BUDGET DEBATE BEGINS

Press, Volume LXX, Issue 21256, 30 August 1934, Page 10

BUDGET DEBATE BEGINS

Government's Policy Assailed OPPOSITION LEADER'S SPEECH | [From Our Parliamentary Reporter.] WELLINGTON, August 29. The financial debate began in the House of Representatives this evening with a speech by the Leader of the Opposition (Mr M. J. Savage) and with a reply by the Minister for Lands (the Hon. E. A. Ransom). Mr Savage began with a general attack on the Government's financial policy, and with a statement that the Government had lost the confidence of the people, and went on to develop a seven-point criticism of the budget. Mr Savage said he could not work up any sympathy over the budget. Referring to the National Mortgage Corporation, he said it seemed to him that he was forecasting another financial tragedy. It would mean the end of State lending corporations in New Zealand, and the handing over of their activities to a board. The present system was to be swept aside by the Government. The daily newspapers would show the price at which shares were to be sold from day to day, and it would provide a gambling ground for those who lived on others. The Government's policy of deflation had destroyed the foundations on which the State lending institutions rested; but what the Government destroyed Labour could re-estab-lish. He promised the people that the State lending institutions would play a part that would enable the manufactures to progress. The Reserve Bank Labour was unsuccessful in making the Reserve Bank a State institution. The bank shares rising on the stock exchange—£s shares to-day were worth £6 10s. With only £500,000 of subscribed capital, the bank was the proprietor of sterling assets worth . £ 24,000,000. The net amount ol sterling taken from the trading banks in London was £23,000,000. The bank would have to find £28,000,000 to complete the transaction. Where was it to get the money from to do that? The money could only come from the public credit. He did not say it was unsound. The Reserve Bank, like other banks, was a place where money could be manufactured when the proprietors thought necessary. Had the State been the owner of the bank, the people would have been the owners of the London sterling assets, instead of the few private shareholders. He challenged the Minister for Finance to meet him in a Wellington hall or over the air to discuss the matter at any time he liked to choose. If the people's credit was used for completing the bargain, why were the people not the owners of the London sterling assets. It was the | greatest piece of spoliation in the Dominion's history. The peoples credit was the basis upon which the whole thing was transacted. If it was sound banking policy for the Reserve Bank to create credit to meet payments for goods exported, was it not also good policy to create credit to make the goods available to the New Zealand people? Sterling Assets in London Mr Savage said the sterling assets were still in London, and were likely to remain there, while exchange remained as it was. What was the next move in the game? The bank had no authority to pay interest on the credit standing in the name of the Associated Banks in the Reserve Bank. The only way the Reserve Bank could make it available was in credit owned by the New Zealand people. The total amount of sterling purchased was £36,000.000. or £45,000,000 in New Zealand currency, which meant that £9,000,000 had to be paid by the New Zealand people to the exporters of New Zealand. Why could that not have been paid direct to the exporters instead of taking the transaction to London and holding up the Dominion's trade with British merchants? Of the total amount of sterling purchased in London £13,000,000 was utilised by the Government, which meant that the Government had to find £16,000.000 to purchase that amount of sterling. That meant that £3,000,000 had come out of the pockets of New Zealand exporters. The budget said the floating deDt amounted to £22,000.000, compared with £3.000.000 at the end of the previous year. There was apparent a hugh increase in the public debt It was not clear what the increase really was. He would like the Minister to straighten that out Coming to the Unemployment Fund, said Mr Savage, they werp told that with the balance carried forward there was £5,390,000. bu they could prepare for taxation reductions. The special exemptions were on the right lines; but the reduction of 2d in a shilling should not have been made until an opportunity had been given to 60,000 men and their families to earn sufficient to maintain themselves. Alternative methods should have been devised to employ those men at standard rates of pay before a reduction was made. Budget and Wage-earner Very little hope was contained in the budget for the average wageearner—for the man who used to have his wage fixed by the Arbitration Court. Tens of thousands of workers who had been working under awards had had their wages reduced. What hope was there for them? Were the men working under the Public Works Department to be. classified as public servants, and receive the 5 per cent, increase? There was not a gleam of hope for those men unless that was done. The budget was going to do more to divide the people of the Dominion than anything he had seen before. Did the Miinster not think it would be a more just policy to start at the beginning with the men and women who were getting the least? All that money would go into circulation, and the men and women at the bottom were entitled to the first relief. The superannuation payment looked like a red herring, said Mr Savage. Which would come t first—a general election or a superannuation fund based on the State being responsible for the payments? He thought the time had. cpxne for th® superannua-

tion principle to become universal A scheme could be devised to superannuate everybody at 60. They had to-day old men on relief jobs, but no work for young people leaving school. If the Labour party had an opportunity, legislation to give effect to that principle would be placed on the Statute Book. Labour promised that to the people. Restoration of Wage-Cuts The Minister had said the increases granted would immediately go into circulation, and give a fillip to business. Mr Savage said the fillip would have been greater if the Government had started at the bottom. The restoration to the Public Service had not come too soon. The cuts should never have been made. Since the cuts were made in 1931, the amount put out of circulation was not less than £90,000,000. If it had not been put out of circula- , tion, trade and industry would have' been in a different position to-day. All the pensions cuts, and not only old age pensions, should have been restored. There was enough money in New Zealand to restore all the cuts made, and enough of the best in New Zealand to give the people the highest standard of living in the world. He could see foundations for new divisions of the people. If the Government could keep the people divided it knew it had a fighting chance of returning to power. If the people stood together they could see that things were made right, and that injustices were not repeated. He assured the people that if Labour reached the Treasury benches it would take delight in reversing the eogine, . .