PARLIAMENT DEBATE ON BUDGET BEGINS

Press, Volume LXXXVII, Issue 26560, 24 October 1951, Page 8

PARLIAMENT DEBATE ON BUDGET BEGINS

Speeches By Mr Skinner And Mr Holyoake

(New Zealand Press Association)

WELLINGTON, October 23. The Budget was remarkable for its lack of new ideas, said the DeputyLeader of the Opposition (Mr C. F. Skinner), when he opened the Budget debate in the House of Representatives this evening. Mr Skinner was speaking in the absence of Mr Nash, who is confined to his bed with influenza. Many of Labour’s ideas, Mr Skinner added, had been retained and improved upon, but few ideas of the previous Government had been completely discarded. Tilings the National Party had bitterly opposed, such as social security, the guaranteed price for dairy produce, and cost of living subsidies were now staunchly advocated in the Budget. When was the National Party converted to these ideas? As recently as May, 1950, subsidies were described by the National Party as a pernicious evil, but a large part of this year’s Budget was being spent on them. Social security benefits, at £55,000,000, were £6.000,000 more than they were last year, and social services as a whole, including capital expenditure, were to cost £92,000,000 this year. Mr D. J. Eyre (Government, North Shore): Who instituted social security? Mr Skinner: The Labour Party in 1938. When the roar of protest from the Government benches died away, Mr Skinner said that the National Party had waged war on social security and had fought the 1938 election with a campaign against it. It had been said that the previous Minister of Finance was tßte greatest and cruellest tax-gatherer the country had ever seen, continued Mr Skinner. The greatest amount of taxation collected by Labour was £134,400,000, but the last Budget estimated taxation at £157.950.000. Rate of Death Duties Mr Skinner protested againgt the incidence of death duties, and said he knew of instances where death duties equalled nearly the whole productive capacity of an estate. It the Government persisted in such taxation, then it was a form of disinheritance. Part of the trouble was that land values had been based on the fictitious value of certain commodities. This year’s Budget provided for taxation totalling £186,000,000, or £95 16s a head—a record level of taxation. The Government was basing its taxation on the assumption that nigh prices for New Zealand’s exports would continue for ever—an assumption of which the Prime Minister (Mr Holland) himself had accused the Labour Government in 1949. The Government was now allowing current high prices io oe renecied in permanent charges, such as land valuer. The Government sat idly by encouraging further rises in land prices. Prices must fall, and then the Government would have to face the same problems of mortgage adjustment that Labour faced in 1935. Mr Skinner said that the Government had already predicted that wages and prices would increase in the New Year, and was now justifying higher subsidies, whereas it had once condemned them as pernicious. Was the Government for or against subsidies? The Government, he added, was doing nothing to encourage household deliveries. Less bread vat being delivered to homes to-day than ever before, yet the National Party in 1949 had likened New Zealand women to camels, which were the most objectionable of animals, as everyone who had bad anything to do with camels would agree. Building Costa Mr Skinner said that housing was the common need of all in the country to-day. and he pledged the Labour Party to do all it could to help to increase the number of houses available. The increasing of loans, he said, had not built any more houses. Rising coats in building were prohibitive for most home builders. The position was worse in some respects than it was during the war years. "The Government knew all the answers when it was the Opposition, but now it doesn’t seem to be able to do anything new—only continue what the previous Government had been doing,” said Mr Skinner. The Labour Government, he said, had laid the foundations to increase timber production. It was disturbing to find that the number of men employed in the building trade had fallen oft. and that there WM a steep rise in building costs. The administrative cost of government had risen from £5,900,000 under Labour, to £10,200,000 under the National Government last year, and it w*a estimated to cost £13,300,000 this Not on any count, he said, did the National .Government’s record compare WWurabiy with that of the previous Mr Helyeake’s Speech The Deputy Prime Minister (Mr K. J. Holyoake) said that Mr Skinner had asked 34 questions in his speech, and Ike Would answer as many as he could. The Government had not abandoned any of its ideals, said Mr Holyoake. < The guaranteed price had existed in •omeJWgn or other for 26 years before LrixMirtwne into nearer. It was true that the National Parly had opposed that factor in the guaranteed price which allowed the Labour Government to take full control over the farmers’ produce. .... 4 The National Party had never changed its fundamental outlook on social security—introduced in 1898 and liberalised by every Government after Seddon. In 1937-38 social security was liberalised more comprehensively than previously, but the Labour Party had set out to make doctors servants of the State, and on that score social security was opposed by the National Party in 1938. "Whoever thought we would live to see the day when the Deputy-Leader of the Opposition would advocate a reduction in death duties?" said Mr Holyoake. “Why, the rates were fixed by the Labour Government” Mr Skinner: What are you going to do about them? Mr, Holyoake: We hope in the fullness of time to reduce them. Mr Holyoake said there was someSnew in the Budget—the Governwas carrying out every financial promise it made to the people inside two months of the election. (Opposition laughter.) Expected Surpluses It would be realised after Mr Skinner’s speech why Socialism had gone down in ruins. AU the prophecies of the Labour Party had been proved incorrect. The only chaos that existed was in the minds of members of the Labour Party, and the only slump there was was in the stocks of the Labour Party. Had the Government continued the creation of credit at the rate followed by Labour, the country would be in chaos to-day, and living costs would have been immeasurably higher. The national finances had. however, been so improved that this year’s Budget would yield a surplus of £6,000,UM, with another £6,000.000 surplus in the Social Security Account. - The Government was not a “cut and slash” Government. Votes for social security, education, defence, and many other purposes were higher this year. It' was hoped that the tax reductions already introduced would be only a beginn'ng. and that further substantial tax cuts would be possible next year. Mr Holyoake said that taxation took . , ce P t : the national income in 1949. bjit in the last financial year the percentage fell under a National , Government to 27.3. It would be very much lower this year. The Government’s earlier prediction living anta could be kept stable

had been on the assumption of peace, but to-day the world w.as in a state of near war and rearmament was forcing up prices throughout the world. Last year defence expenditure for five countries was as follows: New Zealand, £15,000,000; Australia, £66,000,000; Canada, £300,000,000: the United Kingdom. £1,600,000,000; the United States, £17,600,000,000 (all expressed in New Zealand pounds). Thus these five countries spent about £20,000,000,000 on defence last year. This year New Zealand would spend £25,000,000, Australia £106,000,000, and the United States £21,000,000,000. The percentages of ■the national income devoted to defence last year were: New Zealand, 3.5; Australia, 3.7; Canada, 6.6; the United Kingdom, 15J; the United States, 22.6. According to the most reliable reports Russia was spending about 30 per cent, of her income on defence. Mr Holyoake said that Mr Skinner had offered no suggestion for dealing with the present difficult war situation. Would Labour cut the votes for defence, works, social security, education? Would they tax more heavily, or cut waxes? Would they issue more Reserve Bank credit? This Government had reduced Reserve Bank credit, but had also provided for greater imports to provide goods against the available money supply. Spending on Subsidies Subsidies were being maintained to keep living costs down. Subsidies during the financial year 1951-52 would include the following: wool, £3,300,000; butter at Is OJd per lb, £3 000,000; eggs, £335,000; milk, at 3d a quart, £2.300.000; gas, £600,000; tallow, £230.000; wheat, £3,500,000. These items, with some smaller ones, accounted for the total of £15,500,000 to be voted for subsidies this year—subsidies which at their present rate would cost £18.000,000 in a full year. Goods were now plentiful, but the few things which showed a decrease since this Government took office included the number of public servants and the number of Labour members of Parliament. There had been a drop of only a few hundred in the number of public servants. Mr Holyoake said that the Labour Party was worried because the National Government had achieved something in its dealing with the strike, and had done what the Labour Party promised so often but failed abjectly to do. The Labour Government gave the people strong words but weak action. “We can get nowhere in politics or in industry or anything else without team work,” continued Mr Holyoake. “Teamwork between the Government and the people is most desirable and necessary, but there has been class warfare, class struggle, and class h- tred preached by the apostles of Socialism for a generation. It will take years to eliminate. It can be done, and it must ba done if the country is to resume its rightful place in the sun.”