Protection and Labour.

The Labour party is withal strongly imbued with the spirit of protection. Not only does the workman consent that taxation shall be raised through every article which he buys from abroad, in order to exclude competition by less highly paid labour elsewhere, but he checks at every point the introduction of workmen from home or foreign lands, and seeks to give further protection to his labour within the Colony itself by excluding from employment all who are not members of his trade union.

It has been said that the policy of protection has brought down the fabric of Australian finance. But if that be so, how can we account for the fact that New Zealand, which is as firm a supporter of protection as any Australian Colony, has ceased from borrowing and shows each year increasing Budget surpluses?

That New Zealand should be not only the pioneer Colony in these experiments in State Socialism, but that her financial position should at the same time be in a sound condition, is the most interesting feature in the whole question. Were her condition that of the Colonies on the continent of Australia it would be easy to attribute it to unsound political economy; but New Zealand has passed through a financial crisis not less acute than that which brought ruin and dismay to depositors and shareholders in Australian commercial institutions.

What is known as the Public Works policy inaugurated by Sir Julius Vogel involved the borrowing of huge sums of money to be expended on works of public utility, which it was believed would page 29 attract a large influx of immigration and considerable sums of capital for the settlement and development of the country. Had Sir Julius been a dictator or able to expend that money with a single eye to remunerative investment, whether in the shape of traffic returns or in revenue from an increasing number of taxpayers, all would have been well; but he had to consult the wishes of every locality whether the work desired there was likely to be remunerative or not, lest he should lose the support of its representative and his majority in Parliament.

The consequence was that not only did the "New Bridge-over-Gum-Tree-Creek" policy become the leading plank of a candidate's platform, but coalitions were entered into by members to vote for works in one locality on condition that the representatives of that locality supported expenditure in the constituencies of their allies.

The expenditure from the borrowed money produced an inflation of values. Banks made advances on absurdly high valuations; workmen flocked into New Zealand to share the employment; but as soon as that employment ceased they left the Colony to seek work elsewhere, giving rise to an alarm that New Zealand was witnessing a general exodus of her population. Some financial institutions gave way under the strain, others by reorganisation placed their affairs on a sounder basis, and the Colony settled down to a steady development of its agricultural and pastoral resources.