PARLIAMENT IN SESSION

Dominion, Volume 19, Issue 257, 14 July 1926, Page 10

PARLIAMENT IN SESSION

the financial debate PUBLIC WORKS BORROWING MR NOSWORTHY DEALS WITH LABOUR CRITICISM The commencement of the Financial Debate was the principal business before the House of Representatives yesterday, It was opened in the evening by the Leader of the Opposition (Mr. H. E. Holland), who was replied to by the Postmaster-General (Hon. W. Nosworthy). Speaking before crowded galleries, Mr. Nosworthy dealt trenchantly with the Labour Party's criticism, and in the course of his remarks made an important reference to the Dominion’s future policy in regard to borrowing for public works. The Postmaster-General’s opinion was that when the big undertakings now under way are completed the time will be opportune for a curtailment of borrowing. The House rose at 9.15 p.m., the adjournment of the debate being moved by the Leader of the Nationalist Party (Mr. G. W. Forbes).

The debate was commenced by the Leader of the Opposition (Mr. H. E. Holland), who adversely criticised the Government’s taxation policy. He said

the burden of running the coun- I try should rest j on the shoulders i of those best able] to bear it. Pri-1 vate wealth had | accumulated enor-'j mously since the! war, and it was from this that! most of the re-1 venne should!

come. Referring to the public

debt, Mr. Holland said the Government alleged that it would be paid off in 60 years’ time, but it had actually increased by £11,000,000 this year. The Budget’ l showed that £2,333,780 had been p;.id in debt redemption, but as against this an additional £13,374,549 in debts had been incurred. Mr. Holland condemned the principle introduced by the Reform Government of allowing certain loans to be tree of income tax. Dealing with the budget, Mr Holland said it was obvious the Government were making no effort to balance the ledger, and characterised Cabinet as “an amazing company of bankrupt Micawbers faced with an avalanche of debts falling due,” and having nothing better to cope with the situation than a collection of 1.0.U.’5. One Item of the Government’s policy he heartily approved of, and that was the death duties’ stock redemption. Speaking of the soldier settlements, Mr. Holland emphasised that the Budget showed that soldier lands had been written down in the rough by £2,500,000, and nobody objected to that relief being given to the soldiers after what they had done for the Dominion. The whole operation in connection with the purchase of land for soldier settlements represented, he said, a free gift to wealthy land owners. He asserted that very poor land had been acquired at a fictitious value for the soldiers, who had then tfeen put on it at an enhanced price, rendering it impossible for them to make good. The financial proposals of the Bank of New Zealand regarding the assistance of the farmers were long overdue, and were probably intended to block the report of the Rural Credits Commission, now about due. He asked whether the Government would place that report on the table this session? Mr. Holland urged that the coal, timber, leather, boot, and woollen industries were languishing in the Dominion because of the importation of those items from overseas. Dealing, with motor vehicles, Mr. Holland said that over six million pounds’ worth had been imported last year, and as the greatest part of the motor-cars, lorries, etc., were a necessity he would be inclined to admit them duty free. i\ member: Do not the wealthy use them? " Mr. Holland said not altogether, and in any case any loss of Customs duty in that respect could be made up by increasing the income tax of the wealthy motorist. Mr. Holland said that the Government’s policy in general was open to very adverse criticism, and would receive it from the Opposition from time to time. The Leader (of the Opposition declined an invitation to have his time extended, and after dealing with the wheat shortage question resumed his seat amid applause. “The Thin Red Line.” The Hon. W. Nosworthy (Postmas-ter-General) , who followed, congratulated the Leader of the Opposition on the manner in which he had skipped over many of the salient features of the Budget. The country had , endorsed the policy of the new Government with no uncertain voice. the member hmself now headed only a •‘thin red line.” The result of the

£6,000,000 loan had also indcated the fine feeling entertained by the London financial world towards the present Government. The Leader of th e Opposition, said the Minister, had had a great deal to say about borrowing, but what borrow-

ing the Government had done had been justified. "Let me ask him,” proceeded Mr. Nosworthy, “how much the Labour Party’s borrowing would increase the debt of this conn try if they got the opportunity. First of all there would be State shipping, the farms would be State-owned, and the land would be purchased by the State under the usehold policy. (Laugh, ter.) To sav nothing of taking over the financial instittions. because you Can’t absorb one without taking the lot. I tremble to think of the debt this country would incur if it carried out one-third of the propositions the honourable member and those who support him would wish to undertake. A reference had been made to the investment of funds in London, but the Minister pointed out that that money was earning 4| per cent. It was not a wise policy to keep a lot of money idle, and it was placed on deposit to meet the requirements of the country at any time. The Government was responsible for the time being for the investment of the country’s money. A member: And will be for a long is time to come., ■ ? .... Mr. Nosworthy! As my colleague »c--marks, we are likely to be responsible for many a long dav to come. Taxation Figures. Dealing with taxation, the Minister produced figures showing the way the

land and income tax was distributed Taking land tax, he said that of 21,760 persons owning land of an unimproved value exceeding £5OO and of less than £lOOO, 4390 paid no land tax at all, and the remaining 17,370 paid among them £15,185, which wass less than £1 per head of the total tax paid by this group and represented only 1-3 of the total land tax payable. Soma 37,795 people owning land of an unimproved value exceeding £lOOO paid fully 98 2-3 per cent, of the total land tax.' In the case of the income tax, of 72,690 persons with incomes of less than £lOOO, 27,730 paid income tax amounting to £254,000, equal, to over 8 per cent, of the total tax paid, while the remaining 92 per cent., amounting to £2,919,000? was collected from 16,861 taxpayers whose incomes exceeded £looo.' Pertinent Questions. The Minister said he assumed that the Leader of the Opposition would exempt the smaller taxpayers, and he (Mr. Nosworthy) asked from whom the hon. gentleman would obtain the ne. cessarv wealth to make good the loss. Mr ' Holland: There would be tho capital lew. The Minister said it was very easy to find fault and criticise, but he would still like to know something as to how the member proposed to make up for all those financial delinquencies that he was accusing the Govern, ment of piling up. It was a matter, he could assure the hon. gentleman, the conntrv was intensely interested in, and he would like the member to give the House full details in connection with his financial proposals Mr Holland: It will all be set out in the first financial statement we introduce.

The Minister said lie had answered a number of the member’s questions, and had shown him what a tremndous number of people there were who on account of the exemptions were now paving no income-taxation at all. It seemed that if Mr. Holland had his wav, nobody would pay any taxation at all. The concessions made proved that the present Government had been more liberal than anv other Government in the world. Last year, a concession was made with a view to bringing the taxation down to a level with the debenture tax and putting evervbodv on the graduated scale, of taxation and on a reasonable equality. The Minister said that Mr Holland’s idea of running a conntrv was to condemn what he called the present capitalistic svstem bv "book, hell and candle.” (Laughter.) Continuing, the Minister said that under the new system of the Public Debt repayment the Government had been able to. deal with the situation far more effectively than under the old Public Debt Extinction Act of 1910. Public Works Borrowing.

Who was there, asked the Minister, who would affirm that one penny too much had been borrowed for advances to workers?; and what public works would the Labour Party state money should not have been borrowed tor and carried out? Year after year he had listened to members in the House ask for grants for post and telegraphic, roadinfi, and railway facilities in their constituencies, but when the money had been spent to . the best advantage along came criticism about the extent to which the public debt had risen. , „ "I hold the view and the Government holds the view,’ added the Minister, “that sooner or later there must be a tapering off in the public works policy of this country, but it is a sillv individual who say’s that we must' shut down on livdro-electric schemes, roadways, railways, telegraph and telephone facilities, if they are wanted in this country. If we can get the money to complete these undertakings they will sooner or later become reproductive, and the country will not have to bear the burden on its shoulders. “I have held all along that we are borrowing on sound lines, provided we sit back' on what we have done and let the country have the benefit of the work.” . , . Mr. H. 15. Holland: Do you intend to curtail borrowing? . „ “We propose to curtail borrowing, replied the Minister, “as fast as we complete the big works we. have undertaken. Our whole idea is to complete the works we believe will be reproductive—when completed they will be among, the profitable investments of the Dominion; and it would be only a cowardly and weak Government who would flinch from carrying on as long as the credit of the Dominion is sound, because they did not have the courage to borrow money to complete the works they had undertaken. It would be tantamount to condemning our own policy.’’ . , Continuing, Mr. Nosworthy said it was useless for the “thin red line to criticise the finances of the Government. Dealing with control boards, he said it was a sound doctrine to allow the people who produced the primary products to elect their own members and deal with their own marketing. The Reform Party had shown itself to be a progressive party. The aftermath of the war had produced many difficulties, and a vacuum it was not easy to fill. New methods had to be invented for dealing with the country's produce. The Government had not denied ehher friends or; opponents the right to band together for the good, of the community. Shipping rings might do good for the Empire. If they were going to deny individuals the right to mass production they would chut out from kl! sections the right to handle their affairs as to benefit the communitv as i whole. Trade Within the Empire. Sams peop'e did. nyt -caHse. tbs

possibilities of the British Empire. if it were properly organised. _ Outside the consolidated British Empire there was a world that would be bound to come to Britain and its dependencies for a lot of things it needed. Regarding the matter of tariffs, the policy of the Empire had been a mixed one, in fact, a “cut throat” policy in its operation within the component parts of the Empire. He instanced the success of the United States in its fiscal policy, which was founded on the basis o'f a tariff wall against all other nations. He advocated free trade within the Empire. He stood as a Britisher to draw all British interests together. Britain and. her dependencies first and all the time. The Government’s energies would be devoted to the primary industries, because on their success depended the whole prosperitv of the Dominion. Without production the cities and towns and centres of population generally would dwindle and decay. The Minister was applauded on resuming his seat at 9.15 p.m. On the motion of Mr. G. W. Forbes (Leader of the National Party), the debate was adjourned and the House rose at 9.15 p.m.