SECOND FINANCE BILL

Press, Volume LXXII, Issue 21909, 9 October 1936, Page 12

SECOND FINANCE BILL

URGENCY TAKEN FOR DEBATE

MAJOR PROVISIONS OPPOSED

LONG SITTING EXPECTED

[From Our Parliamentary Reporter.!

WELLINGTON, October 8.

Urgency was asked for by the Prime Minister (the Rt. Hon. M. J. Savage) for the passing of the Finance (No. 2) Bill, in the House of Representatives to-day. The result was that with the Opposition taking a stand against several of the major provisions of the measure, members were able to prepare themselves for a long sitting. At a late hour this evening, very slow progress had been made in the first stage—the second reading—and it seemed then that ■ the debate would go on into the early morning at least. The Opposition found two outstanding points of criticism—the clause validating the appointment of Mr Mark Silverstone to the board of directors of the Reserve Bank of New Zealand, and the provision in the bill for a change in the basis of the assessment of compensation paid for lands taken under the Public Works Act. There was also strong ■criticism of the lack of detail in the proposals in the bill for Government borrowing. Various miscellaneous provisions of the bill were discussed in detail by the Minister for Finance (the Hon. W. Nash), in opening the second reading debate. Mr Nash said authority was given in the bill for borrowing up to £13,000,000 for public works, main highways, and housing. There was authority at present to borrow only £750,000 for housing, and although the lull amount of £5.000.000 mentioned in the bill might not be required this year the Government, in its intention to build houses for the people, did not wish to be hampered by lack of finance.

Mr Nash said the most important change in the section of the bill dealing with pensions was the provision by which a mother who could prove to a magistrate that she had been deserted and had no chance of maintaining her children would be eligible to receive a pension. “The clause empowering local bodies in certain circumstances to raise loans without polls should be advantageous,” the Minister said. “It provides for loans for the promotion of employment, and contains more safeguards than the old provisions. If 5 per cent, of the ratepayers object to the raising of a loan without a poll then a poll must be taken. It is a useful proposal because it covers only the relief of unemployment. Where the Government gives subsidies it will give assistance to local bodies which are anxious to help the Government.” The proposal to permit certain power board loans to be raised without polls was also defended by Mr Nash, who said that in one poll of the type covered in the bill the cost had worked out at 10s a vote.

Dealing with the power to vary rates of interest on loans secured by Government Life Insurance policies, the Minister said that under the legislation last year the rate had been fixed at 5 per cent, for all loans granted after that date. It was proposed to put previous loans on the same basis, and if there were any further variations in the interest rate they would be uniform.

The extended powers given to the Reserve Bank were discussed, but only briefly, by Mr Nash, who said that some doubt had arisen whether the State Advances Corporation could be treated as a public body. It had been suggested that the amount of accommodation which could be given to the corporation was only up to 25 per cent of its revenue. The bill cleared up that position, so that the corporation could have Ks loans underwritten by the bank.

Lack of information of the Government’s financial proposals was criticised by the Rt. Hon. J. G. Coates (Nat., Kaipara), when discussing the clauses in the Finance Bill authorising the Government to borrow £13,000,000 for public works, housing, and main highways. The Government, said Mr Coates, had departed from traditional practice by not explaining exactly what its proposals involved. Mr Coates asked whether the borrowing authorities in the bill were in addition to the proposals the Government had already placed before the country. Information was also desired about how it was intended to raise the money. He should have thought‘the Government would have been frank and explained exactly how it was intended to spend the money. Not one word had been given of the rate of interest it was intended to pay.

Dealing with the clause empowering local bodies to raise money without a poll of the ratepayers, Mr Coates said he considered that the existing law should stand. He understood that the object of the provision was to assist the handling of the unemployment problem; but the country had been told that when the Labour party became the Government there would be no need for local authorities to contribute to the relief of unemployment. The Minister for Education (the (Hon. P. Fraser'' - By whom? Mr Coates: By the honourable Minister himself. Mr Fraser: Never.

Mr Coates; Well, by the Prime Minister, the Minister for Finance, and the rank and file of the Government. Mr Kyle’s Criticism

The acquiesence of some Government members in the proposal to borrow large sums of money as outlined in the Finance (No. 2) Bill was criticised by Mr H. S. S. Kyle (Nat., Riccarton), who claimed that several prominent members of the Labour Opposition in the House had formerly expressed their strong dislike of borrowing for financing the country. An amendment moved by Mr D. G. Sullivan when the original Reserve Bank BUI was before the House, deprecating any perpetuation of the old system of borrowing loans on interest, was quoted by Mr Kyle. Yet, he said, Mr Sullivan and the other fhembers of the party who had supported that amendment were now in a Government which proposed to borrow millions at some rate of interest to be determined by the Minister. The proposal in the Finance Bill to allow local bodies to raise loans without polls of ratepayers was criticised by Mr W. J. Broadfoot (Nat., Waitcmo). Borrowing of £13,000,000 Mr Broadfoot asked why the Government remained silent when the bill contained proposals for the borrowing of £13,000,000. The Prime Minister himself had publicly stated before the election that the country could not borrow its way to prosperity, .yet here the Government was proposing to borrow a large sum of money, and not one Government member was saying a word in opposition. The second reading debate ended at 11.20 with the reply by the Minister (Mr Nash). (Left sitting.)