The New Zealand Government in War and Peace
ECONOMIC AND SOCIAL REFORMS
By THE HONOURABLE WALTER NASH, Minister of New Zealand
Radio address delivered May 9, 1942
Vital Speeches of the Day, Vol. VIII, pp. 574-576.
I HAVE been invited to talk to you about the New Zealand Government—to tell you something about its policy and achievements in time of peace—about its record in the war.
I am sure all who are interested in economics and social problems would find it a fascinating story if it could be told in full. Though this isn't possible, I shall try to give you a brief account of some of the more significant things which the Government has done and its reasons for doing them. And, although my partiality as a member of that Government may be open to question, I shall endeavour to make my remarks as objective as possible.
The story falls into two parts. The first part commences on December 6th, 1935, when the present Government of New Zealand took office and immediately initiated an energetic programme involving far-reaching changes and reforms in the economic and social structure of the Dominion. This was a period of legislative activity and social progress probably without parallel in its history.
The second part of the story commences on September 3rd, 1939, when a state of war was declared with Nazi Germany and the New Zealand Government, with the unanimous approval of Parliament, pledged the Dominion's united and unreserved support in the fateful decision which Britain and the British people had taken. This ushered in a period during which political considerations and party programmes have been largely thrust aside in order that the nation might concentrate its undivided energies and attention on the all-important task of mobilising its entire resources for a long and desperate struggle.
Perhaps I should explain the origin of the present Government of New Zealand. It is a political movement—it has no narrow class basis but is composed of men and women drawn from all walks of life—from all occupations and social strata—trade unionists—farmers—teachers and civil ser-
vants—lawyers and doctors—shopkeepers and manufacturers. But they share a common social philosophy—a philosophy which is derived from certain basic political principles to which all subscribe who belong to the Movement.
This philosophy—these principles—can be very simply stated.
That the first charge on a nation's wealth should be for the care of the old, because they have worked in their earlier and fruitful years to make it possible for us to enjoy the standards we enjoy today,—of the young because unless we care for them, the future will not be provided for;—of the ailing because they cannot care for themselves.
That after making this provision, those who render useful service are entitled to the full fruits of their labour.
That the community through its organized government must accept responsibility directly for the economic welfare of its members.
That our resources must be so organized as to ensure the maximum production of useful goods and services and their availability to everybody so that all may enjoy the highest possible standards of life—the greatest possible measure of security and leisure.
That it will take collective planning both to make the best of our resources and to ensure that human needs are satisfied to the utmost.
These are the simple objectives of the New Zealand Government. It is towards the realisation of these objectives that its efforts have been directed during its six years of office.
It is as well to recall the conditions with which the Government was faced when it was called to power in December, 1935. New Zealand was just emerging from the throes of a terrible depression. The number of unemployed had reached unprecedented levels. Fifty per cent of the dairy farmers in New Zealand were unable to meet their commitments.
Mortgages had been foreclosed. Thousands of farmers had Jost their farms—thousands of workers their homes. Malnutrition among the school children of the Dominion was causing serious concern. Industry was at a low ebb—building had virtually ceased. Clothes drives, charity appeals, soup kitchens, labour camps—these were the order of the day. But I need hardly dwell on this unhappy picture. No doubt it is a familiar and still a painfully vivid one in the memory of most of my listeners. The Government's first job was to start the wheels of industry revolving once again, to see that work was available for all who needed it, at adequate rates of pay—to see that the living standards of those unable to work were lifted quickly to an adequate level. To this end relief work as such was abolished. The unemployed were given work—useful work—at standard rates of pay. All cuts that had been made during the depression in wages and in pensions were restored. The Arbitration Court was re-established and given still wider authority to control and regulate working conditions. A forty hour week was instituted and the principle of the closed shop given legal recognition. A basic wage was declared for all men and women over 21. The Central Reserve Bank was reconstituted as a completely State owned and controlled authority responsible for giving effect to the monetary policy of the Government. The members of the present Government in New Zealand have never believed that Utopia can be ushered in merely by monetary magic but it does believe that when there are idle men on the one hand and unused resources on the other, it is both safe and sensible to use the peoples' credit for bringing these men and these resources together in useful employment. Dairy farmers, fruit growers and certain other producers were paid a guaranteed price for their produce irrespective of market fluctuations. This means that all the butter, cheese and fruit that is produced in New Zealand is bought and paid for by the Government operating through a newly created Marketing Department which is responsible for disposing of this produce both overseas and in New Zealand. Under this arrangement very substantial savings have been effected to the benefit of the producer and consumer alike and an element of stability has been afforded to the dairying industry, the largest and most important of all New Zealand's industries.
Existing industries were rationalized, new industries were commenced, the volume of factory employment and factory output quickly reached record levels. A vigorous Public Works programme was early instituted as a result of which there has been brought into being during the past five years valuable national assets, including numerous modern airdromes, irrigation and hydro-electric schemes, improved highways, forest and land development.
A State Housing Construction programme initiated in 1937 has been remarkably successful. As a result of these activities thousands of modern individual homes have been made available to those who need them at rentals of $15.00 to $25.00 per month.
Financial crises have been met and overcome. The National accounts have closed each year with a healthy surplus.
Taxation has increased but wages, salaries, profits and savings have increased far more—private incomes by more than 70 per cent since 1936.
The Social Security Scheme which came into being in 1938 is, perhaps, the greatest single achievement of the New Zealand Government. Today in New Zealand no individual need ever lack an income sufficient to provide him or her with all the reasonable necessities of life. The aged, the widows, the deserted wives, the orphans, invalids, sick, war veterans and unemployed—men and women alike—each in their own right are all generously provided for—not as amatter of individual charity, but because such a provision is regarded as a major collective responsibility.
Free maternity services, including the services of any doctor of the patient's own choosing, free care and attention in public hospitals, free pharmaceutical requirements, free medical attention—these are other features of New Zealand's Social Security arrangements.
With the outbreak of war in September, 1939, the tempo of legislative activity was necessarily slowed down though by no means halted. Many peace-time rights and privileges secured by workers have been freely given up for the duration. Farmers, importers, manufacturers have cheerfully accepted the most drastic restrictions and interference with their activities.
But the majority of New Zealanders feel strongly that those very principles and achievements that have made New Zealand a country so worth fighting for, should not be needlessly sacrificed in the struggle.
In the field of social reform, therefore, there has been no general retreat. In fact, there have been some notable advances in certain directions.
In a budget just presented, for example, provision is made for the payment of a 5 per cent cost of living bonus on all old age, widow, invalid, minor and orphans' benefits; on war veterans' allowances and other classes of war pensions.
Provision has been made also—with a view to assisting the family man—for an increase in the present rate of family benefit from 4/— to 6/— a week in respect of every child after the first. Allowable income which may be received to qualify for the full rate of benefit is also increased to £5/5/— a week.
Increases have been granted, too, in the domestic allowances payable in respect to the wives and children of service men. This added provision will, I believe, fully justifyNew Zealand's claim that in no country are the righting men and their dependents better paid and better provided for.
Subject to these equitable adjustments the policy of stabilising wages and prices is being vigorously pursued.
It has been estimated that whilst production has increased imports have been so restricted that the supply of goods for civilian consumption in New Zealand has been reduced by over 30 per cent during the war, and that in the same period, the spending power of the community has increased by over 10 per cent.
To meet this situation, taxation has been heavily increased. "Pay as you go" is the policy that is being followed so far as possible. With recent increases direct taxation of private income now reaches a maximum rate of 90 cents in the dollar on incomes equivalent to $12,000.00 per annum. More than one-half of the war cost has been met from revenue— a flat tax of cents in the dollar on all incomes from whatever source constituting one of the main sources of war revenue.
Expenditure on war this year will reach $665,000,000—three times the expenditure in 1941.
Interest free loans from citizens total almost $15,000,000.
Accommodations received from Britain to meet war costs incurred overseas has been repaid in full.
The manpower and the woman power of New Zealand has been mobilised for war-service and for home defence. A part for everyone and everyone trained for his part.
All men from 16 to 66 must lend a hand.
Half the men of military age are serving in the fighting forces.
Casualties exceed 13,000.
In essential industries no employee can terminate his engagement, nor can he be discharged without the Government's consent.
The flow of workers into non-essential industries, including all retail shops except those engaged in the distribution of food, drugs, and fuel has been stopped.
A civilian controller of Defence Construction has been appointed as part of a wide-reaching plan for the complete organization of labour power so as to get the last ounce of man-strength at the points where it is most needed. The Commissioner of Defence Construction operates as Commander in Chief of the Building Trade. He may transfer workers to jobs from any part of the country; take over materials and equipment for urgent work as well as the management side of concerns in the industry. He sets the price at which contract work is to be done.
To facilitate the working of this plan, awards have been set aside. A flat weekly wage has been guaranteed with allowance for travel and board, while the week's work is to cover 54 hours (instead of 40).
During the war New Zealand has doubled its production of cheese. This has been done in response to the request of the United Kingdom. Today New Zealand is turning out more than the total cheese imports of the Mother Country in the peace years. Nine thousand dairy farmers work through the Dominion's nation-wide cooperation system to meet this special requirement, and in the factories a double-shift system is necessary to produce the 153,000 tons required-cheese factories are working the round of the clock.
New Zealand industry was not prepared for munition production on the outbreak of war but in two years a remarkable development has taken place. Based on the railway workshops, the light engineering industry of New Zealand, has turned over in a short period to munition production, including the manufacture of Bren gun carriers, mortars, bombs, grenades, small arms ammunition and innumerable other items.
I believe it is correct to say that never in New Zealand's short, but eventful history, have her people been more united in purpose and in practice—more single minded to see this struggle through and see it through successfully—come what may. And if the worst should come—if the enemy should approach New Zealand's shores—I don't just believe—I know that those people "down under"—those Anzac men and women—will give a splendid account of themselves.
And when we return once more to the ways of peace, I believe that the progressive—the pioneering spirit of New Zealand men and women—the determination to go on—not back—the idealism which has inspired their efforts over the years—which has built a real democracy in those lovely islands—I believe that instinctive urge will carry them forward to still better things—to a still fuller and more abundant life for one and all—though the road may be long and difficult before it turns.
There is one more point that should be made. The one method of achieving economic and social reform, of establishing a just and enduring peace between the nations, of doing away with those national frictions and hatreds, fears and suspicions from which armed conflict inevitably springs—the one method of ensuring the maximum amount of human freedom and enlightenment, of placing the greatest emphasis on the value of the individual human spirit, is the method of democracy. We must be careful to ensure that democratic forms of government—democratic institutions—that democratic methods in industrial organization—in short, that the democratic way of life is maintained.
New Zealand has, I believe, given worthwhile proof of the fact that the method of democracy can bring great and fruitful results—that the method of democracy is the best method—the only method—by which we can build for the future.