THE GOVERNMENT SHOULD RESIGN—THEN WHAT?

Wanganui Chronicle, 17 May 1950, Page 4

THE GOVERNMENT SHOULD RESIGN—THEN WHAT?

VARIOUS meetings under the aegis of the Labour Party are passing resolutions that the Government should resign because the cost of living has gone up and not down and taxation has not been reduced as promised at the General Election by the National Party. As the cost of living includes more than the purchase of bread, groceries, footwear and clothing the fact that there have been some increase in prices as a result of the withdrawal of the subsidies it does not follow that, by the time the Government’s operations have been completed the cost-of-living overall will have actually moved upwards. It must be remembered, and it is a simple fact which current propaganda is designed to blanket out of view, that the present rises in prices are the result of a contraction of the Government’s distribution of the taxpayer’s money and that had the Treasury not been hollow to the extent of millions an immediate reduction in taxation would have followed upon the withdrawal of the subsidies. The transference of cash from one pocket to another by this tax-gathering- subsidy-paying operation cost the public the administrative charges involved. But the deficit in the Public Accounts is very large indeed. Nobody has denied that the deficit is there. Mr. Fraser seems to incline to the view that all that is necessary is to print more paper money, but that is no remedy and he knows it. If he did not know it he would not have permitted Mr. Nash to endeavour to embark upon a deflationary policy. For that is the policy which Mr. Nash had embarked upon when he took off some subsidies and left the consumer to carry the increased cost without any increase in wages or salaries being decreed or provided for. Before the Government resigns at the request of those who endorsed not only the deflationary policy which is now being pursued and who at the same time made it impossible for the reduction in taxation to be made immediately the Government, must be satisfied that the party which shall take its place is able and willing to reduce the cost of living and also reduce taxation. The Labour Party witnessed during its regime, and to a considerable extent aggravated, the increase in the cost of living. The additions to the depreciation of the spending- power of the pound which was engaged in to avoid actual taxation were increased. But the final result was the same no matter whether the Government increased taxation or increased the money supply. Indeed, it can be argued that the method employed, that of increasing the money supply was a greater burden to the general public than the increases in taxation would have been. For the Government to resign and to allow the Labour Party to again assume office would mean that a minority vote would determine the Government of the country. That is the first important point. The Labour Party in office again would make certain higher prices either by allowing prices to rise as was the case with boots and shoes or of pushing up costs by increasing the money supply or, if it could become realistic enough, by increasing the burden of taxation. So for the Nationalists to resign and leave the way open to the Labour Party to engage in its previous conduct would be but a betrayal of the people to au unpardonable degree. Those who are calling upon the Government to rcsign—it is a. healthy exercise and does nobody any Harm—might during intervals of their play think what would be the result were their aetivites taken seriously. If the Government should resign for doing what has already been accomplished, without waiting to implement the counter-balancing part of their policy, then the Labour Party should dissolve and go out of existence altogether. All that the National Government has done to date is to present part of the bill of costs of Labour being in office. Had the Labour Party gone out of office at the election previous to its defeat it would have been a much cheaper proposition for the country, but the public did not then quite make up its mind to have New Zealand’s house put in order. Now the financial spring cleaning is on, but it. is going to be more costly than it would had it been underHl eo in 1940.