LABOUR’S PLATFORM

Waikato Times, Volume 118, Issue 19662, 23 August 1935, Page 10

LABOUR’S PLATFORM

| OUTLINE BY LEADER. / I j i | MR M. J. SAVAGE AT CAMBRIDGE. j [ REPLY TO SIR A. RANSOM. The main planks in Labour's platform of monetary and social rehabilitation were outlined by the Leader of the Opposition, Mr M. J. Savage, M.P., ■speaking to -a gathering of more than •400 in the Peace Memorial Hall at Cambridge last evening. Mr Savage, who was accorded a sympathetic bearing, was accompanied on the platform by Mr R. Coulter and Mr W. Lee Martin, Labour candidates for the Waikato and Raglan seats. The Mayor of Cambridge, Mr C. 11. Priestley, presided. “The case for Labour is based upon the,-fact (hat the trade of tiie Dominion, internal and external, cannot exceed the purchasing power of Hie people of this country,” staled Mr Savage. “Whether we trade with Britain or Japan we cannot, have oneway trade, and we must, therefore, be in a -position to buy what is produced in New Zealand for use in New Zealand ns well as be able to buy and use all imports’ Unit come from abroad in ex-change for our exports. “Sir Alfred Ransom slated at Dannevirke that T had overlooked the fact that the ‘masses -consuming our surplus production were not in New Zealand but in the 'United Kingdom.’ Sir Alfred seems to have conveniently forgotten that our surplus production •goes to the United Kingdom in payment for -others goods and -services that come to New Zealand, and we should be in a -position to buy and use these things in addition to other goods and services produced here and kept for use in New Zealand,” said Mr Savage.

If it were admitted that exports provided the medium through which the Dominion purchased imports of equal value, it must also be admitted that unless' New Zealand increased the purchasing power of the .people trade could not be expanded. Instead of -moving in that direction the Government had since January t, 1030, been directly and indirectly responsible, through wage reductions, for the destruction of purchasing power aggregating £100.000,000.

Similar reductions were made in 1922 and taken together-these figures would far exceed even the exaggerated estimate of the cost of -putting Labour’s policy into operation, recently made at Dunedin by 'Sir Alfred Ransom. While that was happening production was increasing. In ten years ending in 1933, llic dairy farmers moro than doubled their production with only a fractional increase in the money value of their production.

Unless purchasing power was increased in sympathy with increasing production, prices must fall.

Dairy Commission’s Report,

“The Dairy Commission is entitled to praise for its extensive survey of the dairy industry, and for the amount of information that it lias collected and made available lo those interested; but when it fails lo make any suggestion as lo -methods for rendering immediate financial assistance to dairy farmers who are in difficulties it seems io have, missed Hie main object for which it was appointed,” contended the leader.

In regard to -guaranteed prices the Commission seemed to have overlooked llte fact Unit, under tho competitive system they were expected io provide for the -average farmer. It seemed strange that in a-country which guaranteed Ihe salaries and wages of a large section of the community—up io as high as £SOOO a year—it should be found impossible to guarantee an income in equitable relationship to the services rendered by primary producers. it was quite clear (hat unless farmers received some guarantee on that 'basis, they, and all others, would soon lie reduced to the living standards of their overseas competitors.

Any .piecemeal policy which icf’l out of aeenunl llte raising of salaries and wages in keeping wilh increasing production could not provide any subslanlial guarantee lo farmers, while il was equally ini port ail I- lo remember that unless farmers bad some guarantee. 110- standards of oilier scclions must fall. Guaranteed prices should commence al an average of, say, llm last eight or leu years prices, and mortgage liabilities should bo adjusted accordingly. Allocations of Ovorscas Credits. “Tim allernalive lo raising the ride of exchange is guaranleed prices, delinile Irade agreemenls, and Ihe ti 1 local i n n of overseas eredils for Iho purposes of those agreemeuls,'’ said Arc Savage. "The control of exchange by a nalinnai banking system would enable llm (loverimient of New Zealand lo make available lo leaders, al par, all overseas eredils required lo give effect lo Hie Dominion's part in any Irade agreement wilh Britain or any oilier eounlry. "The t-onlrol of Irade, by means of agreemeuls, plus allocation of overseas eredils would do away wilh llm necessity of raising Ihe rale of exchange, and remove llm necessity for protective lariffs, wilhout leaving Dominion manul'acluring imluslries open to eompeliliou wilh Ihe products of overseas cheap labour. The rale of exchange eannol he reduced until an allernalive method of assisting farmers by guaranteed prices lias been eslnblislmd. "in a reeeni oflleial stalemonl issued by |lie Associated Ranks il is shown llial llm London assels of lll'* six leading banks have grown from £8.82 1.5,'!S on July TI, IP.'ii, lo £lB,‘Jfb'i.lT'i on April 2'J, I'J.To. In Hie same slalement il is shown llial llm iola! overseas assels of these banks bad grown during llial period from £17,181.51 5 lo £•»:>.:: 18.01 7. II is quile eb-ar from llteso figures dial die high ralo of exchange is having a

detrimental effect on our trade with [ Britain in particular, and on our cx- | ternal trade in general. Our credits j are accumulating in London and elsei where. We need them in New Zeaj land. Wc cannot have one-way l trade. ! Use of the Public Credit. j “Frequent references have been I made to the German experience of in- ■ fialion, and usually only half the story jis told. Germany inflated her ourj reney and destroyed tier internal | debt,” declared Air Savage. “New | Zealand debated her -currency and | destroyed millions of pounds worth jof equities in homes, farms, and all forms of wealth, as well as considerably increasing the weight of her internal debt. Both these policies were wrong. Goods and services -should be tiie basis of the money system, and stabilisation with control by a national credit authority should be the policy to be administered. “ Goods- and services should be the basis of our money system. Without goods and services (production) our system could not exist. Why, then, harness it to anything else —internal' or external?” -asked Air Savage. “Sir Alfred Ransom says that the amount realised from the present rate of exchange above par, and paid by the people of New Zealand, is £9,000,000 a year. If that amount had been advanced by the Reserve Bank, from the public' credit, direct lo exporters, instead of raising the rate of exchange, the depreciation of New .Zealand currency would have been less, if it existed at all, while the present barrier against Britain's trade would 'certainly not have existed. “ The use of tiie public credit should be controlled by a national credit authority whose duty it would lie to provide the credits authorised by Parliament, and lo administer the money system on a properly stabilised basis. The raising of the rate of exchange lo £125 depreciated New Zealand currency by not less than 25 per cent, without increasing the amount of money in circulation, while' a 'direct payment from tiie public credit to farmers would increase tiie amount of money in circulation without depreciating New Zealand currency to the same extent, if at all. “ Sir Alfred Rarisom stated at Dannevirlce recently that the raising of the rate of exchange bad ‘increased the national spending power by nearly £10,000,000 annually.’ The raising of exchange did not increase the national spending power by one penny-piece. It merely transferred spending power from some pocket-s into others- The transfer very often being in favour of those.who needed it least. Land Settlement Policy. Referring to taxation Mr Savage -said that increased and inequitable forms of taxation had reached breaking point. The Unemployment Act, with its inequitable taxes upon the poor, in particular, was ail outstanding example. Heavy taxes have been levied for the purpose of providing a large number of men with employment, at relief' rales of pay, on work of very ques- j tionable value, instead of using Iho public credit for the purpose of employ- I inging men at standard rates of work of public importance. The sales tax, - which was also a levy upon the poor, without any -consideration for income received, could not be defended on any grounds. During 1933 and 1934 over £50,000,000 had been collected from the people by means of sales, customs, and unemployment taxes, and the high rale of exchange.

Land 'settlement must be an integral part ol' the Dominion’s national policy, but it wa-s useless to talk of such a policy without first laying a financial foundation which would allow tiie farmer lo make a living. “ Labour is more than a party business- It is a cause and lo help to right some of the great wrongs existing in New Zealand is my reason for coming forward as a candidate," commented Air Coulter on being introduced to the gathering. “No party other than Labour can possibly oust the existing Government.” Air Lee 'Alartin also referred lo the evolution of Labour in the Dominion and to the campaign that was being conducted in the Raglan electorate. On the motion of Air H. Scliwicters

a vole of thanks, 'by -acclamation, was accorded -Mr Savage.