A LARGE SURPLUS.

Auckland Star, Volume LX, Issue 222, 19 September 1929, Page 13

A LARGE SURPLUS.

IS IT PRUDENT? MR. COATES HAS HIS DOUBTS. REPLY TO SIR JOSEPH WARD. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Wednesday. A reply to statements made by tae Prime Minister in connection with finance was made by the Leader of the Opposition (Rt. Hon. J. G. Coates) this afternoon, when he made special reference to his Auckland speech in connection with the Budget. ''What I said was that an impression had gone abroad that the deficit for the last financial year was a liability and a charge upon current revenue. "I stated," continued Mr. Coates, "that the deficit had been met out of accumulated surpluses, and I showed that after the deficit of the last financial year had been met, approximately £2,200,000 of accumulated surpluses had been carried forward. "It certainly is a matter of opinion whether primage duty is a sound method of collecting money. This no one can logically deny. Primage levies make no reference to capacity to pay and in the last resort they increase the cost of living. In principle, the levy is definitely unsound. "The Budget proposal in regard to the supertax on land, or income tax* whichever is the greater, avoid the material principle of capacity to pay. Income tax does meet this principle; super land tax does not. No better evidence need be sought than the admission of this by the bill introduced yesterday, in which it is proposed to provide for the principle of hardship. "Sir Joseph has decided to go for a large surplus. This is patent to anyone acquainted with affairs. Is the policy a prudent one 1 The Opposition holds that the Post Office surplus or part of it, could have been legitimately used as income for the current year. The effect of taxing debts on land amounts to a levy, and the further result of this must lead to depreciation of land values. "Sir Joseph Ward says that nothing has been done by the Government that can be construed to mean what I said had happened in connection with the Main Highways Act, and that I have drawn on my imagination. Will Sir Joseph look at the current Estimates? If he does so he will find that no provision has been made for the £35,000 specifically provided for in section 14 of the Highways Act, 1922. Will Sir Joseph read his own speech to be found in Hansard (Vol. 14 of 22nd August) in which he says clearly in reply to my query, that interest is to bo now charged on all moneys transferred in the past from the Public Works Fund to the Highways Board as provided for by section 16 of the Highways Act, 1922, amounting to approximately £1,000,000? He further states that in future capital moneys for construction and highway Requirements will be borrowed under Highways Act authority. This will mean: (a) The Highways Board will lose an annual Errant of £35,000 from the Consolidated Fund; (b) lose a free grant of £200,000 from the Public Works Account; (c) pay interest on all Public Works moneys lent to date. Highway funds will thus be the poorer by £35,000, plus interest on, sav. £1,000,000 at, say, 8 per cent. Reckoning the interest on £1,000,000 at £80,000 this with the £35,000 added will mean that there will be £115,000 less per annum for the purpose of assisting local bodies."