That Deficit

Daily Telegraph (Napier), Volume 59, Issue 101, 31 May 1930, Page 6

That Deficit

Per Press Association.

iTHE PREMIER'S STATEMENT Mr H, E, Holland Says It Is Astouuding LABOUR LEADER'S VIEWS

W AIMATE, Last niglit. Mr H. E. Holland, Leader of the Labour Party, addressed a Jargely atfanded meeting liere to-night aiid in tbe course of Tiis address made reference to the Hon. G. WT. Forbes' statement regarding the finaneial position. Mr Holland said he had not had timo to go fully into the ■. details. but in view of the extremely gloomy nature of that pronouuc-ement, which was so markedly in contrast with the gl owing promises of little more than a year ago, be was not sure the Prime Minister had not done the Dominion the greatest disservice imaginable. Some time back the Hon. W. A. Veitch was found declaring that confidence in the eoonomic stability of the Dominion might be shaken'if the figures relating tp unemployment were permitted to 'oe published, "but if anything were wanted to weaken the coiifidence of creditors it had certainly been supplied by the leader of tlie Government. However, he was not prepared for a xnoment to agree that the position was as dark and dismal as Mr Forbes had painted it. It seemed almost astounding that witliin two months of having proclaimed a surplus of £150,000 and with onl.v one coniplete month's figures on which to base his ealculations, the Prime Minister should precipitately announce a deficit of £3,000,000 to be achieved during the present finaneial year. To &ay the least, it would get inquiries going as to liow the surplus of Mareh 31 was Huilt up. not what they seem. Mr Forbes had pvefaced his statetnent with reference to a drop of £S,1 00,000 in the value of New Zealand exports for 1929-30 as eompared with the previous year, hut he did not mention that both 1927-28 and 1928-29 were abnormal years, in eaeh of which the value of our exports exceeded the average by between £7.000,000 and £8,000,000. Tn 1929-30 the value of New Zealand exports was slightly over £49,000.000, and tbat value had been exceeded in only four of the ten preceding years. In each of the otlier six years the total was well below that figure. The average yearly value of exports for the ten years from 1920 to 1929 was iust nnder £49,500,000, a differenc-e of £448,000 in comparison with last year. Bearing in mind fiuetuations in the nature of export value, there was nothing t-o he alarmed about wlien a fall of less than £500.000 in the yearly average occurred, and more especially when tlie capaeitv of the Dominion to rise ahove really adverse situations was taken into account. It had to he remembered that at least 115,000 bales of wool had been lield back from sale owing to unsatisfactory prices ruling. Ad a moderate estimate of £11 10s per bale, this meant a value of £1,322,000 added to the _ exports. This would leave the position last year nearly £1,000,000 better than the average. increase in interest. Tt was not true that there was now a shortage of money 111 New Zealand, 7101 had tbere been a shortage in 1929, for in that year New Zealand surplus funds were seeking investment in Australia. The Christchurch City Council, in response to its advertisements, received offers from all over the Dominion to take up its debentures at 5\ per 'cent., and easily got all the money it wanted. ruuning into several thousand pounds. This position continued until the Government placed its loan on the market offering 51 per cent. The immediate effeet of the Government' s action was to send up the rate of interest, and cities had to pay 61, while 'smaller local bodies had to pay higher rates. The hanks followed the Government's example and increased overdraft rates. Referring to the loss 011 the railways. Mr Holland said the ohjective of the railway svstem was wholly similar to that of the roading system — the getting of the products to an effective market — and while it was a good thing it this could be done and a balanee slieet profit disclosed in doing it, or that any loss should be minimised, still there was 110 more reason to feel dismayed over the loss 011 railway s than on main highways, If the goods were conveyed to economic markets the country reaped the benefit to that extent. economic waste. However, if it should l>e laid down that the railway system must be tieated wholly as a eominereial venture. then the railways should be credited with values created by their construction and operation, in which case the balanee sheet would show a greatly altered result. Everyone would agree that there was need foi co-ordination of motor and raiJway services, but this could only be done by drastic cba.^rs that would make motor yehicles act as feeders to, instead of competitors with the railways. The present coinpetitive system represented aj enorlious economic wastage. Mr Holland proceeded to say that the references to education expendi.ture were extremely disquieting, and "Hands off the education vote" would express puhlic sentiment in this connection. The Government's attitude in regard to hospital subsidies would call forth the closest watchfulness 011 the part of the Labour Party. There was ^dauger of the responsibilitv that belouged of riglit to the whole Dominio • being thrown on local ratepayers. From the viewpoint of the publm servants, the Government's new policy was not encouraging. There was nc. indication that the promises made would he lived up to. On the other hand, there was a fairly strong hint that both the pruning knife and the guillotine would function in place ot tlm salary improvements promised last year. If retrenehment- were really necess .ry one legitimate source of saving wculd be found in the eutting down of the naval and military estimates. Generally speaking, both Reformers and Liberals had opposed every effort in this direction in the past. The Singapore base represented another waste of £125,000 a year, and this could be saved to New Zealand bv a Government intimation to the Britisu Government that it is willing that the construction of the base should he discontinned. Concluding, Mr Holland said Mr Forbes need not be surprised if his Government's attitude was taken for a renunciation of Sir Joseph Ward'" pclicv and his statement rcgarded as a sinoke sereen to cover a carefully blanned evacuation of the position laken up by the United Party in 1928.