PARLIAMENT

Dominion, Volume 10, Issue 3184, 7 September 1917, Page 6

PARLIAMENT

WAR NECESSITIES

FINANCE BILL PASSED MINISTER DEALS ft'ITH LABOUR CRITICS The Legislative Council mot at 2.30 p.m. yesterday. The Statutes Revision Committee reported that it had considered the River Boards Amendment Bill, and recommended that it should proceed with certain amendments. SIB FRANCIS BELL said that the Bill would bo uminitted on the following day. REVOCATION OF NATURALISATION.

SIR FRANCIS BELL moved the second rending of tho Revocation of Naturalisation Bill. He explained that the Bill gave the Governor-in-Uouneil power to cancel the naturalisation of persons naturalised iu JJen' Zealand in cases where this course seemed desirable.

Sir William Hall-Jones, Hon. R. Moore, and Hon. J. Ban- supported tho Bill, which was read a second time, and set down for committal.on next sitting day. The Council adjourned at 2.45 p.m. until to-day.

THE HOUSE

The House of Representatives met at 2.30 p.m. KAIAPOI HARBOUR. The Hon. D. BUDDO (Kaiapoi) moved the second reading: of the Wainiakariri Harbour District and Empowering Amendment Bill, which proposes to excluuc tile town of Rangiora from the Waimakariri Harbour rating area. Hβ said that the Local Bills Committeo had secured the inclusion of Rangiora in the 1916 session, but this decision/was not fair to tho local people. The town of Kaiapoi wanted to develop its harbour, but would have no chance of getting authority for the necessary loan as long as the neighbouring town of Rangiora was an unwilling part of the rating area. Rangiora did not want to come in >>nd Kaiapoi did not wish to be handicapped by having Rangiora in. Mr. G. FORBES (Huninui) said that freezing works had been established at Kaiapoi, and the development of the harbour was in the interests of .the district. The Local Bills Committee lad killed the scheme by including Rangiora against the will of the local people. The PRIME MINISTER supported the Bill. He said that a very useful harbour could be established at Kaiapoi, and he thought tho local people should be allowed to make their effort without the inclusion of Rangiora. Tho Bill was read a second time.

WELLINGTON TRADING DEPARTMENTS. Mr. R. A. WRIGHT (Wellington Suburbs) moved tho second reading ti the Wellington City Trading Departments Reserve and Renewal Funds Bill. Hβ said that the Wellington City Council desired to place its trading departments on a sound footing by creating reserve and renewal funds. Provision had been made for the appointment of commissioners and the proper investment of tho funds. The Bill was read , a second time without debate.

TUP ■ IKb ['INANLfI HILL THIRD READING DEBATE SUCCESS'OF THE WAR LOAN. SrR JOSEPH WAED said ( that he wished to state, for the information of the public, as well as of the House, -that he proposed to hold over the I'inance Bill for a fow days after it had passed through the Legislative Council, in order that a review of certain points might be made carefully. If alterations were deemed necessary they would lio made without affecting in any way tho principles underlying the Bill. A strong &p----peal for the abandonment, of the tea duty had bcien made by some members, who" thought that the Bill was increasing the cost of living. The House should understand that he had been required to regard the Bill as n wholo from tho i>oint of view of ' national finance. The concessions that had been asked by various people and interests after tho introduction of his preijosnle had represented a total sum of .£1,840,000, and it had been absolutely impossible to entertain any proposals.jor reducing tho revenue. The scheme of taxation was framed for war purposes/ The require-" ments of the Government were abnormal. The prevailing conditions wore :il>normal, and could not be altered by the Ministry or the Parliament. New Zealand had to continue providing funds for war purposes for a period that could not yet be determined, and the Government had to be absolutely sure of its ground. It could not place itself in a position of financial .uncertainty.

War Necessities, He fully realised that some of the proposals made in 1 the Bill would not be made, and would not be required in normal times. Members who were disposed to criticise the proposals should remember that the conditions, were without precedent. Reference had been made to the excess profits, lax. It i?ould have been impossible to add a profits tax to the taxes proposed in the Bill. It was true that Australia had a proats tax, but wide exemptions were cade. If New Zealand had a. profits tax with similar exemptions, the tax would not produce the revenue required by the Government. Tlio basis of the financial structure created by the Bill was found in the land tax and the income tax, which had been fixed at such a level as to inako certain that the Government would bo provided with the whole of the revenue required. If a profits tax were added, it would be necessary to reduce the land tax, make an alteration with regard to the non-exemp-tion' of mortgages, and reduce tho incoi.'.e tax. The people who would pay the profits tax would be to a very large extent the same people who would pay the taxes proposed in tho Bill, and it obviously was not feasible to add tax In lax indefinitely. There was a limit to what people could pay.

A Strong Position. The Government did not knoir when the war would end. If the war continued into another financial year the Government would lie compelled to provide for further financial obligations, and nobody could ■ say what those obligations would be. The' Dominion's finances in the meantime had bcpii maintained in a position of srreat solidity. The people had faced a' Herculean task in providing an enormous euni of loan money. They had risen to the needs of the situation. It would have been pleasant to have been able to avoid placinir extra burdens .m them by way of taxation. But the revenue hnd to be raised, and some of the important concessions. the Government bad made, including the increase in pensions, had been made possible by the increased taxation in other directions. The Government would not indiilze in much sentimenlalism over this matter. J he I "WRi* necessities wpre Tinrnivount. iTc I)"lieved that New Zealand finaiiwlly «(■« on the stroneesl basis of any country associated with Hie Allies in this war. Tt mw nwossarv Ibnf position should 1)D maintained. The Dominion hnd a commrntivo'v small populiti. n, it was far distant from rlio world's markets, ai"! ; t in,! more dependent than any other country upon the continuance of shipping services. II: ivomld fee! very j qnicVly the financial (liflirMilHes that. I would'arise if any prolonged >nterruntion in Hie shippimr services was brought about by causes beyo'nd its control, .Mid possibly beyond the' control of the Tmrrorinl Government. Tt wa.- e?sentipl f r r this re-ison Hint *Few ipaU'tf should have money in hand, and should be in -i poeitioni to fo.ee without dismay the dis-

appearance of the anticipated surplus. Ho believed that the surplus at the close of the present n'naiici.il year would be a large one, and he hoped that would bo 60. Tho money would be required at tho close of the war. Local Loans Necessary, Sir •Toseph Ward added that ho wished lo make- a reference to tho War Loan. Members knew already Hint the Joan had been a very great success. Tho country had shown Unit it would :espond well to an internal loan. There was a Icseon to be learned from this fact. Iu all human probability when the war was over the Dominion would adopt to a large extent ft policy of raising locally its loans. He believed that for Pome time after the war the Dominion would be bound to raise within its own borders a large proportion of the money that would be required for the internal development of the country. The expenditure of money on works of development probibly would be more necessary than ever. Employment would be required for large bodies of returned soldiers, and provision for suitable works had been mado in the Bill. The Minister added that lie had not been able yet to have n comnleto classification made of tho subscriptions to the War Loan. But he could say chat lie had been surprised to find what a very largo number of yieople had mhscribed sunns of from .£IOO to Ihe wide distribution of the npplica tions was a very (.'ratifying feature of (he loan. The people of small mews had done very well indeed. T n conclusion, he <hanKe<l the House for its assistance in connection with the Bill.

National Government and Cost of Living. Mr J. T. M. HORNSBY' (Wairarapa) 6poke again of the tea tax. He was not concerned so much about the amount of the tax, but about, tho principle. One of the reasons why he had declared for the National Government was that tho first clause of the covenant entered into by the parties was that an effort would be made to keep down the cost of living. That covenant tad been broken, and lie could no longer allow himself to be considered a supporter, of the National Government because of this. He would help the Government in everything pertaining to the war, but in other matters ho would not consider himself a supporter of the Government. The Government had played with the question of the cost of living in this country, and the people had good reason for their bitter complaints. The Board of Trade was a farce. He said that the Government could get the money required for increased pensions by taxing motor-cars or other luxuries, leaving such necessities as tea alone. Hβ suggested that the Government should appoint a food controller. Hβ had taken the etop of withdrawing his support from the National Government with a good deal of regret. Mr. E. P. HUDSON (Motueka) said he had opposed the tea tax, but he had voted with the Government because ho considered that he was to a considerable extent bound to support the National Government. He agreed that the Government might with advantage appoint a food controller. With the present schemes for keeping down prices there were such long delays that very little good could be done. Mr. W. H. FIELD (Otaki) said he also favoured the appointment of a food controller. War profits were being made out of people's food, and the largest profiteers would escape any very heavy tnxation under the Bill. He thought more taxation might have been imposed on motor-cars and other luxuries coming into New Zealand from foreign countries. He considered that tho Bill had been rushed through with undue haste. He took special exception to the heavy taxation of farmers whose land was heavily encumbered. Somo of the men would be unable to fiud tho money, and ho would urre the Minister to put a clause in tho Bill allowing time to pay in certain CfI MR, F. MANDER (Mnrsdon) said that he did not see how it would be possible to reduce the cost of living while the Cost of production of commodities was allowed to Tise. While everybody was clamouring for higher wages mid war bonuses tho cost of production must rise, and he did not think anything would keep down tho price to the consumer so Ion? as this state of affairs existed. But ho did not think the Government had been consistent in putting the tax on tea. The Government had said it would keen down tho cost of living. In this the Government had not been successful, but the most illogical thing it had done was to impose these Customs duties on tea and othor articles in general use. MR. R. A. WRTGHT (Suburbs) said ho thought tho Government had mado a mistako in imposing a tax on tea, a tax which would have the effect of increasing tho cost of living. But he acquitted the Minister and the Government of any sinister intent in putting on this tax. It was a fact, however, that the New Zealand peoplo drank too much tea, and he believed that one of the mast general causes of rheumatism was the excessive coi='inratinn of tea. MR. J. M'COMBS (LyttoHnnUaid that the increase in the cost of living had bpon greater for the working man than for tho nverage of other citizens.

Something Done. Mr H. Or. ELL (Christchureh South) spoko of the cost of living question, saying that a preat deal had been done in New Zealand to keep down tho cost of living. Articles of food which paid heavy duty in England, notably sugar and dried fruits, were absolutely fiee of duty in New Zealand. And if the Government had allowed tho products of our country, such as meat, cheese, and butter, to rise to the famine prices rutin* in Europe,. the people wouM hove hail to pay a great deal more for these products than they had been required to pay. He would have liked to see the Government do more; for instance, he would have liked to see the Government requisition all produce at the beginning of the wac at pre-.war rates. All the difference m price would have cnine in profits to the State, and it would have gone far to nay the cost of tho war. Hβ realised, however, that there might have been difficulties about the finalising of such lni"e purchases. He referred, aiso, to his favourite topic—the slow work in the construction of tho new Parliament Buildings-declaring that if tuese biiildin"s were finished a biz sum annually would be saved to the State in rent of promises fnv offices for Denartments'. Mr. A. H. HINDMARSH (Wellington) South) had a joke at Mr. Ell's expense about the slowness of the Government in filling the vacant seat in the Cabinet.. He accused Mr. Ell of making "a direct bid" for the vacancy, and begged the Government to end his suspense. The House renlly ought to be spared "these humiliating appeals." .Ho said Iliat there were a number of members on the Reform side of the House who were utterly opposed to n reasonable taxation of !nii<l. They had pressed the Government to eive'wny on the question of taxation of mortgmred interests. Won. members: Tmir side >.ir«ri"l that. Mr. Hindmnrsh: "Oh, I'm no side. J'm bv myself!" He went on to accuse the Liberal Ministers of the Government of hnvin? failed to maintain their Liberal principles. Ho wns by turns aliusive iind sympathetic in his references to tho Minister of Agriculture—abusive, of the Minister to the oxtont of accusing him of lack of courage in consenting lo remain a. member of the Government after having been thwarted in certain of !i-s endeavours, mid sympathetic towards him because he had been thwarted.

charges Refuted. The HON. W. D. S. MAODONALD replied to asporsioiw upon his political integrity and steadfastness. He said that ho had been President of tlm Board of Trade in the absence of the frimo Minister, but Mr. Massey was by statute law president of tlmt board. He had held ii lot of portfolios in the absence, of Mr. Massey and Sir .Toseph AYard— fourteen in all—and he was prtad to bo relieved of some of them. He wns n'ot .mi office-seeker. He had been selected as a member of the National Government by his chief for reasons known to his chief, and ho si ill held flic portfolios then entrusted to him. And in the administration of those Departments ho had not been thrust aside or interfered with in any way. lie referred to the charge made ORiiinst the Prime Minister that he had extracted the last farthing from the Imperial authorities for our produce. ' This statement, so often reiterated, was not correct. If the market w;is open, even with the shiiipiiiß >:hortnrro as serious n.s it was, speculators would 'have- been willing to buy onr wholo

I output at a higher prico than wo were ■now receiving. On Profiteering. Tho PRIME MTNIBTEB said that agood deal of unjust criticsm had been directed at tho Board of Trade. The members of that board were earnest, hard-working men, who hiul done their beet in connection with tho duties entrusted to them. Jlr. Hornsby had talked of profiteering. That member was on tho Cost of Living Committee, and if he know of any profiteers he would call them beforo tho committee and have them examined on oath. Mr. Hornsby: We are calling them. A member: Have you got that s'hiiling-α-pound butter yet? Mr. Massey: "It has not, yet reached me." It was a popular thing to talk about the cost of living at tho present time. If any member of the House could make any suggestion to tho Board of Trade regarding the makiug of exorbitant profits by any persons, and if proof could be brought forward, he would sot the law in motion.

Br. Thncker: What about the prico of meat in Wellington?"

Mr. Massey: "I have offered to provido meat for Wellington at the Imperial prices, and that offer still holds good. It has not been accepted by the people concerned.. I am told that meat is cheaper in Wellington than in other centres." A great deal had been said about the tea tax. The charge was very small, and he did not believe the people objected to pay it. The tea tax would bring in only about one-third of the money required for the addition to be made to the old-age pensions. AVith regard to the purchasing pow.er of the sovereign, he had asked for information from the Government Statistician, who told him that us far as foodstuffs were concerned the nrticics that would have cost 20s. in .Tune, 19M, would cost 235. 73d. to-day. It was generally recognised that the cost of clothing was beyond the control of the Government, since tlie ■prices were dependent on outside influences. Tt was rot a fact that the Dominion bad got an increased sum of money for a reduced amount of wool. The fact wns that, although the amount of wool exportNl during the present season, had been less th'nn last season, the growers had been paid for wool not yet shipped. He believed that practically the whole of the old wool would be got away before the new season's wool began to arrive. He mi?lit mention in that connection that within a dny or-two' tlm first Nph , Zealnnd-eontrolled ship, loaded to the hatches -nth produce, would lo.i"e one of the ports of the Dominion. Tho shin would be followed shortly by another controlled vessel. These steamers were not owned by the Government. They had not been boniht/but they were controlled bv thp Government, which had secured them for thp benefit of thp prodncers' and people of Npv; Zealand.

Maintain Export. - In conclusion Mr. Massey eaid that the enormous loan just raised and tho enormous tuxes proposed in the Budget must have bronijTit home to every person in the country the extreme seriousness of tho position in which the Dominion was nlnced. Fortunately the country had been able to keen up its output' of produce in a wonderful manner. There hml V»n difficulties «-itli regard to shipm'ng, but Inst year New Zenlnnd had been nblp to s<"id aww nroduce worth not less thnn .f.30,000.000. Even when the prevailing high prices were taken into consideration that wns a great record. Tf the war was going to continue for niy length of time—rind -nobody could tell how long it would' continue—the Dominion, if it was to meet the very heavy war ch.irges, must Veen its exports at least at the thirty million level. A Call to Women. "We havo in this country compulsory military service," ndded Mr. Mnssey. "I am afraid that compulsory industrial service would not work well. I believe that if industrial service is to be satisfactory it must be voluntary. We shall require nil the industry, energy, and enterprise of which our people r.re capable in order to meet ouv liabilities "id keep our wiyr' expenditure going. The women in England have done marvellous work. The conditions in this country are not parallel, find I do not suggest that women can do the same thing here. I know they cannot. But I think it quite likely that during the coming season, if wo have a good harvest, as T believe we will, we shnll have to call upon the women for assistance. If we do call upon fhem, I belipve they will do the right thing and -insist vs to the very best of their abilities." "Let's Get on With the Bill." Mr. P. C. WEBB (Grey) followed _up his old complaint against .the Prime Minister that hie only care was for the producers and his only endeavour ro keep up the prices of products, regardless of Hie welfare of consumers. Sir Joseph Ward: AVhy are you alwaye trying to get up the price of coal ? Mr. Webb: "Tarn always opposed to the private ownership of conl-inines, which puts the price up and keeps it up on every possible occasion." After about ton 'minutes of talk about other topics not at all connected with tho business before the House. Sir Joseph Ward remonstrated: Now, lot's get on with the Bill! MINISTER IN REPLY vigorous rasawr to labour CRITICS. SIR JOSEPH AVAR-D (Minister of Finance) replied at 10.15. He devoted the first part of his speech to answering the attacks mado on the Bill by Labour members and some others. Honourable members who were accusing the Government and himself of lack of thought for the interests of workers, he said, showed a lamentable lack of responsibility. (Hear, hear.) Some of them had no idea of what money meant ia largo sums. Did they know what a quarter of a million for pensions in addition to var expenditure meant? It was all very well to talk of putting the burden on to motor-cars, or spirits, instead of tea, in order to get the revenue. But thu result of the taxes advocated would bo not increase of revenue but loss of revenue. To put more duty on these things would stop importation. He was not concerned ataiit their coming in. Probably tho people would not suffer if they dul not come in, but he was interested because if these importations ceased he would lose revenue. The burden-being put on tlie taxpayers was esiornious, and he was gfiul to say that it was being accepted readily and with the nearest magnanimity. And, speaking of motorears out of 12.380 motor-cars thero were only 148G that might be classed ae pleasure cars. .The average landed cost of these cars was only 41157, and the average cost of these pleasure cars was only a little over .£2OO. Out of motor cars wo received .£148,000 of duty, which we needed very badly. The duty was 20 per cent on all cars not coming from the Mother Country, but if the duty was made JO per cent, for foreign, mado cara, and 20 per cent, for British cars, the result would be that we would stop importations and we would get less revenue, in consequence. In times of crisis some people talked as if they didn't care whether they burst everything up. They were very "skittish" about voting for a threepenny tax on a commodity used by everybody, workers ns well as other people. -These honourable members were appealing unworthily to a certain class of people, attempting all the time to show what they would do if thov were iu power. God help tme country if they ever did get into power. (Applause- and hear, hear.) They were showing that they were absolutely incapable of holding any responsibility. They did not realise that this wns a time in which everyone should havo care aljout the finances.

A Time of Stress. < Tho time was one of extraordinary financial stress, and yet these honourable members were manoeuvring to put others in a wrong position in order to gain a political advantage, perhaps, a year or two years hence. II r. Bonar Law had had to confess that his amusements tax had fallen two millions below the estimate, because the result of the tax had been to close down 600 of the theatres from which reveinio should have been drawn. So he had to readjust his amusements tax. The comparison between the profits tax in New Zealand and in England Has grossly unfair. There were no war profits here comparablo with those in England. And theso honourable members did not seem to understand what a profit was. Was jt to bo supposed thab people would go

on -working, go on employing other people, and gu ou doing it all for nothing? In reply to the- other honourable members who had been asking for concessipns, lie pointed out that a number of concessions had already been granted to taxpayers of certain classes. Kegarding exemptions to company shareholders, he said thnt lie recognised that his proposal to exempt up to .A'-100 of inenmu instead of A'3oo was not a scientific method of solving tlio problem presented, but he asked the House to believe that it was exceedingly difficult in this country to maintain the revenue and give any scientific concessions. If the concessions asksd for were, granted, the country could lose a million a ynar ia revenue. ILo repudiated tho .charge that ho had rrnulu any threat, over! or covert, that if the tea tax were r.ot agre-pd to there would be no increase in pensions. Ono of tho chief reasous for tho tea tax was that persons who were total abstainers ought to be asked to pay eoino contribution towards tlie cost of the war. In England a Freetrade Govornment had found it necessary to put a shilling in tho pound duty on tea, and if the war went on for long New Zealand might liavo to put on perhaps as high a tax, and also a lax on sirair. Why worn these duties imposed, in Bugland? Because they provided the revenue with less financial disturbance than any other taxes, bpciiuso they were lnviod upoiiNi.ll the people. Revenue could be obtained from Customs duties only by taxing articles that everybody used. Tf the war went on longer there would love to be more revenue provided in New Zealand; and tho only alternative to Customs taxes on these commodities would be a poll-tax, to which lie was averse. The .general demand seemed to he to move the taxation and "put it on the ofner fellow." Tt was his business to seo that the other fellow did not get too much of it. (Hear, hpnr.) Last of all, Sir Joseph TVard referred to a point raised by the member for Waikato rettardinp possible evasion of income tax by those companies exporting frozen mpat, who made most or oil of their profits in England out of "nominated" meat. Ho had promised to investigate the point, and he would see that it was done, Thp Bill was read a third time and pn.=sod. Tlie House rose at 11.5 p.m.