THE FINANCE BILL

Ashburton Guardian, Volume 51, Issue 135, 20 March 1931, Page 3

THE FINANCE BILL

DEBATE IN THE HOUSE.

LABOUR AMENDMENT MOVED. GRADED TAXATION URGED. (Abridged from Press Association.) WELLINGTON, March 19. The debate on the motion for the second reading of the Finance Bill was resumed in the House of Representatives by Mr Carr (Labour, Timaru), who declared that to reduce wages would create an obstacle to the free circulation of money, thus hindering recovery from economic difficulties. He could not agiiee that wages reduction would result in the fall in the cost of living the Prime Minister anticipated, because wages amounted approximately to one-third of the cost of production, therefore there would be a saving in costs only to that extent. It followed that a 10 per cent, reduction in wages would at most provide scope for a 3-£ per cent, fall in the cost of living, and it was unlikely that the saying would be passed on to the community. Mr Carr expressed the opinion that there would be economic recovery much sooner than some people anticipated, and lower wages would continue to obtain long after the reduction was required. Costs Must be Reduced. Mr Poison (Independent, Stratford) said figures showed that the depression would not lift as soon as the previous speaker believed. Cuts had been necessary in Australia, and New Zealand was demanding similar action in order .to restore the economic position. New Zealand consumed only 15 per cent of her butter and cheese, 40 per cent of her meat, and only 3 per cent, of her wool. It was clear that prices must be governed by export parity, and recovery depended entirely in getting production costs down in order to increase exports. Farms were beginning to go out of production already m the Dominion, and more would go out unless costs were cut down. Another serious aspect was the drop in the percentage of fertilisers used at present compared with normal years. He considered the Government should arrange for farmers to be financed. The farmer had already suffered and so had the business man. Civil Servants were in a better position in New Zealand than in Australia. . The Civil Servant was in a sheltered position _ and had superannuation when lie retired. It was clear jn those circumstances that he was not being asked to bear an undue sacrifice. Living costs had already fallen about 10 per cent, and would fall further after wage reductions. According to the Economics Department of Canterbury University College, wages made up 60 per cent, of production costs in New Zealand. The pi'oposals of .the Government did not go far enough. There should he a review of the taxation system in order that the standard of living could be maintained. Until a survey was made from this angle there was hound to he dissatisfaction. Mr Clinkard (United, Rotorua) said that in his opinion the national expenditure had become greater than the taxpayer could bear, and the only way to lighten the burden was to reduce the cost or reduce the number of employed. The latter measure would not he justice, but could not be avoided if the present scale of wages were kept up. The Government was being asked to live up to production. .The trouble was that the people of the Dominion had been living far beyond production. Too much had been spent on motorcars, and lie suggested that their importation should be prohibited for two years. Increased salaries did not increase local production. In the majority of cases the increase was spent in imported articles and so made the credit of the country worse, v

Labour and the Farmers. Mr Armstrong (Labour, Christchurch East) said that Labour was anxious to improve the conditions of the t£ii“ mers, on whose prosperity the conditions of the workers Largely depended. What was required to assist the primary producers was reduction m interest costs. He declared that the struggle for existence in many Civil Servants’ ■ homes was already harder than it had a right to be in a- countij like this. He instanced the case of a Civil Servant with a-family of six who received a wage, which w r hen the 1U per cent, was taken into account and the contribution to the superannuation fund was deducted, would amount to only £3 3s. He contended it was an outrage to expect a man to raise a family under such conditions. Mr Lysnar (Independent, Gisborne) said if the Government had gone properly about the business there would have been no need for salary cuts. Returns from primary products had increased millions before the slump, hut the trouble was that the producers did not get the increase. It had been swallowed up ibv trusts and combines. He criticised the actions of the Meat Board, adding that if the House had parsed his Meat Bill last session the producers would have been receiving better prices to-day. He was still living in hope that the Government would have enough wisdom to deal with the problem of trusts and combines. It was paltry for him to have to discuss the Bill before the House when it would not have been necessary at all if the steps he had mentioned had been taken. , ~ A Member: Do you support tlie Bill?*Mr Lysnar: Of course; I have no alternative as things stand at present. The Railways. The Hon. W. A. Veitch (Minister of Railways) said he wanted a few minutes to replv to criticisms of the Railway 'Department. The railways had been losing for some years and a great many economies had been made before the 10 per cent, cut was contemplated. His greatest regret was that he had to dispense with the services of a lot or men in the department. W hen he took over the portfolio of Minister of Railways he was asked to effect- economies. A saving of £390,000 had been aimed at, but the actual saving for this year could be estimated at as much as £450,000. Unfortunately, however, as a result of the business depression the railway revenue had fallen off' to an extent not very much greater, but nevertheless greater than the saving in expenditure. It- had to be recognised that the loss on the railways would have been greater had economies not been effected, and futherrtiore their benefit; would be felt when business conditions returned to normal. Referring to the increased rents lor railways dwellings, the Minister said the General Manager bad been given power to investigate cases, and. where it could be shown the increases were unfair or inequitable, to make the necessary reductions which, of course, would operate from the date the rents originally

were raised. Dealing with the proposed reduction of Civil Servants’ salaries Mr Veitch said there was no question as to whether Civil Servants deserved what they at present were receiving. He knew they were a fine body of men, but money was not available to pay the existing rates. > The Government/ hoped the time was not far distant when it would he able to return to them what was being taken from them to-day for n> other reason than the hard facts that money was not available and it was impossible under the circumstances to treat them any better. Air Semple (Labour, Wellington East) accused the Government of 1 completely failing to grasp the big problems existing. Many! unemployed were engaged in futile tasks. The Wheat Duties. Captain R.uslnvorth (Independent, Bay of Islands) discussed the broad aspects of the economic problem, claiming it was possible for New Zealand to”devise an independent system of currency which would help to relieve local problems. He admitted' that it involved control over exports. The Finance Bill failed to get near a solution of the problem. Something far more radical was needed, and it looked as if Sir Apirana Ngata. recognised it by the hints he had dropped. He found the Labour arguments unconvincing, while those of the other side seemed forced. He desired to movo:— “That, notwithstanding anything tb the contrary contained in this Bill, its provisions shall not he put into effect, until one calendar month after the import duties on flour and wheat have been removed or reduced by at least 25 per cent.” Air Speaker refused to accept the amendment, but desired an. indication from the House whether lie should advise the member. > Mr Fraser (Labour, Wellington Central) objected, therefore the matter dropped. Air Rushworth remarking that he would take action on a future occasion.

Remedy for Unemployment. The Hon. H. Atmore (Minister of Education) advocated shortening the hours of labour as a means of overcoming unemployment. The world generally lie declared, must face the snoitenin'o- of the hours of labour —that mustT be the next step. “I know there will be arguments against it —the same arguments as were used against the rcuuction from 16 to 14 hours, 14 hours to 12 hours, 12 hours to 10 hours, 10 hours to 8 hours,” he said. • Continuing to an accompaniment ot a chorus of “Hear, hears” from, the Labour benches, Mr Atmore said it had to be recognised that the machine was made for man, not man for the machine, and that if man were to be master of the machine and humanity to obtain the benefits of the inventive genius of man and rise to the highest destiny, then the shortening of hours of work throughout- the whole world must lie faced, and must be the next step. Dealing with the Government s wages cut proposal, the Minister said he believed that what was submitted to the House was a way out. If they had to curtail expenditure, they had to go where the bulk of expenditure was being made. It could be taken for granted that no Government would have made wage cuts in an election year had there been any other way out of the difficulty. He believed, however, that'the Government would he doing the wrong thing if in a time like the present it did not spend monev on the best form of education. Air Fraser: Do you think a man on £3 10s a week can stand the cut ? The Minister: I believe the alternative to taking 10 per cent, off salaries was 10 per cent, of dismissals through the whole service. Toe best alternative was taken. If it could have been avoided it would not have been done.

Relief Methods. Mr Kvle (Reform, Ricearton) asked if the Minister of Railways was going to bring about prudent finance on the lines he had indicated when many miles of new railway were being built without a hope of returning a profit. Unemployment relief was being conducted on such ineffective lilies that it tvas like putting men to wheel smoke in a wheelbarrow. They were given two days w r eekly hoeing up grass which would grow again. The Unemployment Board would do far better by subsidising local bodies’ rates. Then the work would be done from revenue under close supervision. _ Ho predicted that unemployment registrations, now 30,000, would increase to 50,000 by June. Commenting on Mr Atmore’.s declaration that of work should be reduced, Mr Kyle hoped the Prime* Minister would take serious notice of such an announcement from the Ministerial benches. He believed: that pin-pricking conditions in Arbitration awards were a much worse handicap to industry than the wages which had to be paid. A Labour Amendment. Mr Jordan (Lalxmr, Manukau) moved to delete the reference in the motion to the second reading, in order to insert: > That this House declines to give a second reading to a Bill which fails to meet the Dominion’s financial obligations by means of graded imposition of taxation in accordance with citizens’ ability to pay.

Mr Jordan detailed the petrol imports and landed costs, declaring tin t it was possible to import petrol at sixpence, though after paying the taxation of sixpence it went into the bowsers at Is 9d. If octroi were taxed at a shilling it would yield £1,8()2,b0S or more than the estimated yield fiom salary cuts. Mr Mason (Labour, Auckland Suburbs) seconded the amendment. He contended that the prosperity of New Zealand was in our own keeping. IVo need not necessarily be bound by slump conditions imposed from without. Why should the country’s internal organisation he thrown into confusion when prices slumped in London? Why could New Zealand currency not be managed ? Mr Hall (Reform, Hauraki) urged, the removal of salary and conditions in the Public Service from political control. He opposed an all-round reduction, because it involved many injustices, and lie hoped the Prime Minister would accept the suggestion to adopt a tribunal to relieve hardship. Mr Chapman (Labour, Wellington North) complained that various Governments shifted the incidence of taxation more and more from incomes to classes of taxpayers less able to bear the bui Jen. At midnight the debate was adjourned till Friday afternoon.