The Wanganui Chronicle. THURSDAY, NOVEMBER 17, 1949 EXPLANATIONS WANTED FROM THE PRIME MINISTER

Wanganui Chronicle, 17 November 1949, Page 4

The Wanganui Chronicle. THURSDAY, NOVEMBER 17, 1949 EXPLANATIONS WANTED FROM THE PRIME MINISTER

a period of fourteen years in office and with all the sources of information available to it, the Labour Government should be in a position today to inform the public how it proposed to meet the new conditions that are now taking shape. There has been a. conspicuous absence of candour as to how these changed conditions are to be met. The sterling has been devalued as against the dollar. The United Kingdom would not have done this had it a choice in the matter. The step was forced upon the United Kingdom, notwithstanding, or because, it had had a Labour Government managing, or mismanaging, its affairs. The result of this development in the dollar-sterling relationship is that the United Kingdom has a reduced income and this income is likely to decline still further during the next few years. Something will have to be done to bring the income and outgo nearer to balance than it is today and so it is to be assumed that the United Kingdom will not be in a position to pay current prices for the produce which New Zealand will send. Even assuming that the present agreements for bulk pur-, chase still hold it is possible under the provisions of those agreements that in caeh year a drop of 74 per eent. in prices will have to be faced. In two years this will amount to a reduction of 15 per cent, in the export income and in three years it will move to 224 per cent. In view of this possibility what does the leader of the Labour Party propose shall be done? The public is entitled to learn from each political party what are its proposals for meeting this possibility which now amounts to a strong probability. The Labour Party claims that while it failed to open its many mouths to advise New Zealand how to extricate itself from the Great Depression it nevertheless had a secret formula which would have done the trick. The fact that it failed to communiuate this deep secret to the Labour Governments of Australia who were saddled with the same responsibility as that which was carried by the Coates-Forbes Administration in New Zealand may cause some scepticism to be entertained by the discerning electors. It is therefore an untried and unrevealed organisation and policy which must be employed to deal with any recession in New Zealand’s import-export income if the Labour Party is returned to office. What is that policy? What is the method by which that situation will be met? The public does not know. The members of the Labour Party do not know. The candidates now on the hustings on behalf of the Labour Party do not know. Nobody knows. It is reasonable to assume that the Labour Party is not today expounding a policy for offsetting a recession simply because it has not one in its possession or in its composite mind. Mr. Nash’s proclamation that there are £44,000.000 in the farmers’ pools account as a reserve for the day when a recession overseas reduces our export prices would be very comforting if the money was there. But unfortunately it is not. It is already spent. All that these accounts have in them is a claim upon the Government and all that the Government could do to make up any loss of overseas income would be to print more-money in New Zealand and distribute it to the farmers who would compete with the rest of the community upon favourable terms for the limited supply of goods that could come into the country. The way out of a depression when prices are low is to increase the quantity of exportable goods in order to offset, the price-fall. To do this the farmers would find it necessary to have fencing’wire and fertilisers to be able to subdivide paddocks and make possible-closer grazing and grass management. But. fencing wire is not made in New Zealand. The raw materials of phosphates and sulphates must be imported. To import wire and fertiliser overseas assets or credits arc necessary. But. in a recession it is these assets that become exhausted and what is available has to be conserved with great care because nobody knows how long a downslide of prices will continue nor the depths to which they will go. An extravagant policy in the early days of a recessive movement in prices would be most unwise and only a government of political gamblers would be so irresponsible as to engage in such a. policy. Such a policy would maintain for a time a false prosperity, but. as soon as the overseas funds were exhausted the country would be unable to import, essentials for industry, farming and general consumption. That is the policy which the Labour Government of the United Kingdom has followed and which has compelled the devaluation of the sterling. It would seem to be the policy which the Labour Government in New Zealand would pursue were it returned at this election and had to meet the same sort of situation. That, however, is not meeting the problem, let alone solving it. .All that the Government is committed to do in respect, to the farming community is to issue paper money to the extent of £44,000,000 against which there would be no corresponding supply of goods. That, is just the policy which the present Government, in its saner moments denounces. But its practices and its proclamations are at variance. It says one thing and does another. Inflation is denounued. and yet, inflation is deliberately planned. What is the deduction then to be made? First, that the Government has no thought-out plan for meeting a recession. Second, that it would play the x-ole of the gambler, plunging in the hope that its luck would serve it. Third, if its luck failed the holding of the reins of office would only be a headache for its Ministers and they, being incapable of handling the task, would be relieved of office. It is now the time when the public will consider whether it would be wise to repose confidence in an association of men who are inconsistent. Those men have endeavoured to mislead the public by claiming that they brought New Zealand out. of the Great Depression whereas the truth is the world recovery movement started in the year 1932 and it was well under way when the Labour Party went into office in 1936. The men who comprise the Labour Party had no advice to offer New Zealand, Australia or the United Kingdom during the Great Depression and they have no plan to advocate now to meet a recession in export income. Mr. Nash’s reference to the £40,000,000 in the primary producers’ pool accounts is an attempt to mislead the public because he has spent that money and money cannot be twice spent by the same person. There is therefore, as yet, no visible foundation upon which could rest confidence in a Labour Government in this Dominion.