BUDGET DEBATE.

Press, Volume LX, Issue 18138, 30 July 1924, Page 12

BUDGET DEBATE.

* THE OPENING SPEECHES. (ASSIDJKD PSSSS -ISSOCIAIIO.S- iSPOSI.) WELLINGTON", July 29. When the House of Representatives returned at 7.30 to-night, the debate on the Financial Statement was opened by | Mr T. M. Wilfora, Leader of the Opposition, who said he proposed to spend tho time at his disposal in showing that it was a Budget of inaccuracy and misrepresentation. Further, the inaccuracies were not. only to be found in the figures produced outside the Budget itself. It was a colourless Budget, devoid of policy. Time was when the House looked for the policy of the Government in the Budget, but that time had gone. There was no policy in tho Budget, because the Government had no policy. Wo had come to the time when we had Government by Commission. There were Commissions on various subjects, notably one on taxation 'which was set up to find a way out of difficulty for the Government, j This Commission he did not propose to discuss at present, but would proceed to show that the Budget was, as he had stated, inaccurate and misleading. The first inaccuracy was the statement that the profit on British 5 per cent. War Loan Bonds amounted to £137,540. That was not so. for the figures produced by the Auditor-General showed that the loss on this transaction was £6758. Coming to the Discharged Soldiers Settlement Account, ho declared that interest was not being paid on the capital sum in vested. There was now facing this country liability amounting to £1,430,000 in connexion with this account, but this was not set out iu the Budget. In some cases the Primo Minister credited renewals of loans as loans paid off. That was absurd. Ho found by the Auditor-General's figures that only some five millions had been paid off, and not eight millions as stated in the Budget. Referring next to the reduction of tho public debt, ho contended that the statements in the Budget were misleading. The Prime Minister stated that the public debt had been reduced, but the Auditor-General reported that the debt had increased, in the 12 months under review, by £2,663,037. Then, again, the receipts and expenditure in connexion with the Bank of New Zea land Account did not show tho receipt of £375,000, and this sum should have been shown in the Budget as it was in the Public Account. The figures given in connexion with the War Expenses Account were wholly unreliable. More than the Budget contradicted itself. It was a remarkable document, giving, as it did in different placos, different sets of figures. He gave instances of what he styled self-contradic-tion, and declared that the figures were so unreliable as to be utterly worthless for purposes of calculation. Discussing tho State Advances Account, he declared that there was no way of checking the advances made by this Depart ment, as the information he had asked for had not been supplied to him. It was likewise impossible to get at tho earnings of tho railways, because tho Prime Minister put into his Budget several different accounts, none of which tallied. There were different statements made as to the capital value of the railways by the Public Works Department, the Year Book, and the I Budget. If the Prime Minister's state- | mcnt as to the earnings of the railways j was correct, then his statoment as to their capital value was wrong. Coming to the assets set off against the debt~ of the country, one of these assets was set down as: Immigration, £2,689,075. He would like to know, during the courso of the debate, ho v.- this was arrived at. Samoa was also set down as an asset, no notice evidently having been taken of the loau granted to that country. Speaking of the funding of the war debt, he claimed that no reduction in tho rate of interest had been secured under the funding arrangement There was a good deal of camouflage on this subject in the Budget. Turning then to the position of the fund raised in connexion with H.M.S. New Zealand, lie said that under the Naval Defence Act, i:-)0P, there was a wise provision under which 4 per cent, was paid to the Public Trustee by way of a sinking fund. By 19521-22 wo had in trust £931,431, and had thcs<? payments con- ; tinued we would have by 1928-29 i £1 795,166, or within range of the total cost of the ship. But the sinking fund had been stopped, with the result thai cur liabilities iiad been greatly increased by the Prime Minister 's method of funding this portion of our debt. He was quite satisfied when the Prim? Minister was last in England lie was the easy tool of the financiers of Britain.

The Hon. 0. J. Parr said a great deal of Mr Wilford's criticism was quite illusory. His reference to the capital cost of the railways was a case in point. He said there was a difference between the capital value estimated by the Public Works Department and by the Budget. Necessarily that was I so. because the Public Works Department was working many miles of railway which did not come under the Kailway Department at all. His reference to immigration was another case in 'point, but that he would leave to the Minister in charge of that Department. In the same way the payment of £375,000 made to the Bank of New Zealand was well understood. Thei-j was no mystery about it. The money was paid for the shaves that the country took up, and was a good investment i'ov Hie Dominion. The figures <nven in the Budget were quite accurate and dependable in all respects. Mv \ Wilford made out that he had a case against the Budget, but he took caro 1 not to discuss the big things in it. Ilis criticism was petty, and be eonfm- j ed himself practically to its mere aritli- i metic. The Budget showed that the country was in a sound position. It showed that there was a surplus of < £1,500,000. due to careful administration. It was savings; not money wrung from the jiockets of the people. The estimates of expenditure were most r-arefully prepared, and, he ventured to say, never in tne history of the country had there been such accurate calculation, in spite of what Mr Wilford had said. The was that the National Debt had been greatly reduced, and if there were discrepancies between the Prime Minister's statement and Mr Wilford's it was due to the tact that one was referring to I the net National Debt, while the other referred to the gross debt. There wa; also a reduction in taxation, amountin" to £1.000,000 announced in the Budget, about which Mr Wilford said nothing. More than that, the credit of the country never stood higher in. i Britain than 'at the present, as was , proved by the favourable terms oti i which our latest loans were raised. Mr ' Wilford had said that the Budget iva« ' eivourlcs. that them was no policy in but why should the Government fill with policy items, when in tl r- Governor-General's Speech there policy enough to keep the House i-ullv occupied for weeks? Mr Wil'ord always wanted fireworks, but he would remind him of a recent statement made bv President Coolidge: "What, wo want in politics is more of the offic? desk, and less of the show window." The kevnotc of the Budget economy. It was an office-desk But,- . r pj The Prime Minister was indulgfu,-' in a "ca' canny" policy in connexion with public finance. When

looked at oar public debt, our local body debt, and our private indebtedness, amounting to not less than £550,0000,000, the need for this could bo understood. Care must be taken in connexion with borrowing. This referred in particular to local bodies, whose borrowings should bo confined to only the most urgent works. What had carried ua through so far had been the high prices "which wo had obtained for our exports, but we wore in sight of very keen competition from South America. The alarming feature was that our exports had increased much more in value than in quantity, and t> this fact; he directed serious attention. Another matter for serious consideration in this country was the size of the Public Service. There' were altogether some 52.549 persons in the Public Service, and the salaries bill was about £1,000,000 a month. This was a considerable burden for a small country to bear, and while he did not say that that Service should not bo kept in a state of efficiency, he urgei that every case of employment must bo carefully scrutinised. Mr Parr said he had listened in vain for some evidence of Mr Wilford's own financial policy, but had failed to hear any. What he did find was contradiction besides that for which Mr \\ ilford blamed the Budget. Mr Vilford had declared, wherever he had spoken in the country, that the Government was extravagant, and was everlastingly borrowing large sums of money, yet at the same time lie demanded that the Government should enter upon schemes —more pensions, more money- for settlers, and so on —which would cost not less than £10.000,000. So far as soldier settlers were concerned, Mr AVilford now denounced the very policy of which ho was the most ardent supporter in 1919. It was impossible to extract a financial policy from him that had tho merit, of consistency. The speaker then proceeded to criticise Mr Wilford's advocacy of agricultural banks, which he (Mr Parr) contended would bo so tied up with restrictions that they could not; possibly compete with the Advances Department lending at per cent. It was true it was not possible for the Advances Department to make every advance as soon as it was asked for, but how could agricultural banks, with restricted capital, do any better 1 On the subject of banks generally he said there was often most unfair criticism. In the recent years of the slump the banks had saved the country from a most serious crash by coming to the aid of many institutions and individuals, who otherwise must have crashed, and only tho courageous policy of the banks had saved the position. He could not understand much of tho hostility to the banks, as the position would not be improved by i State Bank. Australia was not benefited by its State Bank. The Commonwealth Bank paid no taxation, and he ventured to say that, if we exempted our banks from taxation, wo would have a much lower overdraft rate. Coming to the Education Department, Mr Parr reminded the House that tho expenditure was now over three millions per annum. Of this sum over 80 per cent, went out in payment of salaries. He did not say Salaries were too high—they were good—but he desired to remind tho country that 80 per cent, of the total expenditure was paid to teachers by way of salaries. Discussing the .political parties iu the country, ho said tho issue before tho people was the Socialism of Marx, as advocated by the Labour Party. Tho Reform Party was tho sure .shield and defence against that policy, and ho invited the Liberals to come over and fight it under the Preform banner. In conclusion, he contended that the Budget disclosed the country to bG in a sound position, and, notwithstanding the somewhat mean arid petty criticism of the Leader of tho Opposition, it showed that tlie finances of the country had been placed- in sucli a satisfactory condition as to entitle the Prime Minister to the greatest credit. The debate wa3 adjourned on tho motion of Mr Sidey, and the House ros:at 9.30 p.m. till 2.30 p.m. to-mOrrow.

Construction of the Wailii-Athenreo section of the East Const railway is now rapidly nearing completion (says a Waihi message). The railway is seven miles out from Waihi, and, providing the weather holds good, tho rails will bo at Athenree in six weeks' time. At the invitation of Mr It. 11. I>awl>er, engineer in charge, an inspection trip was made in the Department's train on Saturday by the Mayor (Mr W. M. Wajlnutt) town clerk (Mr Ritchie), and Mr Leggo._ The party visited the -Department's _ quarry, whero 875011) of blasting gelignite will be ploded on Monday in a crosscut oGft into the hill. It is anticipated that the blast will yield 10,G30 yards of metal. The party were well satisfied with the work done, su\d expressed surprise at seeing such flue ivre.is of grazing lands on the \Yailn Plains, at each side of the line.