Mr Kirk Says Budget Favours Money-Lenders

Press, Volume CIII, Issue 30487, 8 July 1964, Page 3

Mr Kirk Says Budget Favours Money-Lenders

(From Our Parliamentary Reporter)

WELLINGTON, July 7.

The Budget demonstrated the fact that the National Government was following its party’s policy of redistributing the country’s wealth in favour of the money-lender and at the expense of the producer, said Mr N. E. Kirk (Opp., Lyttelton) in Parliament tonight.

The House had presented an astonishing scene on the night the Leader of the Opposition opened the Budget debate, he continued.

No-one could have imagined the childish and petulant performance of the Prime Minister (Mr Holyoake) as he tried to get his points together.

“He would have put ‘Steptoe and Son' to shame,” Mr Kirk said. He referred also to the absence of the Minister of Finance (Mr Lake). Surely the opening of the Budget debate was important enough to justify his presence in the House. Instead, he was in Christchurch, opening the Service Lifeline. “When I heard the comment of electors in my electorate during the weekend,” Mr Kirk said, “I could certainly agree as to his need to be near a lifeline.”

In 1960, Mr Lake had described Labour as a great spender of other people’s money. “In the event,” Mr Kirk said, “he is the greediest tax-gatherer in this country’s history—but he has also contrived to supplement his gains by overseas borrowing.” The present Budget, Mr Kirk said, was the seventh of the National Government which did not balance, and yet Mr Lake seemed to be so proud of it Dividend Tax "Under this system, the Government apparently thinks people can be soothed into thinking ‘the more we owe, the more solvent we are,’” Mr Kirk said. On the retention tax, he said, Mr Lake had been somewhat inconsistent. Some years ago. speaking in Fendalton on the retention tax, he had said: “If I had my way, dividend taxation would be abolished.” “He has now brought in four Budgets,” Mr Kirk said,

“but he has not reduced the dividend tax. In fact, he has extended it.”

Mr Kirk charged that the Budget opened on a dishonest note. By combining a reference to increased export earnings with a reference to the National Government’s incentive policy, it had implied

that the one had been brought about by the other. This was far from the truth, as had been pointed out by the Chamber of Commerce Review.

The latest figures for factory production showed that the rate of increase in the volume of output had not yet caught up with the rate of increase in the last year of the Labour administration, said Mr Kirk. The increase in 1960-61 was 9.8 per cent, In 1962-63 it was only 3.5 per cent.

“Any proposal for an increase in the rate of development incurs a cold glare over there,” he said, indicating the Government benches. “If we look at other nations we can see just how badly we are doing.” Last year’s increase in income in West Germany was 5.3 per cent, said Mr Kirk, 5.5 per cent in Japan, 4.5 per cent in Italy and 1.7 per cent in New Zealand.

“The inadequacy of this growth rate could well result in problems for our young people.” In 1975, Japan was expected to have a standard of living equal to that of New Zealand’s. In 1980, it would be higher than our standard of living then. “At the same time, the Government is rationing imports more stringently than ever,” he said. The effective wage rate is the lowest since 1955. The weekly wage rates for adult males were shown in the index for the effective rate, all groups, as 1000 in the 1955 base year. In Feburary, the provisional estimate for the current year was 994 on the index, said Mr Kirk.

Public companies had recorded in the last year a 17.1 per cent increase in taxpaid profit and 72 per cent of the receivers of the dividends formed 1.8 per cent of the total population. In claiming greater earnings by wage and salaryearners, the Government was forgetting the larger labour force, longer overtime and the decline in the effective wage rate. “While other countries are making substantial advances,

we in New Zealand are standing still. Why can’t we have an enlightened wage policy treating workers as a valued and important part of the economy? “Because of our growth rate, we are not only unable to finance required Imports but to finance an enlightened wage policy. The Budget has done nothing to alter the basic position of the New Zealand wage and salaryearner.” “No Reserves” When the Government took over . there was £18,021,000 on investments and reserves in the Social Security Fund. This year there were no reserves at all, said Mr Kirk. “The Budget has paid a mean and cruel trick on Social Security beneficiaries,” he said. There was an implication in the Budget about them, but there was no provision in the estimates, in the Budget to do anything, nor any reserves to carry it out. If the age . beneficiaries' share were the same as the increase in public companies’ profits they would have had an extra £1 2s 3d a week for every £5. “Borrowing Saving” The Government’s policy was to free the economy, to keep down costs of production and the cost of living, especially for people on, fixed incomes, said Mr H. E. L. Pickering (Govt., Rangiora). The Labour Party had, in the past, adopted import control, price’ control, and a controlled economy. The Opposition had protested at Government borrowing.

“Borrowings are also savings,” said Mr' Pickering. “Current consumption is postponed and people invest their money in the progress of the community. When people give up their money to invest in sound enterprise it is a good thing. There is nothing wrong with borrowing for investment for sound, productive purposes.” Mr C. J. Moyle (Opp., Manukau) questioned the need for internal sales promotion expenditure to be tax deductible. It seemed illogical for the Government to be urging restraint in consumer spending and yet to be paying, through tax deduction, for sales promotion. The imposition of some form of tax on such expenditure “would have the effect of channelling wasteful and unproductive money into productive channels,’” he said. Incentives

Lower interest rates would mean lower savings and lower savings would mean higher taxation, said Mr J. H. George (Govt., Otago Central).

Mr George denied Opposition claims that the Budget offered nothing to workers. “Incentives to farmers and manufacturers must mean something to workers. The farmer is, in fact, the last person to benefit from Budget incentives,” he said. . “The farmer has to ' increase his production so he has to spend money first.” In doing so, others received the benefits tractor - drivers, other workers, suppliers of goods and services. Mr R, Macdonald (Opp., Grey Lynn) said the amount to be spent on defence was too heavy.

“Some- people would have had us at war with the Indonesians some time ago,” he said. “The Prime Minister kept out of it, and I give him credit for that Some Auckland critics would have had us in long ago.”

The Government was in urgent need of a housing programme. It was not building a house for the pensioners. The only pensioner accommodation being- built was by councils, under Government subsidy.