A NATIONAL PROBLEM

Dominion, Volume 7, Issue 2218, 3 August 1914, Page 3

A NATIONAL PROBLEM

COST OF LIVING PREMIER INTERVIEWED TARIFF DIFFICULTIES i ! SOME TAXATION PROPOSALS Some aspects of tho cost of livinn problem .were interestingly discussed when a deputation from tho Labour Conference which recently considered the subject interviewed the Right Hon. W. F.. Massey (Prime Minister and Minister of Labour) on Saturday. Mr. A. H. Hindmarsh, M.P., introduced the deputation.

Mr. M. J. Reardon'- said that the Trades Council had recently considered tho problem of the cost ot living, and particularly they would urgo the Government to set up a Hoard or Social and Industrial Investigation to combat tho actions of rings and combines. They realised that the board must be composed of exports, men who would perhaps be diilicuit to find. The- board should not bo used as a refuge for needy politicians or anything of that' kind, .jho.y wouldj recommend that Customs duties be taken from the necessaries of ol life. ■ .

Mr. Massey: Can you mention any articles from which you think duty should be taken'(

; Roardon said the view they took or it was that the farming industry was helped by the Government in many ways, and that people here should be able to got farm produce retailed to tliem at the same , price as it was sold wholesale in London, This was not so iiow,'' and it was, in their opinion, unfair that people near the farms should have to pay more for farm produce than was paid by traders in London. They suggested that everything went to show that a ring controlled the- butter market. The.v would make a request, also, for the reduction of the duty on ilour, and a lessening of the duty oh tobacco.With regard to land taxation, tl;o committee proposed to ask the Government to do all that was possible to stop tho evil effects of trading' in land, and especially in Crown'leaseholds.' He wou.d like to see a more stable farming community established on the land in New Zealand.

_.Mr. Massey: Have you any 'suggestions to make P

Mr. Reardon detailed a scheme, which camo from Germany, to discourage frequent sales of land.-Shortly, it was that when land was sold, half the difference between the unimproved value and- tlm selling value, less tho actual improvements, should revert to the State.

Mr. J. Reid spoke of the necessity for Breaking-up rings and combines, and os pccially the Merchants' Association, by the competition' of the State. , Ho mentioned, also, the monopoly existing in the steamship services on our coasts. The committee also urged that children, especially in secondary schools, ought to be instructed in , tho elements of eco. nomics.

• •Mr. W. Madison urged that wages should be mado to rise'and fall automatically with the cost of living. Ho contended that at present, when wages were' increased in an industry, and especially in such-a monopolistic business as shipping, as now conducted on our coast, the cost .of services rendered to/the public was increased by an incomparably large amount. ' The Protected industries. ■ Mr. Arthur ( Withy put before the Prime Minister a resolution 'of the Wellington Main Branch of. tho United Labour Party that a plebiscite of the peoplo bo taken on tne question that the ordinary land tax bo increased by 2d. ill the pound, and that tho'amount of revenue so raised be taken off Oustonis duties on the necesisaries of life.' Mr. Massey: Will you mention some articles in common use by the workers from which you ask' to have tie duties removed?

Mr. )Vithy: As I stand up here the clothes I am wearing cost me at least £3 more because of the Customs taxes levied upon them. Mr. Massey: That is a definite statement. Do you suggest we should take Customs duties off all woollen' goods and allow them to come in free?- You make that suggestion ?

Mr. Withy: In tho clothing industry the-taxes levied are a burden on the people of - New Zealand which is £335,000 a. year more than all the wagos paid in all the clothing factories in New Zealand. He went on to say that in the clothing industry and in the boot and shoe industry the duties might be taken off, and a State bonus given to those now engaged in the industries. This would be a less burden on the community than a protective tariff. Mr. Massoy: Do you suggest we should give bonuses?

. Mr. Withy: Yes, I do. Mr. .Massey:. Where do you say we should get the money? . ' Mr. Withy: From taxing.land values. Mr. Massey (laughing): I see. • Mr. Vv'ithy spoke also of the somewhat similar state of things caused by the import duty on butter and'flour. He even urged that as Customs . taxes Were'a burden on the farmer, in that ho had to buy in a dear market and sell in a cheap one, the farmer would-not really be injured by the . substitution for Customs revenue of a like revenue from taxation "of true unimproved land value. • , • Mr. Massey > Is this deputation asking mo to remove all Customs duties? . Mr.' Withy: No. ' , . Mr. M'Laren: We ask you to make a beginning with the land tax.

Mr. Massey: Is Mr. M'Laren in favour of removing the duty on boots and shoes?.

Mr. M'Laren: Yes, T am. The duties ' now do not protect the men in the industry. Mr. Massey': Very well. I am' glad to havo that statement. The Plebiscite Proposal. Mr. D. M'Laren said that they seriously considered that this question of laud taxation as it affected the living of i the people was one which might fittingly bo referred to a plebiscite. Mr. Massey (smiling): Then, I take it, you are in favour'of a plebiscite on the Bible in schools? . Mr. M'Laren: No, I am not, because that is a matter-of religion, and should not bo settled by any majority. Ho was in favour, he said, of submitting any political question to a. plebiscite, but not a religious question. PRIME MINISTER IN REPLY. A PROPOSAL APPROVED.' The Prime Minister, in replying, said that he had listened with great interest to the various points raised. Ho' wanted to deal, not so much with' theso points as with tho summarised statement which the deputation had put in in reference to the report of tlm Cost of Living Commission. . He was inalined to favour the idea of setting up a Board of Industrial Investigation. As they knew, in tho last session of a Parliament there was a tremendous amount of work to bo done, but if aii opportunity offered, he would place this proposal either before his colleagues or before Parliament during tho present session. He thought something of the sort was necessary. It would be :i really good'thing if they had a board of experts to whom questions relating to

tho control of monopolies and tho cost of living might bo referred. < "A State Bonus." "As to tho removal of Customs duties," continued Mr. Masesy, "well, now. that is a tremendous subject-. I thmk ihat what the deputation has asked for is quite impracticable. If wo were to remove tho duties from boots and shoes and from woollen goods, fancy tho thousands ot people that would .bo thrown out of employment." ■ Mr. Withy. Not if you gave a State bonus. . Mr. Mnssey: Then you come back To getting the vast amount of money you require _ from tho land. I know my friend is something of a theorist: but you must see (addressing Mr. Withy) that if you are going to place such'a burden on the producer you are going to ruin the agricultural industry, and then tile bottom drops out of the country.

Mr. Withy: It would not bo a burden on tho producer. Tho producer does not produce the unimproved value. Mr. Massey: Mr. Withy says that the increased uuimproved value is duo to increased population and public works. Mr. Withy: Public works.

Mr. Massey said that public worki did in some cases increase tho value of land,, but in this country, at all events, the increase was due largely to the good • prices received for somo of our products. If tho price of butter dropped twopence a pound, the price of cheese one penny, a;id the price of wool threepenco a pound, land values would come down by thirty por oont. Mr. Withy: Who would it hurt? .The landowners. • ■ Mr. Massev: It would hurt every one of us. Producers' Burden. He could not agree with the proposal' that the ordinary land tax shouM bo increased by twopence in the pound. This would mean multiplying the land tax by three, and, so far as he was concerned, .lie did not see his way to do it. "I believe," he said, "in tlio principle that everybody . in tho community should contribute to me.«<enue of_ the country in proportion to his ability to pay. There is one exception to that—we, increase the graduated land tax occasionally for tho purpose of bringing about the subdivision of estates.

Mr. Paul: The man who lias to pay graduated land tax is generally able to pa.v.

My. Massev said that it wqs easy to suggest a very large increase in tho graduated tax, but' people who did so forgot that, tho amount of mortgages was not exempted. Where a landholder's property was mortgaged, tho tajf.was very severe upon him, They would bo surprised at some cases .which came under his notice of men supposed to be comparatively largo landowners, owning land to the value of £20,0(10 of £30,000, whose land was mortgaged to two-thirds of its. .value. .

"There is rather a good suggestion there," said Mr. Massey, referring to the _ summary, "about • the compulsory utilisation of land. We don't discriminate between the man who makes gootl use of hi i land and the man who does not, and I think we ought to 'discriminate. I am strongly of opinion that a man should not bo allowed to hold valuable land without using it until somebody comes along and offers to buy is from him at a. large profit." Mr,. M'Larcn; That justifies increment taxation. ,

Mr. Massey:.l am discriminating between tile man. who makes good use of his land and tho man who does not. ,

Mr. M'Laren: The deputation aslfi for tho adoption of increment taxation for the purpose Of reaching men who won't use their'land.

Mr. Massey: That is another story; I could not go so far as that. That is not a new suggestion. It was brought up somo time ago, and I think .it reached Parliament in the form of a Bill introduced by, or based on a suggestion of Sir Jolm Findlay.' If you are going to avoid land monopoly you must, to a certain extent, have freetrade in land. That is tho basis of the French system.

Mr. M'Laren: How are you going to check land gambling ? . Mr. Massey: We are checking it to some extent under the legislation of last year, but we don't want to check legitimate land transfers.

The suggestion with regard to education in economics, tho Prime Minister ■ remarked, was absolutely right. Small Holdings. . As to small holdings in the country districts for .workers, Mr. Massey continued, the lines suggested were those upon which ho was going. He had initiated a, system under which one apparently successful settlement had been established in South Canterbury. Each section contained live acres of land and a, comfortable house was built upon it. The worker was allowed to buy the property by weekly payments. Silimar settlements were being prepared at Masterton and at Fairlie and the Government was negotiating for another block in the North Island.- So far as lie was able judge this form of settlement was going to be successful. The suggestion with regard to additional regulations under the Sale of Food and Drugs Act was absolutely right. Municipal markets were a matter for'the municipalities. The . Government. was prepared to give them the necessary facilities by legislation if facilities were required... He was as anxious'to keep down the post of living as any man in New Zealand, but they had to remember that the trouble was not ■ only the cost of living, but the standard of living. He was not going to deal with this, point, because'he wanted to see the people have as milch of the good things of this life as it was possible for them to have. The Rent Problem. One factor which the deputation had omitted to mention was that of the increase of rents. It was almost impossible to deal with this when the country was prosperous, but the Government was dealing with it to a certain extent. During the present year it would spend not less than £100,000 in providing workers' homes at reasonable cost in tho different centres of population. .Probably .they would spend a good deal moro than £100,000. , Mr. Withy; Would you not get over tho difficulty in a much better way if there were no tax on corrugated iron, timber, and other things that enter into the building of a house? Mr. Massoy: Corrugated iron is not a very . important factor. Mr. Withy;:lt'tots up. Mr. Massey: Yes,,l know, but take tho timber industry, for instance. Suppos.o we abolished tho duty on timber

Mr. Withy: You would knock out timber land values, that is all. . Mr. Massey said that it was necessary to take the point of viow of tho people employed in the industry. The industry, ho was sure, could not exist with protection.' Mr. Withy submitted that a great saving would be effected if a State henus were'given'in place jf the duty. Mr. Massey: In theory, perhaps. I don't want to argue from a protective position, but when an important industry has been built up behind a protective tariff, you have to bo very careful how you interfere with it. • Mr. Withy: That is my reason for mentioning a State bonus. Flour and Butter,' Going on to speak of flour, butter, nutl _ other commodities, the Prime Minister said that the.comparison between the wholesale price of butter in London and the retail price hero was not a fair one. Twelve months ago butter was much too dear in Wellington. and there yero complaints ajl

round The scarcity was duo to tho 1 net that the country had over-export-C(l,-scarcely enough being left for local requirements, and tho position was taken advantage of by a number of ueople.

p'r. Withy: Why not take the tax

Air Massey: I would not object in .the slightest. I don't think it makes any difference.

Sir. Withy: It would- when you over-export. Massey: That doesn't happen once in twenty years. Regarding flour Mr Massey said that the position was rather serious. For years New Zeaand had exported wheat and flour, •hut as things wero now tending, he was afraid that in a few years the Dominion would have to import those commodities instead of exporting them. The quantity of wheat produced was becoming less, and tho final effect might be t-p increase the cost of living.

The Duty on Tobacco. Speaking personally, and not on behalf of the Government, Mr. Massey said that he was in favour of reducing the Customs duty on tobacco, and lie would go so far as to say that if it had not been for the trouble at the end of last year, tho duty on tobacco would have been reduced, and a corresponding amount placed on other articles subject to Customs duty which wero well able to bear it. "ram afraid," ho continued, "that we shall not be able to 'deal with the Customs tariff this year, but it wants revision, 'and I propose to take it in hand next year, when we come back." Mr. Keardon, in thanking the Prime Minister for receiving the deputation, said that he was sorry the free-trade-protection question had been raised. They considered that there were a hundred points iii connection with the cost of living problem which could be dealt with without -encroaching on . that question,. and knew very well that if free-trado-protection became involved tho Servian dispute" would be a mere side-issue. , Mr. Massey said that ho .q'uit-e admitted that the deputationists wero anxious to bring about a better state of affairs, but some of their suggestions were impracticable.