their teeth and see the depression through.