LABOUR’S PLANS

Wanganui Chronicle, Volume 79, Issue 195, 21 August 1935, Page 12

LABOUR’S PLANS

Attack by Sir A. Ransom GUARANTEED PRICE BAIT FALLACY OF PROPOSAL In spite of the unfavourable weather at Marton last, night, there was a good attendance at the Civic Theatre when the Hon. Sir Alfred Ransom, until re cently acting-Prime Minister, delivered a pre-sessional address. He was accorded an attentive hearing and spoke for nearly two hours. Only one or two minor interjections were heard, and at the conclusion the speaker was accorded a heary vote of thanks on the motion of Mr G. L. Marshall. The Leader of the Opposition had objected to the Government increasing the life of the present Parliament to four years, Sir Alfred said, adding that it was a perfectly good point to make from the point of view of the Opposition; but the Government, which was responsible for the country’s welfare, foresaw that the depression would be prolonged and it took the time necessary to put its then proposals into operation. From the poiut of view of the country’s welfare, the results had justified the Government’s action. Naturally the Labour Party desired an election before economic recovery was in sight, and it it was successful at the polls it would reap the fruits of the Government’s good administration. On its part, the Government had not sought political popularity, but had done its best in the interests of the country itself; and he was prepared to show what measure of success had followed the administration, the full benefits of which were still to follow. No Fantastic Proposals. Mr. Savage had also stated that unless those already on the land were made secure, it was hopeless to establish -others. He (Sir Alfred) could well understand Mr. Savage’s hopeless outlook, because the latter had .failed to grasp and had not been a party to all that had already been done. The Crown tenants of tho Dominion had been assisted in many directions, and except in a few hopeless cases they were absolutely secure on their holdings. The question of granting further relief by way of revaluation was at present receiving consideration. So far as other settlers were concerned, they would have the benefit of the mortgage legislation, and other remedial measures which wore calculated to ensure the continued occupancy of their holdings. There was nothing fantastic or impossible in connection with the Government’s proposals. Mr. Savage had stated that with complete control of the monetary system and the proper planning of production, security of tenure should be guaianteed. But why was the Labour Party’s monetary system not clearly defined? Did he have a system of his own, or did he refer to one of the monetary systems advocated by different members of the Labour Party, which systems all differed in essentials? It was to be hoped that the system was not planned on that followed by Mr. Lang when he was head of the Labour Administration in New South Wales. It would be remembered that under that system the State Savings Bank had to close its doors, and on one occasion civil servants could rot be paid their salaries as the Treasury cupboard was bare. The New Zealand Government preferred to adopt a sound and well-tried system which would make for permanent recovery. Labour’s Dismal Outlook. Discussing other views of the Opposition Leader, Sir Alfred said that Mr. Savage’s statement that, unless the purchasing power of the masses kept pace with, increasing production, it was little use increasing production, was a dismal outlook, which quite overlooked the fact that the masses consuming our surplus production were not in New Zealand but in the United Kingdom, where fortunately for us a National Government, including Labour, was in charge and where a marked improvement was showing in trade generally, and where unemployment had been substantially reduced. Mr. Savage had also expressed deep concern for the State Advances Office, which he contended would be conjpletely destroyed by the Mortgage Corporation constituted by the present Government. It was difficult to appreciate his concern in this connection, because although the b>tate Advances Office had been absorbed by the corporation the general result would be in favour of the mortgagors, who on application would receive their money at a lower rate of interest. It would, of course, remove the office from political control, and that was contrary to the Labour Party’s policy. Mr. Savage had suggested that the shareholders would draw dividends. Had he studied the Act he would have known that there would be no dividends to share holders but merely a maximum return of 4£ per cent, on their shares. In the meantime all profits would go to the State to meet contingent liabilities. ‘‘Crocodile Tears.’’ As to Mr. Savage’s contention that the Mortgage Corporation would destroy contracts entered into between the State and its clients, the Minister said

the Opposition Leader again was merely shedding crocodile tears, as the change would tye only normal and the mortgagors could elect to retain the present terms of their mortgages. However, it was difficult to imagine any of the mortgagors so electing when on application they could have their interest charges lowered by converting to a corporal ion mortgage, with the additional advantage of a longer term and lower principal instalments. The Minister pointed out that Mr. Savage had bemoaned the fact that during the ten-years period ended 1933 dairy production had doubled. As a mutter of fact, it had increased by 25 per cent, since 1932, due to the efforts of dairy producers to counteract land prices. To-day the price of New Zealand butter in London was 94s per cwt., and the producer received an ad- j ditional 25 per cent, by way of exchange. It redounded to the credit of the Government that it had not taken any action during tho depression to restrict production. The Labour Party certainly played no part whatever in bringing it about. In addition, the Labour Opposition had not supported the useful legislation for the adjustment of farm mortgages, although Mr. Savage had made the point that the immediate problems of the farmer could be met only be readjustment of his mortgage! Air. Savage also had been out of step regarding his contention that the conversion of overseas debts should be attended to immediately. Recently a £10,000,000 loan carrying 5 per cent, had been converted in London at 3 per cent, at £9B 10s on long-dated terms. Moreover, £2,000. j 000 had been paid off. A Fallacious Guarantee. After reviewing Labour’s scheme of guaranteed prices for butter-fat, Sir Alfred said that the Labour Party apparently had revised its policy and now wished to penalise its old love, the wage-earner, in order temporarily to subsidise the farmer. It was most difficult to arrive at the cost of the Labour Party’s scheme, but on Air. Langstone’s figures it would amount tu approximately £11,000,000 for butter’ alone. Every Id subsidy on all primary , products would amount to over £5,000,000 per annum. The money must be found in New Zealand from one or more of the following sources:—Levy on imports, taxation, borrowing, creating money or credit, huge increase in exchange rate. The Labour Party denounced the 25 ! per cent, exchange rate, but a levy on imports on the basis advocated by Air. Langstone would mean an exchange rate equivalent to 250, as against. ,12.> , now ruling. The net result would bo total paralysis of trade and national disaster. If the cost were to be met from taxation, as advocated by Air. Savage, the burden would likewise be intolerable, and again there would be national disaster. In any case Labour had been given an opportunity to submit its scheme ol guaranteed prices to the recent National Dairy Association’s conference, and it was rejected by 68 votes to 20. i “The conference apparently came to the conclusion that the scheme was unsound in principle and would bring in its train more evils than it sought to remedy. So much, for guaranteed prices. Practical farmers would have none of it,” Sir Alfred said. Substance Not Shadow. Sir Alfred asked electors to compare such a concrete result with tho shadowy proposals of the Labour Party, and asserted definitely that there was nothing wrong with a Government which could provide such, assistance without increasing the National Debt. After referring in detail to the position.of the country when the Coalition Government hud to initiate remedial measures, the Minister said the Government’s economy measures had resulted in savings amounting to nearly £10,0(1(1,90(1 a year. Interest on internal debt had, by loan conversion, been reduced by £930,000 a year. Largely through the Government’s influence the bank rate had been reduced from 7 per cent, in 1930 to 4J per cent, in J 93-1. The increase in the rate of exchange had increased the national spending power by nearly £10,000,000 annually, thereby increasing business activity. Opponents of the Government had prediclod nothing but calamity from such a policy, but time had proved that, it had enabled many farmers to remain on their farms. Certainly the exchange rate had incurred an additional cost of £1,750,000 in remitting the charges on our overseas debt, and it had slightly increased the cost of imported articles, but, the gain largely exceeded these costs and the cost of living had not been appreciably affected. The Minister also discussed in detail and emphasised the ■value of the Alortgagors Relief Act. and the other measures designed to help rural mortgagors out of a morass.