FINANCIAL POLICY

Wairarapa Times-Age, 31 July 1939, Page 6

FINANCIAL POLICY

VIEWS OF THE ASSOCIATED CHAMBERS ' NEED OF LIVING WITHIN INCOME. y LOWERING OF TAXATION ADVOCATED. (By Telegraph—Press Association.) WELLINGTON, This Day. A statement cn financial policy and the economic position of New Zealand, issued by the Associated Chambers or Commerce following on a meeting of the executive, says: — “The securing by the Finance Minister of certain export credits from Britain gives New Zealand some little relief from a dangerous situation, and; Mr Nash is to be congratulated on the' arrangements he has been able to make in the difficult and unfavourable conditions that existed. At the same time, we consider it imperative at the present juncture to sound a warning note that the danger confronting the Dominion has not been removed and that the financial position of the country appears to be steadily retrogressing. The finance arranged provides no permanent solution of the difficulties that led to the seeking of it. Britain has not been required to give pledges, but it remains necessary to repay the short-term credit obtained to obviate the necessity of seeking credits again in 1940, and to raise the credit standing of New Zealand, to assist the £17,000,000 loan conversion operations and to revive confidence and to encourage the investment in the Dominion of local and foreign capital. “After a review of the causes that led to the Government’s imposition of import selection and control, the statement says: “The Government, like other people, must live within its income, and must confine its expenditure to what it can get in ordinary revenue and what it can borrow from genvine savings. The adoption of this rule alone would ensure freedom from inflation.

- “Whatever steps were taken now, if this rule were not adopted and rigorously adhered to, the present difficulties, which were a direct consequence of inflation, must be expected to recur or to become accentuated. The statement takes the view that since rising costs of production in New Zealand have’been a factor tending to check exports, it is essential that conditions on public works employmen' should be less attractive than employment in farming and other productive pursuits. The Government is also urged to encourage the return to New Zealand of investment capital by removing excessive regulation and restriction on commerce and industry, and by removing arbitrary limits on interest rates. A longer term in the periods of labour awards is also advocated, so that businesses may be able to plan ahead. It is considered thaf there should be greater flexibility in hours and conditions, especially in those industries that contribute to the building up of London funds. The taxation burden on industry, particularly primary industry, should be lightened. This is essential if production is to be maintained and expanded. An attempt should be made to increase the population by attracting suitable types of immigrants.