BIG SURPLUS.

Press, Volume LXII, Issue 18668, 17 April 1926, Page 16

BIG SURPLUS.

• DOMINION AFFAIRS. MR COATES ON OUTLOOK. .."The Government expects to finish tip the year with a surplus of well over -£1,000,000. In. making the above statement- in the Course' of -a speech at Kingsland, Auckland, on Tuesday, the Prime Minister "(the Eight Hon. J. G. Coates) stated that much had been said about the .financial position of the country, arid' what the Government was likely to' do. When' imports began to overtake exports, a certain amount of financial depression, could' be looked for. The. 'Government hoped by conserving resources t and using due economy, to tide the country over the difficulty. They were, told'that the country was going to the dogs, but all who were loyal, and whose vision was uncoloured, would find that the' best man was the man who had full hope and confidence in the couritry and its future. •The Government purchase of tax-free Avar bonds was explained by Mr Coates. During Mr Massey's term of office as Minister for Finance, he endeavoured, wherever it Was possible, to reduce interest charges by purchasing free of income tax'bonds coming on the market, and'by refusing permission to local bodies to offer more' than 5J per cent; for such loan moneys as they sought to obtain on the open market. "Throughout the war, money was cheaper in New Zealand, and more easily, '.obtainable for drafts on London than in -the Commonwealth,'.' he .continued.. "The Bank of. New Zealand repeatedly gave the Australian banks itr assistance in that direction. By the purchase of free of income tax securities- to the value of £5,316,842 and the purchase of: other stocks (State Advances securities. £1,140,000, Bank of New Zealand shares £375,000,, and sundry Treasury securities £1,217,936) to the amount of £2,732,936, the Consolidated JPund benefits to the value of £1,174,530 annually." , "Depression Not. Here Yet." ' It'had been said that the country was in foV'a bad time, but a,depression'was not here yet. A,ivoice: "Walk dowrn Queen street and. see the girls selling art union tickets.," . ,■',,'■•.■. "*Well, perhaps you won't be able to buy'arV union tickets soon," said Mr ■ Coates. The, best way ;to assist the country in » time, of depression was to recognise that there should be no. waste, and, he advised all..those in employment to "stick td their jobs'like glue." An interrupter near the front voiced n' loud: complaint that.he was out of work/and. wanted to know what-Mr Coates was going to do about it. iir'Cfoates": '<We will see what we can do "to help you' out. But because .a man is\o.tft"6f work'l'don't want him'to regard;: mis. as ah -enemy. I am not the ' energy of any.tnan or woman in New Zealand.." .(Applause.) • 'tfor,the,first time.for-nearly eighteen months there had been slight signs, of unemployment. "In such times /this meafct.that the people had to exercise e'e'otoniy. 'The Government likewise had;'-to eut down overhead costs, but thisftdid •apt- meant vigorous retrenchrMMAna'the putting of a lot of men out,'»f 'work. The' Government would. t do "*Ui it* could tto_ meet .the'situation, ' do its'doty to. the country, and^to/those';who found difficulty in .• iv:;'.'.'v:. :Intj»reet Batas. M% -floUtaii- had;charged the Gov r .the rates on pttiit . Advances,., jar Holland claimed thatt 'he \ had. predicted bit the elee.t«te£tK<t:;tHp^ i : in'ei l e.a|e/,th'e and-.Ho workers '; -'wto.''/wished "io buy rtotUAs.''. by deinhe had^k.en:lpftw,V' /ye<|t;,to' raise; its rates tAeV^possibility: of obtaining money atfitlie old rates..' "Five loans raJ*«Oetwieen'4?2il«w4 1925, aggremjjing actually,-, cost-on PP?H « r » <joa,<e|,vsai.d. ."There w«f, i epn,ae<rueßtly,iJi loSs' ( ,OfV 13a per cent, on n th« the States Advances jOffice., during! 1924-1925 on .interest .lies cost at r'edemptibn is added-o!f 16s flld'rper cent., which haveitoibemet by the.taxpayers, many' 61 Jthert'lbeirJgr'unable to borirow from 'the- ;GoVerrln¥eiit,' tfrbtild be paying:fronj't-ejsTjer cent,tto 7j'B; t '9,"and .ev«h fc per ■cint:,; fdr 'sneh'aecornmodatioii • as.','they r ''re i quireJi.*''The . 'average am'onht advanced the last years was approxirflately. £5,900,1 flOCr,* and on this sum the '., estimated yetfrly loss of interest to the-Department had the rates of interest:not been inrieitsed; have been £52,000. Did Mr .Holland propose to> let put the monpy;for,3d} -years r and allow the borrower to pay back ' & 375 less per aiOOOf ' Who was goings,to pay , for the? deficiency t ; All the Government' asked; Jwas that the'' borrower •< should. pay fot ;the cost of the-' money ,and no more. . '•!■ ' ' ••'.■' ,: • ;-.' ) Soldier' Settlements. • Implying, to an interjection relative to the'.losses incurred in the settlement of soldiers, Mr Coates: said'that.in this connexion' that £5,000,000 wotod'h'ave tp ! be written off, but that - did^npt'matter, ItrWquld be paid.out of ■ ftcctunulated'surpluses, and . would .cost^no t O/te;anything. He knew some', land' had been hour;! t by the Government at.'fy'gh prices, and others had Also been .bought, peak, valuations. The Government, had said it would, stand behiid the. soldiers, and he knew the ;>publie'supported that attitude. ' With regard "to a charge, that the Government Had increased Customs tax: ation, the fact was that ■ the rise in revenue from this source was solely due tb'great-imports. The average percentage-) of Customs duty had decreased fr0m,20.68 in. 19,05 to 14.68 in 1913, and further to 14.51 per cent, in 1925. 'Mr Coates declared that if heavy taxes were suddenly put on ernmentfs so-eallfed wealthy friends, as Mr Holland suggested, the effect would bef,to,keep out of the country capital which was'urgently needed for the development of primary industries. The Government's policy was to reduce taxation* an,d to encourage primary and secondary industries alike. To say by increasing taxation';,vr.as simply, absurd. UndaJtihe^pyesent'policy, capital was coming into the eppntry.from Australia and elsewhere. It was said the. Government was taxing the workers. (Loud assent from the' Labour section.) The percentage of Customs duty in 1925 was- the lowest for 20 years. The; breakfast table was practically free. Would Mr Holland take the duty off boots, woollen goods, sweets, candles, biscuits, bottles, or soap J Mr Holland knew that thousands ot. people in .New Zealand were, dependent on those industries.\ . Again, Mr Holland said the Government would go in for.wholesale wage deductions. It had no such intention VliltiVar.' i ''--'».i';i , do. its bes,t ..'to;.Tpainfadn.;the standard of wages L , t( > '*** : '>* improved. As you I ■' .•::«»ow, f there is only a certain amount 1 .but I will. do my best M ' nutn .and: woman of a-- ■ • aviaj wage.'»

Savings Bank and Pensions. Replying to an allegation by Mr Holland that "withdrawals from the Post Offiee Savings Bank showed an enormous decrease in the people's savings, Mr Coates said that for the year 1925-26 withdrawals exceeded deposits by £785,930, but the excess for the previous year had been £830,712, or £44,782 more. However, in 1924-25, interest accrued to depositors was £1.680,919, so that the excess, of withdrawals was less than half the amount earned in interest. ■Mr Holland had forgotten the interest-earning power of the_ nioney' on deposit. The average to the credit of a depositor was £63 17s 3d, as com; pared with £44 2s 6d for all the savings banks of the Commonwealth. The whole course of Reform Government legislation .had been in the direction of improving the position of the pensioners, increasing the scope of-the pensions and the amounts payable. In support of this statement, Mr Coates said the pension pavments for the year 1925-26 amounted to £2.446,626. Admitting that war pensions swelled the total considerably, the amount paid in pensions last year was a big advance on.the £500,000 paid in 1912, when the Government came into office.