MINISTER OF FINANCE.

Sun (Christchurch), Volume I, Issue 242, 16 November 1914, Page 5

MINISTER OF FINANCE.

SPEECH AT MILTON. GOVERNMENT'S PROGRAMME. Press Association. DUNEDIN, November 15. The Hon. James Allen, Minister of Finance, addressed a meeting of electors at Mijton last night. There was 1 a large attendance. i Mr Allen said that the Government that had been in office for three years , had met with unusual difficulties. It I had had a very small majority to carry i on with, but it had carried on without ; losing a division or having one of its | votes or estimates reduced. It had had Ito face other difficulties—difficulties i that came, and difficulties that had I been left to it, It was left two strikes; ; it had had to endure the smallpox troujble, and the cost and responsibility j arising out of the war. With regard to jthe great waterside strike, it had amounted to this: Either the control jof the country was to be left to properly constituted authorities or to the administration of the unorganised mob. The Government faced the difficulty, with the result that the strike leaders of that time were out against the Government now to punish it for what it did, and their method was to join hands with the so-called, Liberal Party, not because they believed in the Leader of that party any more than in Mr Massey, but to put Mr Massey out of office. It was not politics, but punishment. Mr Allen said he had no objection to seeing a proper Labour Party in power, by the vote of the people, but what had been the result of the Labour Government in * Australia? True, it had constituted a fleet, and that was a good thing. Mr Allen pointed out that a combination of Labour and the Liberals in office .would be dangerous, because if the Liberals were placed in power by the aid of ten or a dozen Labour members, and were kept in office by their support, these ten or a dozen men would drive the Liberal Party in power just where they wanted to drive it. But the Liberals' desire for office was so keen that they would commit the country to almost anything to get there.

The Minister went on to deal with the criticism of the present Government. He claimed that the promises made had been kept, and quoted as an instance the option of the freehold to settlers, and the land legislation, and other good works in connection with land settlement. The purchase of land by the Crown had been going on more, actively than in the' previous history of the country. The money derived from the sale of land had been set aside for the purchase of more land. In one year 770 settlers who had bought their land had handed over £IOO,OOO as the result, and that money had gone into the land for settlement account, and was being used to purchase more land. FINANCIAL MATTERS. Mr Allen next touched upon surpluses, and pointed out that had he allowed the £BO,OOO derived from land sales to go into the Consolidated Fund, as his predecessors had done, the Surplus would have been nearly £520,000. That £BO,OOO had, however, been handed over to the Land Purchase Board J for the settlement account, and would |be available for further land purchases. Mr Allen, also referred to the altered practice of setting aside money for the insurance of public buildings, and the 1 erection of buildings destroyed by fire out of that fund, instead of out of borrowed money. The Government had to face an extraordinary expenditure, such as £40,000 for the smallpox outbreak, £90,000 for the cost of the strike, and a shrinkage of £170,000 in railway revenue owing to the strike and smallpox. Notwithstanding, these difficulties they had a surplus of £426,000. When the Government took office in July, 1912, the cash'balance in the Consolidated Fund was £47,000; on September 30 last, the Consolidated Fund had a cash balance of £399,000. He said unhesitatingly that the Advances Departments were used for electioneering purposes in 1911. The board cut down the maximum amount that could be borrowed by local authorities and settlers, and stipulated that no settler eould borrow to redeem a mortgage coming .due, and never announced the fact until the elections were over. The present Government had had to reduce the maximum of advances to settlers and local authorities, but they had not kept that, fact back from the electors. They had cut advances to settlers down to £SOO, and cut local authorities off for a time altogether. A few weeks ago, owing to improvements in the Post Office Sa\angs Bank funds, they had increased the advances to settlers to £750, and he hoped to be able to increase them to £IOOO at the end of next month. Workers' advances were cut down for a time to £350, but increased recently to £4OO, and he hoped to advance them shortly to £450.

In the first month of the war the deposits at the Post Office Savings Bank exceeded the withdrawals by £90,000. Then, owing to panic in September, the withdrawals exceeded deposits by £BO,OOO or £90,000. In October the deposits exceeded the withdrawals by £150,000. This showed the confidence of the people in the Post Office Savings Bank, and in the Government. The slump in the bank began before the ' Government came into office. In the first iweek of July, 1912, the withdrawals exceeded the deposits by £66,000, and that was the beginning of the slump. The Government restored confidence, and now the bank was a perfect institution for the people to put their money in with safety. The Government had fulfilled its pledge to restore the finances, and public works could be carried on till the end of the financial year without going to London for a halfpenny. THE WAR TAX. Sir Joseph Ward did not think the Government should impose a war tax at the present, and neither did he (Mr Allen). The reason was that it was necessary for the industries of the country to go on unhampered, and a war tax on land or anything else might be used as a reason for dispensing with labour, and might lessen production, but the Government had made provision for the war. It had been estimated that if the war lasted 12 months, they would want two millions. When that estimate was made the Government was not providing so much help for the Mother Country, and the estimate might not be large enough. Mr Allen went on to say that he had communicated with the High Commissioner, who, as a result, had approached the Imperial authorities, with the result that New Zealand could raise her two millions month by month from the Bank of England at a rate of interest which had been publicly stated by the Leader of the Opposition to be an excellent bargain. The Dominion's money would cost the same as the Imperial authorities would pay for their big loan. It was

disastrous finance to borrow in London on short-dated debentures for two or four years, and allow the money to get into the hands of large financial institutions, which lent the money in order . to make the Dominion borrow in London to pay them off. In July last, Mr Allen said, he-had had to face Mr , Myers's loan of four and a-half mil : lions and pay it off. Next month he had to pay off part of Sir Joseph Ward's loan of four years ago, a portion of which, over three millions, remained unconverted, and could only be met in one way, because the holders would not convert, renew, or sell the debentures. He (Mr Allen) had tried to buy them, and had bought a quarter of a million, but could buy no more. But a few weeks ago the Government's advances to the Imperial Government regarding a loan had met with a favourable reception, and the Imperial authorities had guaranteed to assist, in December next, to raise sufficient money to pay off Sir Joseph Ward's loan. Therefore the Government had re-established the State Advances Department, The Government had provided for the war loan on most favourable terms, and had so fulfilled its promise to re-establish the finances. BORROWING. It had been said that Mr Massey had pledged himself to reduce borrowing. He (Mr Allen) had no recollection of such a promise. What Mr Massey had promised was careful expenditure of borrowed money. / The Minister proceeded to point out that, comparing the last 27 months during the regime of the; Massey Government with the 27 months \ when their predecessors were in office, • while the Massey Government had borrowed £14,636,680, the Ward Govern-! ment had borrowed £16,496,000. Of these j amounts there had been borrowed money for current needs £9,078,000, and by the Ward Government £10,031,000. Coming to the question of taxation, Mr Allen said there had been an increase in the graduated land tax, but none in the Customs duties. On the contrary, there had been a small decrease last year. He proceeded to quote figures as to Customs duties, 'land and income tax, and death duties, to show that the increases under the Ward Administration had been much greater in certain Departments than during Mr Massey's time. Eeference was made to the reform of the Legislative Council. To deal with legislation, it had become necessary to increase the number of councillors, but before the Government made that increase they had done their best to diminish the term of office of members of the Council. The Public Service had been reformed, and at present it was open to any boy or girl to enter it without the parents going down on their knees to get their child there. DEFENCE. In introducing the, subject of military and naval defence, Mr Allen said he could claim to be a true Liberal. He ventured to say that he had done more for national training than any other man in the community, and he had advocated it from the public platform. Sir Joseph Ward had got his (Mr Allen's) support in putting it on the Statute Book, and he did not believe Sir Joseph Ward could have put it there without his support. Sir Joseph Ward was absolutely opposed to national training five or six years ago. He (Mr Allen) would some day quote that gentleman >s speeches in " Hansard'' to show that he was opposed to a system of national training only a few years he was forced to adopt it because he saw how the public mind was veering after Lord Kitchener had been here, and the Defence Bill was under consideration with its proposal to increase the age from twenty-one years to twenty:five years. He (Mr Allen) knew what happened, and what would have I happened if it had not been for the influence brought to bear which kept the then Prime Minister's back stiff, when his back was inclined to be weak over the question. He had also reason to believe that if it had not been for the outbreak of this war there would have been included in the programme of the so-called Liberals a reduction in the training age from twenty-five years to twenty-one years. He was sorry the national system of training was not in-existence for years before it was. They would then have had men of more mature years to send away to do the Empire's work. The circumstances of to-day justified the national training scheme, and the offer of an Expeditionary Force to the Old Country, and he appeared before the people in full confidence to ask them to answer at the polls those detractors of the Government who spoke as they did about the military organisation, that was proposed two years ago. "Because of the organisation of her military systhem, New Zealand had been able to do better than she had promised. He had realised the necessity for an increased amount of artillery, and had asked his colleagues to send more artillery than we had promised. We had promised two four-gun batteries, . and we were sending two six-gun batteries, , or a complete brigade of artillery. The officer commanding it was an Imperial officer who had been in New Zealand for a number of years. He had trained Imperial troops, and he knew their personnel, and he had assured him that this brigade of artillery was thoroughly well equipped, and that the personnel of it compared more than favourably with the personnel of any brigade of artillery he had ever seen. That brigade was going from New Zealand to do the Empire's work. NEW ZEALAND'S PART.

I Early in the war the Imperial authorities communicated with New Zealand ! and asked her to cany out an Imperial | mission in the Pacific. That mission was the occupation and holding of Samoa for the Mother Country. If our military organisation had not been completed we could not have equipped and sent away 1500 men in less than one week, and without that organisation and without the care and thought put into the national training system could we have an additional force of 2000 men in camp to-day—an even better class of men than the men who had gone away, men of more mature age, and keen as men could be? The Defence Department, he contended, had justified its existence, and he, as Minister of Defence, had a right to say to the people that the work done had been well done, and that New Zealand might well be proud of the men who had gone away or who were going away. What he particularly wanted to say to the public was how grateful he felt uot only to the men who had volunteered *to go, but to those who had remained to carry on necessary work here, so that when the men came back they would find that the products of the country had been kept up, and its industries maintained. He also wanted to thank those parents who had spared their sons to go. NAVAL DEFENCE. He also wanted to refer to the question of naval defence. He regarded an Imperial Navy as an absolute necessity,

and one control as an absolute necessity. For the time being that control centred in the Admiralty, but as years went by it might be that the control would be altered, and that representatives from the various Dominions would have a seat on the controlling authority, and would there consider questions of peace and war, and the naval defence of the Empire. But that day had not come yet, and he would not go into that aspect of the question. The position in regard to naval defence at present was this: They were all agreed about an Imperial Navy, and one control, but they were not agreed as to how to constitute this great Imperial Navy. Those who were opposed to him believed that New Zealand ought to pay a subsidy to the Mother Country, and allow her to do what she pleased with the money, build up her Navy with it, and save th'e British taxpayer what he would have given but for the provision made by the various Dominions. It was said against him (Mr Allen) that he was seeking to lead the j country into wild and reckless expenI diture. He . denied it, and said 'that those who made that statement were themselves prepared to tax every person in the Dominion up to 10/-, as a ' subsidy for naval defence. That money would be handed oVet to the Imperial authorities to do what they liked with, and New Zealand would have no say in the expenditure of it. His (Mr Allen's) | proposal to build up an Imperial Navy was to make, an appeal to the patriotism of our people, and allow, pur, own statesmen to. take' an interest, in Imperial concerns. We might in the course of years adopt the policy the Commons wealth Government had adopted-—-not only train our Own personnel, but provide ships as we were able to do it. Then, if the occasion arose, everything, would go over automatically to the Imperial authorities. The facts of to-day justified the Commonwealth Squadroni The Government's naval poliey Was a sound one.

Asked whether he would support the bare majority on the licensing issue, Mr Allen said he had some time ago pledged himself to stand by the existing law. on the licensing question, and he stood by the existing law. • He now asked to be relieved from that and to have the right to use his judgment without any pledge. A hearty vote of thanks was accorded Mr Allen for his able address, and the meeting expressed "its confidence in him as the representative of the electorate, and also its confidence in the present Government, of which Mr Allen is <a distinguished and honoured member."