The Daily News THURSDAY, JUNE 28, 1934. HIGH EXCHANGE RATE.

Taranaki Daily News, 28 June 1934, Page 4

The Daily News

THURSDAY, JUNE 28, 1934. HIGH EXCHANGE RATE.

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It would be too much to expect that the views of the New Zealand Importers’ Federation and the Minister of Finance, the Rt. Hon. J. G. Coates, would coincide over the question of the high exchange -rate. But the conduct of the wrangle that is going on between them is anything but edifying, and the sooner Mr. Coates realises this the better. The community does not desire to see him apparently satisfied with scoring debating society points over opponents of. the Government’s financial policy. It wants, and is likely to insist upon, a plain reply from the Minister to the pertinent question the Importers’ Federation has propounded. On occasions the Government has taken credit to itself for the benefits conferred upon the Dominion through the higher exchange rate. It is now requested to state plainly and definitely what the cost of those benefits has been. The issue is perfectly plain, and the inquiry made by the importers entirely justified. Everyone gives the Government credit for choosing its exchange policy with a single-minded desire to assist the Dominion in a time of crisis. The Ministry was warned that the cost of the expedient would be heavy and the benefits doubtful. The reply was that all contingencies had been considered, and the Government felt that no other policy but that of raising the rate of exchange was practicable. Now it is asked to show what the cost has been, and there seems, a peculiar diffidence about giving the information. There can surely be only two reasons for the Ministry’s silence. Either Mr. Coates is unable to state what the cost of high exchange has been, or he is frightened to let the community know the liabilities the Ministry has as-’ sumed in its name. There seems little doubt that the position in regard to imports will not be as satisfactory as the Government hoped. The anticipation appears to have been that when importers had become more used to the high' exchange rate and when stocks, held in the Dominion had been more nearly ex 7 hausted the flow of imports would become more or less normal. The Customs returns show that this forecast has proved incorrect, and that the volume of imports continues to fall. It may be that in spite of this, in spite of the costs, direct and indirect, the Government can justify its financial policy. But such justification can only be possible by taking the community into the Confidence of the Ministry. Mr. Coates waxes facetious over the alleged miscalculations of the Importers’ Federation. There is really little in his main point, viz., that whether exchange was increased or not the sales tax would have to be imposed to balance the budget... It was quite problematical, but when the exchange was increased there was absolutely no alternative if the national finances were not to get out of hand. But assuming Mr. Coates is right in his contention, the best, indeed the only corrective to such errors is to give the exact figures and leave the country to judge whether the policy is wise or not. The position is too serious for the keeper of the national purse to be wasting his time bandying arguments about the meaning of words. The whole community, not merely the importers’ section of it, is vitally concerned with the financial policy of the Government. It has a right to the fullest and the promptest information the Government can supply, not only in regard to the cost of the policy in cash, but its repercussions upon trade relations with Great Britain and elsewhere. The taxpayer knows there is a liability ahead, and he knows that ultimately he must meet it. He has every right, therefore, to demand a plain statement of 'the position without any equivocation so that he may be able to judge whether the policy he is asked to support is shaping towards recovery or disaster. So far he has received only cheap and rather flippant bandying of words from Mr. Coates, and is getting just a little weary of the Minister’s lack of candour.