REPLY TO LEADER

Ashburton Guardian, Volume 56, Issue 16, 31 October 1935, Page 2

REPLY TO LEADER

DEMOCRAT FINANCIAL POLICY.

ANALYSIS BY MR COATES.

iPer Press Association.) AUCKLAND, October 30. The cost to the country of fulfilment of the Democrat Party’s promises was the subject of comment by the Minister for Finance (the Rt. Hon. J. G. Coates) during his speech at Riverhead. Mr Coates explained in detail his estimate that the promises of the Democrats, if carried out, would involve a national cost of nearly £22,000,000 a year. “I do not know whether to describe the Democrat programme as a comic opera, political burlesque, or a fairy tale,” said Mr Coates. “It is a pity that Gilbert and Sullivan are not here to help Mr Hislop with the libretto, and put it to music. However, perhaps a revised l version of ‘Alice in Wonderland ’ would servje just as well. At Masterton, Mr Hislop said about a frog and an ox, apparently likening himself to the ox. The Democrats will at least share the fate of the ox in November, when

their political slaughter takes place. “Recently I stated the cost of the Democrats’ promises to, be £22,000,000 a year, quite apart from the provisions of the Budget., Mr Hislop tried to cover this with a, smoke-screen about reductions in taxation. Mr Hislop was quite specific, and we can nail him down to figures without difficulty. The amount of his reductions would be as follows: £ (Sales tax 2,500,000 Gold tax ... 100,000 Income tax 425,000 Unemployment levy 410,000 Wages (from 8d in the £ to 6d in the '£) 758,000 “ This makes a reduction of £4,193,000 in revenue, out of which £3,000,000 would fall on the Budget . and more than £1,000,000' on the Unemployment Fund. “The increases in annual expenditure promised by the Democrats are as follow: Health insurance 2,000,000 Increase of 25 per cent, in pensions ... 858,000 Full restoration to civil servants 800,000 Annual cost of restoring the superannuation fund .... 500,000

Export subsidy to give benefit equal to exchange ... 9,000,000 Similar subsidy on locallyconsumed production .. 4,500,000 “These make a total of £17,658,000, so that the complete gap is therefore just under £22,000,000. In addition, there are other smaller items of expenditure such as the inci’eased cost of education, extending the school age, and the increased cost of teachers' , salaries.” Mr Coates referred to the cost of the proposed 1 subsidy in place of exchange. Mr Hislop had said the Democrats would help the farmer by di-

rect personal payments of an export subsidy to a degree at least equal to the exchange benefits, with half the cost to the community. Since the payment was to be personal, the subsidy would have to be given on local consumption as well as on exports, andthe cost would then be £13,500,000. Mr Hislop’s policy either meant that, or else it meant that some farmers would receive the subsidy and others would not. In the latter case, it appeared that Mr Hislop would have to determine who would get the payment. Perhaps there would be an army of inspectors deciding which fartners needed assistance. However 3 it was judged that the whole scheme was fantastic beyond description. “The gap of £22,000,000 to which I have referred,” Mi* Coates added, “takes no account of Mr Hislop’s proposal to put 40,000 unemployed in full work at standard rates of pay. This would cost a t least another £12,000,000 a year, and possibly as much as £17,000,000. All I want to ask Mr Hislop and Mr Caughley is how they propose to dose these gaps.”