PARLIAMENT IN SESSION

Dominion, Volume 24, Issue 147, 18 March 1931, Page 10

PARLIAMENT IN SESSION

Budget Shortage of £1,250,000 MR. FORBES’S FURTHER REVELATION Bitter Fight on Finance Bill Expected ‘ Intimating that the Budgetary worse since his statement five weeks ago the Prime Minister W e Rt Hon G W. Forbes, announced in the House of Kepresei ta tiv'es last evening that it was likely the 'previously on March 31 with a deficit of at least £1,250 000 Mr Forbes had announced a prospective shortage ot i'J’U.uw, but' revenue has dropped alarmingly in the past two months the being in two itetns-railway interest and Customs """concern was also expressed by Mr. Forbes regarding the trial agreements in the light of the new economic conditions. The Bill was iwroduced in the House early yesterday morning at the conof the long debate on the Address-in-Reply. Labour moved four amendments to the Address-in-Reply, but after a protracted sit tine the™ of these was disposed of at 6.30 a.m. Labour contested tte introduction of the Finance Bill at that stage, but, after several divisions, the first reading was accorded. ho tn v Pn It was anticipated that second reading speeches would be taken when the House met in the evening, but the Prime Minister made an arrangement whereby the adjournment was taken after his speech, the object being to give the Opposition parties time to consider the details of his statement on the national finances. Claiming that wage-reduction proposals were imperatively necessary Mr. Forbes remarked that New Zealand would be lucky if t Passed through the depression with no greater a measure of sacrifice, an observation which revealed the anxiety the Prime Minister is known to feel lest a further cut in salaries will not be necessary. Laboui s sarcastic reception of the Prime Minister’s statement makes it certain that the wages battle to be opened in real earnest in the House to-day will be bitterly and strenuously contested.

ADDRESS-IN-REPLY Conclusion of Debate amendments defeated an all-night sitting the Address-in-Reply' debate was concluded in the House of Representatives at 6.30 o’clock yesterday morning. The'debate commenced on Friday afternoon and 55 members took part in it.. Of this number 37 were Labour speakers. Several amendments were moved from the Labour benches, but air of them were defeated. Fifteen speakers, most of them Labour members, spoke on Mr. Savage’s amendment, which aimed at a provisional moratorium, the appointment of a tribunal to adjust claims under* financial agreements, and ample supplies of fertilisers for farmers at easy rates of payment. Mr. Savage moved his amendment before the supper adjournment on Monday evening, and a division on it was not reached until 4.25 a.m. yesterday. The amendment failed to attract any Opposition support and it was defeated by 40 votes to 22. The 22 votes cast in favour of the amendment represented the full voting strength of the Labour Party and the votes of Mr. J. S. Fletcher . (Ind., Grey Lynn) and Mr. H. M. Rushworth (C.. Bay of Islands). The voting was as follows:— • For the amendment (22): Armstrong, Barnard, Carr, Chapman, Fletcher, Fraser, H. E. Holland, Howard, 'Jordan, Langstone, McCombs, McKeen, Martin. Mason, Munro, W. Nash, O’Brien, Parry, Rushworth, Savage, Semple, Sullivan, Against the amendment (40) : Atmore, Bitchener, Black, Bodkin, Broadfoot, Burnett, Clinkard, Coates, Cobbe, de la Perrelle, Dickie, Donald,. Field, Forbes, Hall, Hamilton, Harris, Hawke. Healy, Kyle, Linklater, Lye, McDougall, Macmillpn, Macpherson. Makitanara,’ Munns, .Murdoch, J. _ A. Nash, Ngata, Polson, Ransom, Smith, Stallworthy, Taverner, 'JL’e Tomo, Veitch, Waite, Williams, Wright. Another Amendment. Mr. R. McKeen (Lab., Wellington South) moved a further amendment, that in the opinion, of the House the proposals contained' in the GovernorGeneral’s Speech giving powers to the Arbitration Court would lay the foundation for the repudiation of agreements that had been freely entered into’ by employers and employees, and would have the effect of destroying public confidence in constitutional and peaceful means of settling industrial disputes. Mr. McKeen contended that if the Government’s wage-reduction proposals went through there would be a definite lowering of the standard of living. The salaries of the Publie Servants had lagged a long way behind the rise in the cost of living and the cure proposed by the Government would be worse than the disease. The reduction in wages would strike a blow at the Industrial Conciliation and Arbitration Act which had done SO much to further the relations between employers and employees. After Mr. M. J. Savage (Lab., Auckland West) and the Leader of the Labour Party, Mr. H. E. Holland, had spoken, a division taken on Mr. McKeen’s amendment resulted in its defeat by 37 votes to 20. Mr. Holland said that what was contemplated was that any agreement could be broken by Parliament. It was the duty of the Government to set an example to the rest of New Zealand. The disregard for agreements was extraordinary and the employers had broken ten times as many agreements as the workers. There was no guarantee that the cost of living would fall after the wage cuts had been made. Final Words. The final word in the debate was had by Mr. P. Fraser (Lab., Wellington Central), who criticised the Government strongly for what he said was tantamount to it forsaking its principles for the Reforpi Party. He said the Leader of the Opposition had made seven points in his five-year plan and the Government had already agreed to adopt six of them, the only one outstanding being that relating to the South Island Main Trunk railway. On the one hand he congratulated the Prime Minister on the way he had made up his mind and on the other he congratulated him for the way in which he was driving his unwilling hosts. The Reform Party was all smiles while it was being driven, but the Government was very gloomy. It had never been clearer than it was nt present that the two parties should get together. Some members of the two largest parties did not agree with the Government’s policy, but the time to show that disagreement had been when the first division had been taken. The Prime Minister had to be congratulated on making up his mind, but the question arose who had made it up for him. The Dominion had been visited by sueh wellknown personages as Lord Barnby, who had inquired about New Zealand wool, but they did not want men like him interfering in local politics. _ The Prime Minister had dominated his party in sueh a way that the line in Longfellow’s poem relating to the “dumb, driven cattle,” could be read appropriately. There had been no caucus to decide the party’s policy and although Cabinet might have been consulted upon it, the party had not been. The Leader of the Labour Party’s noconfidence amendment was moved against the Government’s policy and not against the Prime Minister. The policy stood for a reduction in the wages of Civil Ser-

vants and in the wages of men on relief works. The United Party had attacked the Reform Party bitterly after it had been returned, but now, when the crucial issues were to be.decided, it was going into the lobbies with the Opposition. FINANCE BILL Surprise Appearance LABOUR OPPOSITION Immediately Mr. Fraser had sat down and the formalities, connected with the . Address-in-Reply had been dealt with, the Prime Minister rose and introduced the Finance Bill, a summary of which appears in another column. The House was very tired by this hour and members were obviously surprised at the appearance, of the measure. Labour participated in a preliminary skirmish in the fight it. intends to make against the -wage reduction proposals. On all the formal motions' associated with the first reading of the Bill Labour called for divisions, and fully 90 minutes was spent by members in filing in and out of the chamber to cast their votes. “We will fight this Bill every inch from its appearance to its disappearance,” declared Mr. P. Fraser (Lab., Wellington Central). “I have not the slightest inclination to facilitate its passage at any stage. The Bill is not necessary. The more that can be done to prevent its passage the' better for the workers of the country and the better for the country itself in hard cash. The Bill should stop right now, and I trust that every member who can do anything to prevent it becoming law will do it.” Mr. Speaker: Does the honourable member object to the Bill going to the committee? Mr. Fraser: I am strongly opposed to it going to the committee. It should stop now. A point of order was raised by Mr. H. G. R. Mason (Lab., Auckland Suburbs), as to whether new business could be introduced after midnight. Mr. Speaker said Governor-General’s Message had to be received immediately. Objection to further progress of the Bill should be lodged before the Bill was introduced. Mr. Forbes’s Ultimatum. The Prime Minister, Rt. Hon. G. W. Forbes, said his object in asking the House to consider the Bill was to get it read a first time- so that it could be printed and circulated. “The members of the Labour Party must realise,” said Mr. Forbes, “that however long they may sit there the Bill will be gone on with. We have sat for long hours listening to the eloquence from the Labour benches.” In reply to the Leader of the Opposition, Rt. Hon. J. G. Coates, Mr. Forbes said the taxation Bills and other measures would be brought down after the earthquake legislation. Labour then called for divisions on the .motions that the Bill be referred to the committee of the whole House, that the Governor-General’s Message be agreed to, that the committee’s resolution be agreed to, that the Bill be read a first time and printed and circulated. In each case the voting was 38 to 20 in favour of the motions. Labour voted against them. The House then adjourned until the evening. APPEAL FOR HELP Country’s Finances SERIOUS POSITION Speech by Mr. Forbes The increasing seriousness of the position of the national finances impelled the Prime Minister to make an appeal for the co-operation of all sections of the House in meeting the present crisis when he rose to move the second reading of the Finance Bill when the House met in the evening. He said the position was such that the provisions of the Bill had been made absolutely imperative, and in making this point he quoted the returns for the first 11 months of the current financial year, which showed that the estimated deficit of £750,000 would probably be exceeded by £500,000, while he added that next year’s estimated deficit of £4,500.000 would also be exceeded. Mr. Forbes said that when he returned from the Imperial Conference he had found the finances of the country in such a position that it was realised that something would have to be done to meet the serious s i inkage in revenue. If something were not done, it was realised that the country would be in a serious position. Mr. W. E. Parry (Lab., Auckland Central) : Do not put the country in mourning. - . . Mr. Forbes said he considered the wisest thing to do was to let the country know the exact position. All departments of State were asked to supply returns, with the result that it was shown that if the c' -"se being followed 'were pursued, there ' ■ '1 be a deficit of £4,500,000 next year. . ..ieh a statement required the attention of the whole community. To meet the position the Government had proposed to effect the following savings and adjustments to increase revenue: —Reductions in salaries and wages, £1,500,000; reduction of other expenditure and other adjustments, £1,250,000; increase in pos-

tage rates, £900.000; additional taxation, both direct and indirect, £850,000. Dominion’s Standing. Th® high reputation of the Dominion was du® to the fact tUnt it had dealt with its Budgets and other financial adjustments in a business-like way, and the Government was anxious that easy means of meeting the position should not be adopted, which might impair the conntry’s reputation at some future * ante. “New Zealand has faced facts in the past,” said Mr. Forbes. “She has been prepared to make sacrifices when called upon to do so, and I felt that in asking for those sacrifices that . would be required to enable us to maintain the high standard of the past, I was asking for something I felt quite confident the people of this country would agree to. “The result is that the first Bill m regard to those measures proposed is before the House. I have the utmost sympathy for those who are called upon to face a reduction in their salaries and wages. During the years I have been in this House 1 have fought very hard for the standards m existence, and I have done my best to fight the battles of the Public Service during the time I have been here. I feel it is a very serious matter for them, but in my mind there is no other alternative but to make that reduction if we are going to maintain this country in a solvent condition.” ~ , . The Prime Minister said he did not consider he would be a friend of the people if he told them there was no need to make the reduction. If the present line of financial action were pursued the time would probably come when the state would not be in a position to pay its salaries. He knew that what he had done would be bound to meet with the strenuous resentment of those who took a narrow view. The country had a' right to expect its citizens to make a sacrifice for the common good. „ „ Another Sacrifice?

“If we are able to get through this present crisis with only this measure ot sacrifice, then we should consider ourselves very lucky indeed,” Mr. 1* orbes said. “That is my feeling in regard to it. I feel we should make the sacrifice as easy as possible, and that we should do everything we possibly can to bring down the cost of living so that the real wages shall be equal to what is being paid m cash wages. The value of money consists in what it is able to purchase. “When making my statement I made an appeal to employers right throughout the country to follow the lead of the Government in that respect. I felt it was not a fair thing to expect a section, the Public Servants, to make this sacrifice alone. One would have liked, in regard to our' own employees, to be able to treat them better than anybody else, but where we are asking them to make a sacrifice, the only way that sacrifice could be made less harsh was by bringing about a state of affairs whereby overhead costs could be reduced by a reduction in the price of commodities.” Referring to the possibility. of exploitation by tradespeople, the Prime Minister said the Department of Industries and Commerce had been asked to watch the position very closely. (Labour laughter.) He liad a sincere belief that his appeal would produce a response from the people of the country. It had not been possible to bring about a reduction in the wages of all, as the majority of workers in the Dominion were employed under the conditions of awards. It was realised that if the bottom dropped out of the country under the present conditions, it would take _ a very long time for things to be righted. To enable the country to come through what was one of the most serious economic crises in its history, powder was to be given to the Arbitration Court to vary awards. _ “Misuse of Words. A Labour member: Breaking agreements. , , . Mr. Forbes said that was an absolute misuse of words. When an employer and employees went to the court, asking for an award conditions were laid down by the court, but they were not binding upon the employee as far as his obligation to work was concerned. The worker could put on his coat and walk out of his job. (Labour derision.) It could not be said there was a contract in that respect. A contract was an agreement between two persons, but the award made by the court was binding in a different way. Mr. H. E. Holland: Is not the agreement always in regard to a minimum that will be paid? Mr. Forbes said this was so. The comparison had been made between the mortgagee and mortgagor, but this was different and as already indicated legislation would be brought down providing for arrangements whereby mortgagees and mortgagors would be protected and for negotiations between them. Mr. C. A. Wilkinson (Ind., Egmont) : Including the Government?. Mr. Forbes said he did not think the Government would need to be included as it was meeting every ease in a fair and equitable way. It was trying to meet the difficulties of its clients as best it could. Cost of laving. The Prime Minister then turned to the cost of living and he quoted figures supplied by the Government Statistician showing the percentage increase in retail prices since July, 1914. The comparison was made with July, 1914, all through and the increases in the food groups were as follow :—February, 1921, 75.1 per cent.; February, 1922, 44.8 per cent.; February, 1929, 47.9 per cent.; February, 1930, 45 per cent.; and February, 1931, 29.4 per cent. The percentage increases in the “all groups” was shown as follows for the same times: —85.5, 65, 61.2, 59.2 and 50.3. It would thus be seen that, stated as a percentage decrease, between February, 1921, and February, 1931, computed with February, 1921, as the base, the fall represented a decrease of 26.1 per cent, and 19 per cent, respectively. These figures showed that there had been a material downward trend in the cost of living, and even the most critical members in the House would not say that there had not been a drop. It was confidently expected that there -would be a further substantial decline after the Government’s legislation had been put through. Explore Every Avenue. The estimate of a deficit of £4,500,000 made it imperative that every avenue to bridge the g*ap should be explored. Sliding scale reductions in wages had been suggested, but it had been found that no matter what scale was introduced the amount needed by the Government could not be secured. The actual amount to be secured out of the 10 per cent, “cut” would be £1,391,600, but upon the basis of three sliding scales suggested the amounts that would be saved would be only £688,000, £938,000, and £739,250 respectively. When up against such a problem it was no use trying to deal with measures that would bring in so little. Mr. Forbes said he had been impressed at first with the idea of a sliding scale, but the amount to be saved by the 10 per cent, reduction was the least that was wanted from that source. Employees were being asked to make a very small sacrifice in view of the position the country was in. Mr. Holland: Have you worked it out on an income basis? ’ Mr. Forbes said he had gone into this aspect. All those Public Servants with salaries over £3OO had been subject to the 10 per cent, increase in income tax last year, and they had also had their salaries cut in common with others in 1921. This had not been restored, and now they were to have a further reduction of 10 per cent, in their salaries. It was realised that they had suffered more than some others, but the position could not be avoided. The Government had certainly started at the top for the salaries of the Prime Minister and members of Parliament were to be reduced also. He regretted that it was necessary to reduce their salaries as they had not had the previous cut of 10 per cent, made good. Mr. Holland : Members will not waste time fighting about their own salaries. Mr. A. Harris (Ref., Waitemata) : What about the judges? Mr. Forbes said they were governed by the constitution of the country and Parliament had no power to vary their salaries. . ,

Mr. Harris: Will the Prime Minister say that they are the only ones not to make a sacrifice? The Prime Minister said he did not know about that. The Government had brought everybody possible under its legislation. Mr. Forbes then moved the second reading of the Bill, after which the House .Aiourned till this afternoon.

WAGE REDUCTION

Provisions of Bill CUT-IN STATE GRANTS Superannuation Issue VARIATION OF AWARDS Provision for a 10 per cent, reduction in the wages of Public Servants and the granting of power to the Arbitration Court to vary awards is made in the Finance’ Bill introduced in the House of Representatives at the conclusion of the Address-in-Reply debate yesterday is divided into two parts, one dealing with public expenditure adjustZt, and the other with the amendment of awards, industrial agreements and apprenticeship orders in relation to Tire main provision m the first part is the proposal to reduce the salaries of Ministers of the Crown, members ot larliament, and Civil Servants by 10 per cent, as from April 1 next. The only exemptions made are m respect to the Governor-General, who has, incidentally, requested to be allowed to participate in the 10 per cent, “cut,” and persons employed by the Government or by any other authority for a specific limited term of office persuant to a contract made out of New Zealand. In contrast with the Public Expenditure Adjustment Act, 1921, the High Commissioner is not exempt. . _ , Education Grants.

It is provided that grants made to education boards, and to the governing bodies of secondary schools and university colleges, for the payment of salaries, shall accordingly be reduced by 10 per cent. If grants are only partly available, for the payment of salaries, directly or indirectly, the Minister of Finance is empowered to determine the portion deemed to be available for salary payments. Grants or subsidies paid to local authorities under various enactments m respect to general rates, are subject to. a 10 per cent, reduction. This provision also applies to the proportion of bath fees paid to the Rotorua Borough Council under the Act of 1922. Superannuation Contributions. Those whose salaries are reduced in accordance with the proposals in tlhe Bill, and who are contributors to superannuation funds, by giving notice by September 30 next, may continue to contribute to the funds as if their salaries had not been reduced. A similar saving of rights is made in respect of the retiring allowances of stipendiary magistrates. . Provision is also made flor the saving of rights of certain other persons with respect to compensation for loss of office or retiring allowances. . Power is specifically given to . the Governor-General by Order-in-Council to apply the salary reductions to the Cook Islands and Samoan Public Services. A. special provision is made with respect to retiring allowances out of superannuation funds to certain persons compulsorily retired. If a contributor to the Public Service, Railways, or Teachers Superannuation Fund is, through no fault of his own, thus retired between the passing of the Act and September 30 next, and is within five years of his normal retirement, he shall be entitled to receive a retiring allowance which shall not be greater than the amount he would have received on his voluntary retirement. . . Variation of Awards. The main provision in the second part of the Bill is the empowering of the Arbitration Court to amend by general, order awards or industrial agreements with respect to rates of wages. Such revision may be made at any time and from time to time at intervals of not less than six months. In exercising such powers the court shall take into account the economic and financial conditions affecting trade and industry in New Zealand, and all other considerations which it deems relevant. Before making any general order, the court shall afford opportunities to representatives of the parties bound by awards and industrial agreements to be heard by the court with respect to the amount by which rates of remuneration should be decreased or increased, but the failure of any parties to appoint representatives shall not affect the validity of any general order made by the court. Provision for Exemptions. The court may make special provision, for the exclusion of any class of workers from the operation of the general order. The powers conferred on the court with respect to awards and industrial agreemeuts may be exercised in respect ot the rates of remuneration fixed by it by apprenticeship orders, provided that nothing in any general order reducing or increasing such rates shall apply to any contract of apprenticeship in force at the taking effect of such general order. The part of the Bill, dealing with amendment of awards is intended to operate from April 1 next, and to continue until December 31, 1932.