NO-CONFIDENCE MOTION.

Press, Volume LXVI, Issue 19971, 4 July 1930, Page 17

NO-CONFIDENCE MOTION.

THE GOVERNMENT'S RECORD. MR COATES'S CRITICISM. hiCh taxes, heavy spending, [THE PRESS Special Service.] July 3. An amendment couched in the following terms was moved by tlie Leader of the Opposition, the lit. Hon. J. G. Coates, in the House of Representatives to-day:— "That the following words be added to the Address-in-Reply: 'But we deem it our duty to represent to your Excellency that your Excellency's advisors do not possess the confidence of fhis House.' "

Mr Coates congratulated the Prime Minister on his attainment to office. "I do it with very sincere feeling," bfe said, "because I think all of us, irrespective of Party, do like to see a man who has stuck to his Party for many years come to the top and havo the privilege of leading it. I am sure that so far as I am concerned he will not meet with any undue opposition, but at the same time he will understand that Party politics call for one thing, and that is that both sides of the question must be presented."

Object of Amendment. The amendment was then moved by Mr Coates, who added in explanation of the amendment: "I desire to say that the object of it is not for the purpose of obstruction, but to make clear to the poople of New Zealand that in our judgment tho Government has failed to give satisfaction, and failed to live up to its election pledges, and that its administration is entirely unsatisfactory. It is also for the purpose of making clear to the country that the Government exists solely at the will of the Labour Party, and in effect that the Labour Party is dominating the power that i 3 in office." Mr W. E. Barnard (Lab., Napier): Oh, no, quite wrong. (Keforin laughter.) Election Fledges.

Mr Coates said that tho Government went into office with certain definite election pledges. These pledges were understood by every member of the United Party. "I want to ask the Government if it honoured those pledges," he said. "We know those promises were wild and extravagant, and impossible of being given effect to. The Reform Party, on the public platform and through the Press, has consistently warned tho Government that its promises could never be given effect to, that there were difficult times ahead, and that the borrowing policy it entered upon was futile. Both taxation and expenditure had increased since .the United Government assumed office."

Increased Taxation. In pointing out to what extent this had occurred, Mr Ooates quoted the figures for the last year of the Eeform Party's administration, and the first of the present Government. The tax revenue* for the former period, namely.. 1927-28, was £17,145,000, whereas the tax revenue for the first year under the United Party was £19,519,000, or an increase of over £2,000,000. When the United Party took office the Eeform Party offered it a measure of co-opera-tion, but the Government's reception of that offer had not been what was to be expected in the circumstances. At the very first opportunity that offered members of the Ministry and others in the Party said they Could not carry out their election pledges because there was a deficiency of £421,000. The qustion then arose as to what Government had done to meet the deficiency. It was granted that there had been a falling off in Customs revenue, but the deficiency was used as an excuse for inaction, and Mr Ooates said he was entitled to ask what the Government had done to cut down expenditure. No effort was made at aIL The deficiency was used as a means of showing up the alleged inefficiency of the previous Administration. Since the end of the financial year the Prime Minister had declared that the country's finances were in a serious position, but as the right hand man of the former Prime Minister he must have known before that that the finances were in such a state. Time and time again during the Parnell by-election he had stated -from the public platform' that the country's finances were in a healthy fctate, and, in fact, that everything was satisfactory. In view of that he thought that the House could demand an explanation from the Prime Minister for the sudden change of front. He had ( 'frightened people out of their wits," and it appeared very much as though bis utterances upon finance during the past few months had been made for political purposes. The Prime Minister: That is not fair

I Expected Budget Deficit. Mr Coates: The honourable gentleman I says that it is not fair. This is a time for plain speaking. The country wants to know the true position, and it is entitled to know it. It is entitled to know about these sudden difficulties that have arisen. I believe the position is serious, but is it as serious as the honourable gentleman has said? A number of people believed that the £3,000,000 spoken of by tb 1 - Prime Minister was a deficiency. It was, however, merely a contemplated shortage between the estimated revenue and the estimated expenditure. Every year the Departments were asked to submit their annual requirements, and the Treasury was asked to submit its estimated revenue. It was true that there was an estimated shortage in Customs and railways receipts, but members had to realise that every Department would ask for as much as it could get. Many a time under the previous Administration there had been a shortage of £2,000,000 in these trial Estimates, but then the usual course was to send them back to the Departments for revision, and' to inform them that they would have to cut down their requirements by so much per cent. It was not time to talk about a real short age until this revision had been made, and it was not until then that the Minister for Finame should issue a warning to the country that there would be difficulties to overcome in the future. If lie bad not followed that course, be had unnecessarily frightened investors

and everyone else, not only doing harm in the Dominion, but also having an adverse effect*upon New Zealand's credit abroad. The Prime Minister shonld explain exactly bow he arrived at his estimated deficit. The Keform Party was on the Treasury benches for Fixteen years, but it took the present Government only six months to produce a deficit of £421,000, Increase of Expenditure. The charge was further made by Mr Coates that the Government had failed to curtail expenditure last year. By the manner in which the Government had increased expenditure it was obvious that sooner or later there would be trouble. Revenue had gone up by approximately £1,300,000, and according to the Prime Minister the year had ended with a surplus of £150,000, but the actual expenditure had gone up by £1,000,000. Had thj Government taken time by the forelock it could have prevented much of the trouble. Comparing the financial years 1926-27 and 1929-30, Mr Coates said there had been an increase of taxable revenue of £2,300,000. The Priine Minister was wrong when a few weeks before the announcement of an anticipated serious fall in revenue he had said the country's finances were never sounder. Primary Production. ''lt has taken the Government only 18 months to land the country in the present trouble," remarked Mr Coates. "Has anyone thought out a solution for the problem? I say unhesitatingly that there is only one way of overcoming the trouble, and that is by increased production. It is the volume of our production that is likely to pull us through. We are an exporting country so far as our primary industries are concerned, and everything in the form of the taxation costs and restrictions under which the primary producer is working must bo of first consideration on the part of all our people. Our first duty is to keep as high as possible the standard of living but at the same time we cannot close our eyes to certain facts which are facing the primary producers, and automatically everyone in this country. We have to consider the conditions the producers are working under, whether through natural or artificial factors they are at a disadvantage, and we have to place the primary producers in the best position to meet their competitors in the open market." A Labour voice: What do you suggest? •

Mr Coates: I have not the time to deal with that now, but at other stages during the session I hope to put forward what I believe will bo constructive views on that subject. Kailway Construction. Dealing next with some of the policy differences between the Roform and United Parties, Mr Coates instanced first tho question of railway construction. The Government promised last session that it would have complete figures prepared for presentation to the House as to the economic future of the lines under construction, but the figures had not yet been made available. The Beform Party contended that the Koyal Commission which had been appointed should have been charged also with the overhaul of all railways under construction. The statement issued by the Minister for Railways, the Hon. W. A. Veitch, on the previous day notifying the abandonment and curtailment of services showed that it was difficult to justify further expenditure on railway construction. The Reform Party in its last year of office had spent about & 800,000 o» railway construction work, but the United Party last year spent £1,500,000, or almost double.

Mr Coates argued that the working railways should be placed under a directorate and freed from political control. The personnel of tho Commission was also criticised by Mr Coates. The chairman, he said, was one of the principal critics of the Beform Party at the last election, and was a well-known supporter of the United Party. In appointing him to review the work of its opponents the Government could not have had the good of the whole country at heart, but was concerned with the political aspect. The country had not been treated fairly by the Government in so using political supporters. Touching on unemployment, Mr Coates eaid his Party would help in seeking a solution, but it contended that in no sense should payment be made for anything but work done. His Party also held that there should be a difference in pay between ordinary work and relief work, otherwise relief work would prove too attractive and take workers away from other employment. Mr J. O'Brien (Lab., Westland): You would put them in the soup kitchen. Mr Coates: They are going there today more than ever.

Defence. Eeferring to defence, Mr Coates said his Party was entirely opposed to wiping out compulsory service. If reductions in expenditure had to be made it would have been better to have retained the camps and eliminated the half-day parades. As it was the Government seemed to be on the wrong track. The reversion to the voluntary system would be inequitable and would not work. New Zealand had no standing army, but every young man worth his salt should be prepared to come forward and bear his share of the burden. Mr J. A. Nash (R., Palmerston) seconded the amendment. (PRESS ASSOCIATION TELEGBAiI.) Minister for Fnbllc Works. The Hon. E. A. Eansom said that during the session the Government would rely on the soundness of its legislation rather than the assistance of the Opposition to get it' through. Nevertheless he considered in a time of stress such as the present it was the duty of every Party to co-operate in the work of the country. He emphatically denied that the Government had made no effort to reduce expenditure. He assured Mr Coates that at the outset every Minister had been advised to keep the Estimates down to the lowest level, and in spite of that there was evidence that the position would be as the Minister for Finance had indicated. He insisted that the financial situation was not due to the administration of the present Government but to the fact that it had been caught in the backwash of irresponsible expenditure by the Eeform Government. The present Administration was determined to face the situation in a common-sense way. The Minister declared that the Government was fully aware of the necessity to foster primary industries. He maintained that the Government had carried out its promises so far as it was humanly possible. A new era of land settlement was commencing in New Zealand, and men with small capital were now in a position to take up Crown lands for development. The Land Settlement Act of last session authorised the provision of funds to assist them in carrying out improvements, and the money was made available by long-term mortgages at per cent. No financial organisation would undertake to lend money on such terms without security. Land settlement was being conducted under the supervision of an Advisory Board and Advisory Committees, which took care that settlers began with a fair prospect of success. Mr Eansom expressed the view that the operation of the scheme should be broadened so that additional Departments were placed in a position to co-operate in the preparation of land for settlement. The Native Department could assist in connexion with Native lands, the Forestry Department could co-operate in the case of land unsuitable for farming pursuits, and roading work should also bo

undertaken in co-ordination with other land development operations. The Minister outlined the amount the Government had expended in the prior de? velopment of Crown lands, and the number of allotments that had been offered for settlers. Replying to an interjection regarding railway expenditure, the Minister asserted that the only new railway work undertaken was the one that had been approved by the House for many years. Pay on Belief Works. Mr M. J. Savage (Labour, Auckland West) suggested that the Leader of the Opposition must have been joking when he backed up his no-confidence motion with a suggestion that the rates of pay for relief works should go back from 14s to 9s per day. Mr Coates: That is not what I said. I said that relief rates should not be standardised. Mr Savage said he did not think anyone would disagree with the importance of th<3 primary industries, but lie pointed out there were other industries in New Zealand that should _ also be fostered as a means of stabilising the financial position. They would have to utilise their own products more. The time had come for a forward policy of development of secondary industries, but he did not see any great prospect of auch a step in the Prime Minister's utterances. Mr Savage then criticised the dismissal of men in the Post and Telegraph and Bailway Departments. With reference to land settlement, he expressed regret that the Government was not '•mploying up-to-date methods, such as the use of tractors in making land ready for settlement. Mr Ransom: That is being done, too. Mr Savage: "Yes; but only in a, few cases." He went on to say that it was not fair to expect any man to break-in land using stone-age methods. Mr Savage next referred to the Government's failure to reduce the rate of interest in the State Advances Department, declaring that when the Government had promised to reduce it to 4| per cent, it should have realised that the interest rate depended not on the Government, but on the money market. Ho insisted that the standard wa.ge of workers mujt bo strengthened, not weakened. Production must be increased, and at the same time there must be a more even diHtribution of produce. He Rsked if there were going to bo further retrenchments in the Public Service, and, if so, where were they going to begin, and what was the Government going to do with the men dismissed. Was it going to send them to the Hospital Boards for assistance! With regard to land settlement, Mr Savage contended there should be cooperation betwen the Ministers for Lands, Labour, and Public Works. The Lands Department should be responsible for advising what land should be used. The Labour Department should select from the men available those most suitable for the task, and the Public Works Department should undertake the organisation of the actual work- Mr Savage called on the Government to organise markets overseas, and pointed out that there was in office at Home to-day a Government anxious to assist in bulk purchasing of the Dominion's produce. Representatives of producers on one hand and of consumers on the other should be able to enter into an agreement for a period of, say, six years, and the supervision and organisation of such agreement should bo undertaken by the Governments of Great Britain and New Zealand.

Minister for Hallways. The Hon. W. A. Veitcb said the finances of the country would be in a bad way if the dictum were acceptod that once a man went into the Government service ho should remain there for all time. Labour members: That was never contended. Mr Veitch continued that while those actual words had not been used that was what the position amounted to. He assured members that under no circumstances would the Government dispense with the services of men when there was work for them to do. The Government was endeavouring to employ men in all directions where expenditure could be justified. The Minister said it was becoming more and more strongly fixed in the minds of the people of New Zealand that it was important to develop our secondary industries side by sido with the primary industries. In that respect he waa quite in accord with tho views that had been expressed by Mr Savage. There had been a tendency to advocate buying British goods even at the expense of our own industries; that was carrying British preference too far, and was not even helping British imports because the unemployed New Zealander could not buy British goods. In reference to bulk purchase, Mr Veitch said he saw dangers in the situation, and he did not think it would be safe to enter into such an agreement unless it were continuous, so that, the time would never come when, having abandoned our former channels of trade, the Dominion would be left at the mercy of its competitors.

Ail Independent. Mr H. M. Rushworth (Country Party, Bay of Islands) said much had been heard of the loss of three millions _at Arapuni, but due regard was not being paid to the drop of over eight millions in the value of primary produce. He offered three suggestions for removing some of the obstacles encountered by the primary industries to-day: (1) Taxation should be removed from all necessities of life. (2) Oppressive rates for roading should be reduced. (3) The banking, currency, and credit system should be reorganised through Government nominees to the Bank of New Zealand directorate. Dissatisfaction With Government.

Mr A. M. Samuel (8., Thames) urged that a Boyal Commission should be appointed to investigate the Arapuni situation. He considered it would be able to handle the position more satisfactorily than a Parliamentary Commission. Referring to the no-confidence amendment, Mr Samuel contended there was dissatisfaction throughout the country with the Government's administration, and be claimed this was borne out, for instance, by the resignation of the United Member for ParnelL He described Mr Savage's speech as a further indication of an understanding between the Labour Party and the Government, and he claimed that the Labour Party had thrown its principles overboard to engage in partnership with the United Party. The situation must be a humiliating one for the Government, but a delightful one for the other Party, except for those of its members who were straining at the leash because of their principles. Mr Samuel applauded the proposals of the Minister for Lands with reference to widening the scope of the Lands Development Board, but in regard to land settlement he submitted the Government's policy had put nearly as many men off the land as it had put on, and very often it had put off a good fanner to be replaced by a poor farmer.

Labour and the Government. Mr C. H. Chapman (Lab., Wellington South) said Mr Samuel had suggested that the Labour Party had jettisoned its principles, but this was no . more true than it would be to say the Beform Party had departed from its

• policy. Mr Coates had reforred to wageß of relief workers, for instance, and in this respect Mr Chapman claimed it was an indication of poor management when standard wages could not be paid. With regard to- the present situation of employment generally, he said the position to-day was worse than, when the United Party had taken office. He admitted that he was in favour of private enterprise where private enterprise could achieve better results than public organisation, but as private enterprise had failed it was now time for the Government to step in- Mr Chapman asked what was the reason for the recent reshuffle of portfolios. Was it to save some Ministers from embarrassment? In conclusion, Mr Chapman said members were faced with a choice between the United Party and the Reform Party, and of these two he preferred the United Party, bad as it was, to the Reform Party, which was infinitely worse. Mr McDougall on By-Election Defeata Mr D. McDougall (TJ-, Mataura) defended the United Party's financial policy and contended no one could foreseen the earthquake which hap dealt a severe blow to the finances or the country. Replying to _ tlie reference to the Parnell by-election, he said ho considered "that seat was not lost by a fair go: it was lost by the rabbit punch." While the United Party had lost two seats under the "first past the post" Bystem, it had, in two byelections polled a greater aggregate number of votes than either the Reform Party or Labour Party. A reference to land speculation in Palmerston North. in which the name of a firm ''Govelock and Nash," was mentioned, prompted Mr J. Linklatei (R., Manawatu) to rise to a point ot order and ask whether it was propei that the private affairs of any member of the House should be discussed. Mr McDougall said he was not awaro that a member of the House was conMr J A. Nash (R., Palmerston): "You knew it was mo." ... When Mr McDougall had concluded his speech, Mr Nash rose to a point of order and said there seemed to have been an innuendo that he had been connected with land speculation. Hie declared emphatically that he had never engaged in any transaction affecting land in the vicinity c>f the Palmerston North deviation Mr McDougall said he did not wish to cast any reflection on Mr Nash or his firm. Mr Lysnar's Position. Mr W. D. Lysnar (R, Gisborne) said he regretted Mr Coat'es had moved his amendment. The present was not an opportune 1 moment, and be would

not support it. This was not the time for Party politics. The Parties should co-operate for the good of the. Dominion in times of stress. The country was not looking for another election, but was expecting members of . Parliament to pull together to Bolve its dif-r. Acuities. He considered the Prime Minister should make it perfectly plain that there was not an actual deficit of £3,000,000, but a deficit of that amount on the Estimates, and that steps would be taken to see that an actual deficit did not take place. He appealed to the Government not to reEeat the mistake of imposing such eavy taxation on land, which he contended was largely responsible for the situation to-day. Mr Ljfanar recommended increased taxation on debentures as a means of raising additional revenue. He concluded by asking the Government to assist producers in their marketing by combating trusts, and he strongly advocated the formation of an Agricultural Bank with long-term credits. Dismissal of State Employees. Mr D. G. Sullivan (Lab., Ay on) criticised the dismissal of Government employees. He contended however hard it might be to levy taxes to make up for the losses on the railways, it was infinitely harder for the man whose services were dispensed with in the course of retrenchment. That man was taxed one hundred per cent, of his income. It was a serious thing for him to go home to his wife and dependents and face the problem of continuing existence. He asserted the workers had suffered from changed economic conditions during the war, and were now being called on once more to pay for the general depression. If the workers shared in due and proper proportion when there were good times, it would perhaps be fair to ask them to carry such share of depression, but that was not so. A moral case existed for providing these men with work or with sustenance. He preferred work. Mr G. C Munns (U., Roskill) referred to thn suggestion by Mr Coates that the railways should be placed under a director. He described the present manager, Mr H. H. Sterling, as the most expensive man in the country, and declared he had been appointed by the Reform Government, The present Administration had not purchased Ara puni; it had not purchased Garratt locomotives; it had not bought tho steamer Maui Pomare, yet it had to bear the burden of these mistakes by the Reform Party. He urged that a larger capitation grant should be pro vided for the primary schools, and thai steps should be taken to place schoolbooks on' a more reasonablo price basis. He also advocated a greater censorship I of moving picture posters. The debate was adjourned on the

motion of Mr J. A. Young (R., Hamilton), and the House rose at 10.30 p.m. till 10.30 a.m. to-morrow.