NO – CONFIDENCE MOTION

Timaru Herald, Volume CXXXVII, Issue 19300, 29 September 1932, Page 8

NO - CONFIDENCE MOTION

MR HOLLAND ATTACKS GOVERNMENT UNEMPLOYMENT POLICY CRITICISED By Telegraph—Press Association. WELLINGTON, September 28. When the debate on the Address-in-Reply motion was resumed in the House of Representatives this afternoon, Mr H. E. Holland (Leader of the Opposition), in accordance with notice given on Thursday, moved the following amendment: — “In conclusion, we deem it our duty to represent to Your Excellency that Your Excellency’s advisers do not possess the confidence of tne House, because (1) they have made the financial and industrial depression worse by their policy of deflation and cf reducing wages al j“ salaries; (2) they have failed to utilise the credit resources and cuirency facilities of the State to reestablish prosperity, by restoring tne pm-chasing power of the people as a whole. (3) They have failed hop--lessly to grapple effectively with the unemployment situation, and Jbah® living and working conditions ot tne 1 unemployed progressively worse W They precipitated and accentuated a marked and deplorable decline in prices, equity, and purchasing power and even when the evil results 01 deflation were only too evident they have failed to do anything to arrest the decline. (5) They failed to give consideration to proposals for dealing with the present financial position advanced from time to time by the Labour Party and others, including a State Central Bank, with complete control of banking, currency and credit.” Mr Holland criticised at length the

Government’s unemployment policy, and asserted that many hundreds of men had been withdrawn from the staffs of the Railway Department and other public undertakings, and put on to unproductive work, such as cutting gorse and blackberries. In the meantime, through the staffs not b e j;*3 kept up to strength, repair work in the Railway Department was falling behind, and the country would eventually

lose heavily. Mr Holland estimate,! that there were no fewer than 120,000 unemployed (counting men, women and boys) in New Zealand at present, and these people could and should be set to work on undertakings of value to the people of the Dominion. A Labour Government would at once take steps to transfer men from uneconomic to economic undertakings. There was necessity for a vigorous public works policy on projects of value, such as main and secondary highways, and road access to backblocks. The construction of econonlii railways should be resumed, even if J-* did involve taking back the pow-er that had been given to the Railways Board. It was a ridiculous policy to give a r.ot very capable Board the right to say to the Government: “You have no power to enter upon a policy railway construction unless you get our con sen. first.” There was room for higher development of primary industries, and in this connection Mr Holland regre.ted that steps had not yet been take! to secure a definite trade agreement with other countries, in order to increase the market for the Dominion s exports. The day for tinkering with tariffs was long past. He did not w.y.i to refer in detail to Ottawa until Mr

Coates had presented his report, but everyone must know that great dang:-! was threatening our secondary industries. Mr Holland urged greater development of the secondary industries. The Dominion should import no goods that could be produced here in sufficient quantities and on an economic basis. He would not bother with the tariff. He would simply inform overseas countries that New Zealand did not propose to import goods she herself could produce, on the lines he had indicated. Mr Coates: “Irrespective of cost? Mr Holland: “No, because a responsible Government would take steps to prevent abuse of that description. Continuing, Mr Holland said New Zealand would have to devote more attention to the Home market than h.-d been done in the past. The purchasing power of the people should be increased, and one step in this direction should be an increase in pensions. Referring to currency reform, Mr Holland said the country's problem was to distribute the goods that were produced, and the fact people were starving in the midst of plenty proved that the present system of distribution was stupid and inefficient. The true wealth of the country was in what it produced, and the Labour Party would support establishing a Central Bank to control currency. The State could produce money just as banks could produce it. This would not produce inflation, because it would merely be a case of manufacturing credit, backed by the wealth produced by the country. He quoted at length from works by banking authorities, and said Russia had a currency regulated by the volume of production. The Labour Party would regulate the price level, and would increase currency and credit as production increased. The purchasing power of any country was the purchasing power of the masses, and if the earnings of the masses increased purchasing power would also increase. Minister of Lands Replies.

The Hon. E. A. Ransom replied to Ml- Holland's reference to railway construction. He said no one would suggest that construction of a railway of economic value to the Dominion should be stopped. The Railway Boards recommendations had been actuated by the fact that the projects were not economically sound, and unless it cou.d be shown to the satisfaction of tne Board that resumption of work would be economically sound, it was not desirable that it should be proceeded with. The Leader of the Opposition had advocated increasing the workers’ purchasing power, but the Minister asked how this was to be done along the lines suggested, without increasing taxation. The purchasing power of a country was not a matter of currency alone. It depended on the commercial value of the goods a country produced. He was quite in agreement with the view that currency should be brought into fine with the value of production, and any conference which would achieve this result would be doing great service to the world. It was plain, however, that the currency problem could not be solved In any one country. Continuing, Mr Ransom said the land was the source of wealth of the Dominion, and it was the duty of the Government to do all they could for the people on the land. He believed that what was being done to bring about more Intensive production was the best thing to do at the P re8 ™“ time. Ottawa had proved that New Zealand could not stand alone, either In trade or currency. Trade within the Empire was a good thing, but was nov sufficient in itself, and other markets

would have to be developed. In 19- 9 ' foreign imports into New Zealand were valued at nearly 16 millions, while only between two and three millions worth of New Zealand’s goods went to those countries. However, those countries needed our primary produce, and an effort to secure a place in their markets should be made. A Labour member: “How does that fit in with the Ottawa Conference?” Mr Ransom said that the securing of new markets would not interfere with the Ottawa agreements, because the Dominions had no right to expect that Great Britain would or could always absorb the whole of what the Dominions could produce. The House adjourned at 5.30 p.m. Evening Session. The House resumed at 7.30 p.m. Continuing the debate, Mr W. F.. Parry (Auckland* supported the views expressed by the Leader of the Opposition on the subject of currency. He asked what objection could be raised to the issue of one pound in currency for every one pounds worth of goods produced in the country. The Hon. A. Hamilton: “You are speaking of a self-contained country. Mr Parry: “I am speaking of New Zealand as it is to-day.” Continuing, Mr Parry said the position throughout the world was that there was plenty of everything except money. There was an abundance of goods of all kinds, and a remedy could only be found by providing the people

with money to buy these goods. Mr H. H. S. Kyle (Riccarton) criticised the renewal of the contracts for school text books. He said the Department should have its own copyright, and should have the books printed by public tender. He asked what business firm would renew a contract on a falling market. If the Minister tried that principle in business, he v.'ould soon be out of business. Mr Kyle condemned the action of the Government in giving the Education portfolio to a member of the Upper House. He declared so long as a system existed which permitted this, there would not be true democracy in the Dominion. He had been asked in Christchurch what he would do if a vote was taken on the subject, and had declared that he was willing to stand by his convictions, and “vote him out.” ~ ... Mr W Nasi: (Hutt) said that while he did not wish to belittle the difficu’ties the Government had to face, but he believed the Prime Minister had done more than any other individual to destroy confidence in the country s finances. He was satisfied that the country could be carried on without waiting for conditions to improve overseas. Mr A. D. McLeod (Wairarapa) said that some world solution of the mone-

tary problem must be found, otherwise civilisation would be in danger of collapsing. A cure could not be found in a small country like New Zealand. He quoted figures to show the fall In value of exportable primary products from New Zealand. Despite the increase in volume, the total drop over three years was 27 million pounds, of which 25 millions related to wco'., meat, and dairy products. He asked how any local handling of currency could meet that position. Mr J. A. Lee (Auckland! said there was no hope of a rise in prices in New Zealand while the spending power of the people in Britain continued to shrink, but one of the first essentials to economic recovery in the Dominion was fixed prices, in terms of New Zealand currency, for the produce of farms. Mr W. A. Bodkin (Central Otagc) said the day of big tariff walls for protection of Dominion manufacturers were to survive they would have to scrap their antiquated machinery and modernise their factories. He claimed that the best method of doing awav with unemployment was to settle men on small farms, because the men in the best position to-day were those on small areas which were not overcapitalised. Rev. C. Carr (Timaru) contended that the greatest problem in New Zealand to-day was a domestic problem. He had no" wish to dispute the seriousness of the world problem, but there was the strongest demand for us to face the local issue. The debate was adjourned on the motion of Mr A. J. Murdoch, and the House rose at 11.32 p.m.