THE NATIONAL FINANCES.

Press, Volume LX, Issue 18096, 11 June 1924, Page 8

THE NATIONAL FINANCES.

PRIME MINISTER'S REVIEW.

REDUCTION IN TAXATION.

(special to "the press.") AUCKLAND, June 10. ! A reply to certain financial criticisms levelled against the Government was made by the Prime Minister when speaking at a banquet in honour of the Hon. C. J. Parr (Minister of Education) at Mount Albert. Mr Massey said there was no need to emphasise the fact that the national finances were very closely associated with the prosperity of the country. There were a number of people going up and down the country decrying the credit of the Dominion in ordor to "get at " the Government. One of these Jeremiahs was at Pukekohe the other evening. He (Mr Massey) had since received a message from some of the electors that they had now heard all that could be said against him, and that he would be safe for the Franklin seat and the Premiership as long as he lived. (Applause.) In spite of these doleful financial critics, the best .judges in the world—those who controlled the London money market —had recently shown in a remarkable fashion the estimation in which 'New Zealand was held. Recently he had gone on the London market for a loan cf £5,000,000, and instead of that sum he had been offered £20,000,000, and that on the most favourable terms obtained by any Government in the Empire in the last twelve months. (Applause). That showed how sound the credit of the country was, according to the most competent judges. The Government had been criticised because it ended tho year with a, surplus, "Heaven only knows," said Mr Massey, "what the critics would say if we had a deficit!" (Laughter.) In the present position, with heavy expenditure to be faced, it was necessary to have a surplus. No one was more strongly impressed than the Government with the necessity for reducing taxation. No country could prosper with taxation imposed out of proportion to its, means, and happily last year, as Minister of Finance, he had been able to reduce taxation consider, ably. This year there was a surplus of over £1,750,000. "I don't know by how much I can relieve taxation burdens this year," said the Prim'e Minister, "but I hope to induce Parliament to make very, considerable reductions within the next few months." (Applause.)

Use of the Surplus. In, dealing with the necessity for financing on the surplus, Mr Massey explained that the financial year ended on March 31st. Four or five lean months followed, when little revenue was coming ii), and receipts from exports were small. That was where the surplus came in—to fill the financial biatu s by July. Last year the expenditure since March 31st was £>2,533,000 in excess of the revenue. If there had been no surplus where could the Government havo' obtained the money with which to carry on? There were a whole lot of financial experts criticising the Government, but they took not the slightest account of that annual problem. ■ Mr Massey referred to the reductions in taxation which had been made since the war. The man with a mortgage used to be taxed 06 his debt, but Cabinet agreed tOiremedy that. - The exemption from taxation ,of mortgages up to £4OOO was the right thing, and showed that the Government was concerned with the. small settler, struggling along with a mortgage. ( "Some people" he continued, "say we are not Liberals. We are more Liberal than they; could ever think to be."

Taxation Remissions. An far as reduction in taxation last year was concerned, the remissions on super-tax, income-tax, and land and income-tax totalled £1,175,000. Other remissions in the amusement tax—and he might get all this tax off shortly, though he was not quite sure yet—in the tea duty, and postage brought the total to £1,563,000; and that could not have been done 12 months _ ago except for the surplus. _ He hoped for a corresponding reduction in taxation this vear, and if that happened no one would .be better pleased than himself..

The Moratorium. The moratorium was to end on December 31st. He was going to ask Parliament to amend the law so that a borrower might go to the Supreme Court, state his case, and ask the Judge to look into it. If the Judge thought the mortgagor had a chance to recover, he would make arrangements for carrying on the mortgage for two years, but not longer. " ■ Hi could not believe that there was going to be the trouble some people talked- about. The security of broad acres was just as good as ever it was. He) knew that mistakes were made during the boom period, but as the 1014 legislation enabled the mortgagee to apply for exemption, so he proposed that the legislation should be just turned round tho other way.

Fight Tor Markets. Exports for the last financial year totalled £51,652,606, and.it had not been a particularly good season, imports as a rule followed exports, and they were quite satisfactory. A word of caution was advisable,, however, iio was quite certain they were going to have keener competition in overseas markets. He believed that the trade of New Zealand per head of the population was higher than in any other country, in spite of all the peopl® who were going about saying that tne country was going to blue ruin. A voice: A Jeremiah . Mr Massey: Jeremiah was not in i£A great deal was sometimes made, he continued, of the rate of taxation in this country, compared with that in others. A return made to the House of Commons, in the compilation of which an error had occurred, New Zealand compare unfavourably with Australia. These comparisons could never be quite just, asthere were varying conditions in_ different countries. Australians envied New Zealanders the reductions of taxation they recently enjoyed. A representative of a large Australian firm recently informed the speaker that his company's income-tax was 12s 6d m the pound. "When opportunity offers I an l going to ask Parliament to reduce taxation still further," declared the Prime Minister, amid applause.

The Public Debt. His attention had been drawn to the fact that the country owed a tremendous amount of money,

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£218,000,000. While that amount was certainly owed, •what wetfo the in-terest-earning assets -There was £156,090,000 undeij this head, the deadweight of the debt W&s also productive. He might have made the figures much better than that, as he had not taken into account public buildings, harbour works, tourist .resorts, State forests. Samoan Crown ear tates, and cash to the value of another £51,000,000. The Statq Advances Department was a little too enthusiastic in its lending while he was away in London. He found on returning that New Zealand was faced with tremendous liabilities, and it had been necessary to limit the loans to £250,000 a month, or £3,000,000 a year; That rate of lending could be kept ' going. Speaking of the clamour for a State Bank, the Prime Minister said we practically had such an institution in the Bank of New SScfiland. The Government recently purchased 375,000 pound shares at par, which were now quoted on the Exchange, at 528 6d, representing £500,000 to £600,000 to the good on the deal. "There is no sounder country in the Empire from th© point of view of finance and of general prosperity, than that to which we are privileged to belong," copcluded Mr Massey