B—6

Standard of Living Our standard of living depends upon the quantity of goods and services available for consumption. Adequate purchasing power is required to enable the people to obtain goods, but at present it is clear that purchasing power is excessive, relative to the available supply of goods. On this point it is interesting to note that between 1938-39 and 1946-47, total wage and salary payments, when corrected to show " real " earnings after allowing for changes in the cost of living, increased as follows: 37 per cent, in the United Kingdom; 41 per cent, in Australia ; 45 per cent, in New Zealand. In the circumstances, it is the quantity or volume of production that is the vital factor. Statistics show that while there has been a substantial increase in the value of production in recent years there has been a falling-off in volume, as shown by the following statistics:—

It will be observed that while production is now slightly above that for 1938-39, it has fallen over the last few years, and this applies particularly to factory production, the index figures for which were 129 for 1943-44 and only 111 (estimated) for 1946-47. Exports have generally been maintained and imports have increased, but, as everyone is aware, they have been well down throughout the war, and for 1945-46 they were only about three-quarters of the volume of 1938-39. The consequence is that in the aggregate, goods available for consumption in New Zealand during 1945-46 were only 89 per cent, of what was available in 1938-39, and on a per head of population basis the percentage is only 83 per cent. This means that on the average each person could obtain only about four-fifths of the goods available to him or her in 1938-39. Whatever might be done in the way of increasing money incomes cannot alter that fact, which is the real measure of our general standard of living. A considerable factor in our present lower standard lies in our inability to obtain

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Goods available for Consumption Year ended Production. Exports. Imports. in New Zealand. Total. Per Head of Population. 1938-39 100 100 100 100 100 1939-40 105 106 84 96 95 1940-41 112 112 69 95 94 1941-42 110 109 58 88 88 1942-43 109 116 58 85 84 1943-44 107 128 68 83 82 1944-45 110* 146 69* 78* 76* 1945-46 105* 115 78* 89* 83* * Advance Estimates.