8.—6.

During recent years tobacco-growing has become an important industry, and in conformity with the Government's policy of eventually making New Zealand self-supporting in the matter of tobacco-leaf much has been done to encourage the growers concerned. Not only does the quality of the product continue to improve, but the guaranteed basic prices determined by the Government assure the grower a reasonable return for his activities. As regards wheat too, the Government's policy of growing our requirements within the Dominion is producing satisfactory results, and during recent years both the quality and quantity of the product has shown a marked improvement. Growers are guaranteed a minimum price, and the Wheat Research Institute set up by the Government, in co-operation with the industry, has been most successful in the development of better-quality wheats which do not require blending with imported wheats. As a war measure the Wheat Committee, representing the Government, the growers, and the bakers, has arranged for the holding of substantial stocks of wheat in the Dominion. In regard to our secondary industries, the war has brought additional business to many of our factories, and their chief trouble lies in getting essential supplies of materials and plant from abroad and uncertainty as to when goods will come to hand. The Government, and particularly my colleague the Honourable Minister of Supply, are doing everything possible to minimize these difficulties. Arrangements have been made for the accumulation by manufacturers of reasonable stocks of certain basic materials to ensure continuity of operations, and in other cases the State has made bulk purchases for distribution as and when required. The supply organizations in London, America, and Australia are being strengthened, and the volume of representations to assist manufacturers to obtain their requirements is considerable. For the same purpose certificates of essentiality are issued in the case of a few commodities, and this procedure will have to be extended considerably.. The issue of import licenses covering a year and the intention to issue certain licenses for 1942 now should also aSsist manufacturers in overcoming their difficulties. The setting-up of a Supply Council should also indirectly be of much assistance to manufacturers. This body has been established and will be given powers to operate under the general control of the War Cabinet and the Minister of Supply, primarily to overcome difficulties in obtaining supplies for the armed forces. By planning supplies for the forces well ahead of required delivery it is anticipated that the Council will be able to give manufacturers longer-term contracts and continuity of business that should be of considerable value to them in drawing up their production schedules. The Council will also take s£eps to ensure that the necessary materials for defence contracts are available when required, and action along these lines should avoid trouble arising from local stocks of materials being used up on account of rush orders. Another matter which will be of considerable benefit to all producers and, in fact, to all sections of the community, is an arrangement made with the trading banks, for a reduction in overdraft rates from the present minimum of 4.1 per cent, with a maximum of per cent., to a minimum of 4 per cent, and a maximum of 5 per cent. A similar reduction in the rates charged by stock and station agents is at present under consideration by the companies concerned. These reductions will operate as from Ist August. This change will necessitate some reduction in bank-deposit rates, and, concurrently, it has been arranged that the maximum deposit rates that may be paid by building and investment societies, local authorities, and trading companies will also be reduced. These adjustments in deposit rates will be effective to-morrow. In keeping with these reductions the interest rate for deposits in excess of £500 in the Post Office Savings-bank will be reduced to 2 per cent.,, a reduction of i per cent. The present rate of 3 per cent, on deposits up to £500 will remain unchanged. In dealing with reactions from the war, the Government have not overlooked the consumer. With many classes of goods for consumption in short supply owing to difficulties in obtaining imports from abroad, combined with the diversion of a considerable part of our manufacturing capacity to war work, the retail prices of goods are likely to rise unless adequate measures are taken to deal with the situation. Realizing this, the Government took early action in setting up a Price Tribunal,

Tobacco.

Wheat.

Secondary Industries.

Stocks of materials.

Supply Council.

Reduction in bank overdraft and deposit rates.

Price Stabilization.

4