PARLIAMENT

Ashburton Guardian, Volume 51, Issue 134, 19 March 1931, Page 3

PARLIAMENT

THE FINANCIAL PROPOSALS.

KEEN DEBATE IN HOUSE.

WAGE AND SALAR Y REDUCTIONS

(Abridged from Press Association.) WELLINGTON, March 18. The debate on the second- reading of the Finance Bill was resumed by the lit. Hon. J. G. Coates, leader of the Opposition, who said the real question to be faced at the moment was how the country was to pay its way. Should the position be met entirely by increased taxation, or were the Government’s proposals the wisest? He thought the Prime Minister’s statement last night had brought the country face to face with a real problem; Could the taxpayers continue to bear the heavily \ increasing burden? Any method of increasing taxation did not tend to decrease the cost of living; it merely ( passed, the burden on. The main trouble appeared to be the failure'in so many cases to balance private budgets. In the Dominion there were many people to-day who would be prepared to jnitiate enterprises of various lands if it were not for the question of costs. Private budgets and the Government ‘ budget were closely related, and it was -essential for both that some course should be followed which would reduce costs to the community! as a whole. He felt confident that Civil Servants would be quite prepared to take their share of the burden so long as it applied fairly. The Primary Producer. Mr Coates said we would have to place our primary producers in the position of being ablo to market thengoods at world prices. New Zealand depended upon the volume of its exports. As a result of shortage of money coming into the country the business man, the worker, and everybody else were affected. It was essential that the primary producers should be enabled to maintain their assets and keep up production, otherwise the country would be in an even worse position in respect of the payment of salaries of Civil Servants and everything else. It was necessary that steps should he taken before the end of the present session to re-establish the producers on a sound footing. They must be able to obtain credit, and lie welcomed the Bill the Prime Minister had introduced for the relief of mortgagors. He was forced to the conclusion that the time had arrived when it was no longer possible to meet the fall in revenue by * way of taxation, and the responsibility rested with the Government to find some other way. Referring to the proposal to reduce salaries, Mr Coates said that a Commission should be appointed to review cases of hardship, particularly in regard to bread and butter men with families. They should have the right to put their case before the Commission, which should recommend to the Government a. method of overcoming the difficulty in individual instances. It would he a bad tiling for the country if it were allowed to continue to drift. He added that Civil Servants would be in a worse position than ever unless action were taken to reduce costs. He had seen private budgets of Civil Servants anc( realised their difficulties in the face of reduced earnings. The Government should make a straight-out statement to the country that it expected rents to ho decreased. He had already expressed his opinions regarding interest rates and wished to emphasise that a. decrease was unlikely so long as the Government was in the market offering 5* per cent. Primary Products. Mr H. E. Holland (Leader of the Labour Party) said lie did not think lie would he in error if he described the speech of Mr Coates as a most^ disappointing contribution to the Government’s proposals. He bad found it difficult to follow the remarks of the Leader of the Opposition, (lint he gathered that the Reform Party intended to support the 10 per cent, reduction in salaries proposed by the Government. Mr Coates had indicated that there was little local consumption or the primary products of the country, but lie had not gone very deeply into the question. Air Holland stated that the major portion of' the butter and cheese produced in the Dominion was exported, but only a small percentage of the beef. Little more than half tiie mutton was exported. The bulk oi the lamb was for export. Less than half the pork went out of the country, and oi all the other commodities very small percentages were exported. When the whole thing was boiled down it showed that an enormous quantity of primary products was consumed in the Dominion. Hardship Clause. When the Leader of the Opposition had given the House .to understand that the Reform Party would support the Government lie had insisted that there should be a hardship clause in the Bill. Air Holland asked whether that was a joke. Alembers would remember the hardship clause in the Taxing Bill of 1922 alter the strong fight made for it, and would also remember it never had been used. Air Holland said that Labour had kept the .Reform Party off the Treasury Benches lor two years, but by some process Reform had succeeded in rretting tthe Government to agree to their proposals. The Labour Party now wanted to get both parties off the * Treasury Benches. The 1 rune Alinister had gone to the Old Country pledging to no wage reductions and Ins Acting-Prime Minister had told the House 3 that as long as the United Government was m office there would he no wage reductions, but as soon as Mr Forbes returned he started to talk of reducing wages. Air Holland inquired who were the authorities Air Forbes had consulted in London. The Prime Alinister: Absolute nec-es-Sl Mr Holland said that the Prime Alinister himself had previously stated .there was no need lor wage reductions. Cost of Living. Afr Holland referred to the Prime Alinister’s hope that living costs would •tall when wages were reduced, declaring that the Government had no intention to legislate to make prices la in line with wages. He considered that Air Forbes’s appeal to employers to reduce wages was a direct invitation to break the law, because most workers were under awards. Few people would be satisfied with the Prime Minister s promise that prices would bo watc-Junl closely. The Hon. P. A. do la Porrello, M mister of Internal Affairs: Wo will go further than that. Ah- Holland warned farmers that reduced wages meant a lessened home market for their products. He demanded that Judges’ salaries should be subject to reduction. There should • be no exemption, even of the Governor-

General, if all Public Service salaries were attacked. He coukl find in Ministers’ speeches declarations time after time against wage reductions. They even went further, advocating restoration of former cuts. The Government was prepared to scrap every atom of its pledges and should submit itself to the electors.

Economy Measures. Sir Apiranai Ngata (Native Alinister) said that, despite the unpopularity of its measures, the Government was facing the situation. He enumerated the Government’s economy measures last session, declaring that no party was louder than Labour in its protests. Economy was unpopular. Members talked it, but when confronted with economy affecting their districts, they objected. As a member of the Cabinet Economy Committee, be found it the most distasteful duty in bis political life. Data was prepared for the Prime Minister on his return, and hv the end of January Air Forbes was prepared to call Parliament to enable the Government to effect economies at the earliest moment. Air Harris (R., Waiteinata), speaking from the Reform Benches, declared it "unthinkable that men earning €2OO or less should suffer reductions: Money could be got from higher spirit duties. , Air McCombs (Labour, Lyttelton) opposed any tax on public servants not shared b.v other sections of the community. ' 'While agreeing that the Budget must, be balanced, the Labour Party criticised the bungling shewn by the Government in handling thy problem. He reminded Air Coates that when his party enforced two cuts housing costs went up bv leans and hounds. Quoting a number of authorities he maintained that high wages stimulated production by creating widespread purchasing power. .Experience in the Dominion proved that wage reduction was not passed on. There was a reduction of wages in secondary industries totalling £1,200,000 in 1921-22, and in the following year these industries showed increased profits of £1,600,000. The milling industry came under strict control in' 191.9 and it made higher profits. Na Breach of Contract. The Hon. AY. IDownie Stewart (R., Dunedin West) discussed the assertion that the Bill involved breaking contracts bv varying awards. Legislation had previously been enacted enabling the Court to vary awards, making its decisions retrospective,> and his firm belief was that if the Court bail not been given that power to meet' the emergency in 1922 the whole system would have broken down. Laboui made no objections when the tyle was running its way. He realised the anxiety' of the Labour Party! over the threat to the' standard of living, but whether inflation or deflation was adopted it involved hardship. Unless costs of production went down wage earners would lie laced with the lai more serious problem of depreciation m currency. It was down 10 per cent, now, with the country' just holding its own in the trade balance. The Australian Dound was down to 14s, in New Zealand it- was 18s, but if depreciation went on it would be far harder on the wage earner than airy other section.. Increased taxation only heightened costs and made the position worse. It had been suggested that the problem could be overcome by stabilising tbe currency' in New Zealand, but it would be gravely difficult because of our export, income. It had been represented that- certain sections of public servants already suffered anomalies, but as members were unable to decide these points there should bo an investigation by an impartial outside tribunal. 'I lie Government coukl reasonably be xepected to inform the House what it proposed to do in cases o* hardship. It was a fallacy that one-ninth of the community was bearing ono-tlii rcl of the Government’s reductions. Its absurdity was demonstrated by tbe assumption that wages was the only' expense of the Government. The debate was continued by Alessrs Nash (Lab., Mutt) and Black (U., Afotueka). The House rose at midnight.