REFORM’S VIEW

Dominion, Volume 24, Issue 266, 6 August 1931, Page 10

REFORM’S VIEW

Taxation Burden THE NEED FOR RELIEF Economy Essential PRIMAGE DUTY CRITICISED Several important phases of the national financial position were dealt with at length by the Leader of the Opposition, Rt. Hon. J. G. Coates, when the financial debate opened in the evening. He impressed upon the Government the cessity for keeping taxation as low as possible, and said that the Reform Party, while pursuing its policy of helping rather than hindering in the Prime Minister’s effort to maintain financial equilibrium, would have definite propositions to advance before it would be satisfied that the proposals in the Budget were acceptable to it. In particular, he criticised the reimposition of the primage duty on imports, urging the Prime Minister to reconsider his decision, Mr. Coates reminded the House that in January last the members of the Reforni Patty held a conference; as the result of which a statement was issued setting out that it was essential that the economic position of the country should be grasped, and that a serious time would have to be faced if steps were not taken to meet it During the recent short session he had stated that the policy of the Opposition would be to heln rather than to hinder the Government in its work of reconstruction. His party had endeavoured to keep its word, and he could say that it intended to continue along the lines already indicated.

The Reform Party would help rather than hinder, but it would reserve to itself the full right of criticism, and its right to explore every avenue which might be open in order tq bring about further economies to assist the country at present.

It was not his intention to move an adverse motion during the financial debate, Mr. Coates said. But in adopting that course the Government should understand that he intended to press for full consideration upon one or two important points, and that the Opposition desired rhe exploration of every alternative to certain proposals before it would be satisfied that the Budget was acceptable to it. He wished the Prime Minister to understand that he did not make these statements with any feeling of antagonism.

Belief for Taxpayer. The Government’s taxing proposals would be embodied in the taxing Bills yet to appear, and the Reform Party was anxious that every effort should be made to see whether the burden upon the taxpayer could not be relieved by means of further economies. It was desired that the harshness of.the proposals should be considered, and it was only by cutting down expenditure that taxation would be relieved at the moment. The Government should try to prevent costs from increasing wherever possible, but it was felt that at least one proposal in the Budget would have the effect of increasing costs, and m any case, the amount that would be received as a result of the additional-taxa-tion proposed would be small in comparison with the ultimate effect upon the taxpayer. The country was fortunate that in past years it had had a Government with sufficient acumen to build up reserves, and the truth of this was borne out by the Prime Minister’s reliance upon reserves in his budgeting this year. They were now to be put to a use that would be of benefit to the country generally and individuals in particular. This was not said in any boastful manner; the fact was plain that the country was fortunate in being able to call upon reserves in its time of need. Everyone must recognise the position which had to be faced, but it was agreed that the Budget should be balanced. It had been the policy of the Reform Party to balance its Budgets in past years, and it had always been maintained that it was in the interests of the country as a whole that the national accounts should be squared at the end of the year. Troubles Not Over. The importance of balancing the Budget this year was more obvious than ever, for by doing so New Zealand would enhance its reputation abroad at a time when other countries were meeting great difficulties and finding it impossible, or most difficult, to do what the Dominion was setting out to accomplish. However, it could not be said that the country’s troubles were over, even when the accounts were balanced. The primary producer would still be in a difficult position, and if the country was not careful he might overwhelm it unless some determined effort were made to help him out of his troubles. It was mainly as a result of the troubles of the primary producer that the Dominion was in its present position, and that the Government was faced with such a serious state of affairs as far as the national finances were concerned. It was pointed out in the Budget that £1,390,000 had been saved as the result of salary and wage reductions, and that another £595,000 had been saved by means of further economies. It had to be asked whether these amounts could correctly be termed “economies,” or whether they were merely to be included in the category of sums that would otherwise have been paid out and which had been stopped. Further amounts totalling about £3,000,000 were expected to be made up by increased charges and other means, but it appeared as though many more troubles would have to be faced unless either revenue improved or further extensive economies could be brought about. Whatever Government was in power next year would find that the drillcult time, and the balancing of the Budget would then be a most trying task. It was essential that if revenue did not improve drastic economies in departmental spending i should be enforced. There would appear to bo still more room for direct savings, and it was only by this means tliat die Government could hope to lighten the burden of taxation. Discussing taxation in general, Mr. Coates said it was proposed in the Budget to raise a further £1,060,000 by means of increased Customs duties. The surtax on incomes was 10 per cent, last year, and this year it had been increased to 30 per cent., so that income tax would go as high as 5/- or 6/- in the pound. In addition it was proposed to reduce the level of incomes exempted from tax from £3OO to £260, and this would mean that a very heavy burden was to be placed on the lower incomes. The Prime Minister should be told that the increase of the burden on lower incomes was extraordinary. Members: Hear, hear. Enormous Increase. / Mr. Coates said the lowering of the exemption limit would hit the family num harder and much sooner than previously, and added to this he would find the unemployment levy and the, emergency charge on his wages an additional hardship. His obligations had been increased enormously. If it were possible to reduce income tax, that would probably be the greatest factor in restoring confidence throughout the country, but it was recognised that this was not possible under present conditions. Once the Government said the proper course was to balance the Budget, it could not go back on its policy. However, it would be in the interests of the country generally if the limit of incomes liable to taxation were left nt £360. Mr. W. E. Parry (Lab., Auckland Central ) : How would you suggest you would make tin the balance? / Mr. Coates said he believed there were further economies that could be made. It was not possible for a man out of office to say exactly what should be done without having the details of departmental operations before him. He hhd had only

about three days to go into the question after the Budget had come down, but the present debate would not end for about three weeks, and by that lime the Reform Partv might be able to advance definite proposals for the exploration of real avenues of economy. Primage Duty Criticised. It was proposed by the Prime Minister to increase various items in the Customs tariff and he wished particularly to refer to the primage duty, putting it to the Prime Minister that he should do everythine possible to avoid reimpostng it. Customs duties were never popular, ami no one liked to see an additional tax on tea and sugar, but —— Mr. F. Laiigstone (Lab., Waimarino): Butl" It’s all “but.” . , t . Mr Coates said the money had to be found. The taxes were not welcome, but the position had to be faced. Mr J. S. Fletcher (Ind., Grey Lynn). What about the oil kings? Take it from th Jlr Coates said they would have full opportunity to discuss the oil kings, and he felt they would have full consideration when the taxing Bills came down The worst feature of the Customs proposals was the primage duty, which hit all nondutiable goods such as the farmer and the worker needed. To tax odd items was not as bad as taxing all items, lb? cost of production would be increased, and earning power would be brought down The cost of living should be brought down as far as possible to enable the workers' money to go further and to allow the farmer to produce at a figure at which he could sell profitbaly in the open market It was suggested that the Prime Minister should investigate every other form of taxation rather than the primage duty. , Reference to education was made m the Budget, and it was suggested an inquiry would be made into the cost of this State service to bring about reasonable economies. A special committee was promised last session, but it had not been appointed yet. Education was most important, but it was difficult to see why this department should be the only one not called, upon to economise. Apart from the salary cuts it had not been affected by economies. It might be possible to carry out economies in this direction without affecting the efficiency of the educational system in any way. Reading Expenditure. Referring to the construction of roads, Mr. Coates said the expenditure in this direction, but excluding spending on main highways, was £705,000 in 1920. l“ 1929 it was £833,000, in 1930 £1,061.000, and in 1931 it would be £1,475,000. What was the reason for the large Increase in expenditure? The Prime Minister: Unemployment. Mr. Coates agreed this was the primary reason. The unemployment problem had forced the Government to undertake roading work in order to find occupation for a large number of men. However, the Government should see that money was spent in a manner that would return as much for the outlay as possible. It had to be asked of the Prime Minister whether he believed that a good enough return was being obtained from the present policy of road and railway construction. The Prime Minister; Many are access roads. . .... , . Mr. Coates said that might be so, but he contended that a great deal of the work being done on certain roads was unnecessary at the moment. The main purpose of much of the road construction was to find work for the unemployed, but the country was entitled to ask if a fair return was being had. It would pay the country better to go in for extensive land development. Mr. Parry: That is what we asked yon t 0 Colonel T. W. McDonald (U., Wairarapa) : A good deal has been spent on roads necessary to the development of land. ... . . Mr. Coates said that might be so, but the Crown had developed only 100,000 acres and it would not be right to say that over £1,000,000 had been spent on access roads for this work. The future of the country depended upon agriculture, and increased production should be encouraged in order to counteract the fall in the value of primary produce. Mr. Contes also asked the Prime Minister if he had approached the Highways Board with a view to developing a definite policy. He believed that an arrangement should be reached whereby the board should give an increased subsidy on rural rates in order to allow of the maintenance of roads. Using the Petrol Tax. The Prime Minister: That .is before a special committee. Mr. Coates said the farmer was finding it more difficult than ever to pay his rates, and no greater assistance could be given the rural ratepayer than by helping him to pay his rates. The Minister of Agriculture. Hon. A. J. Murdoch: Will the honourable gentleman suggest that the petrol tax should he used? . , , . Mr. Coates said he certainly believed that the petrol tax. which formed part of the Highways Fund, could be used, and he believed that the motorists of the Dominion would fall in with the view that the country ratepayer should be assisted. The Minister of Public Works, Hon. W. B. Taverner: What steps would you take to achieve that end? Mr. Coates said he had already asked if the Government had taken any steps to form a definite policy with the Highways Board. Mr. W. J. Broadfoot (U., Waitomo): The Highways Board is “depoliticalised. Mr. Coates agreed, but he added that there was no reason why the Government should not see that a broad policy was adopted and that its action should be framed in accordance with those of the board. Canadian Trade Problem.

Mr. Coates said be regarded the position of stalemate between Canada and New Zealand as far as trade was concerned ns a very grave question. The two Dominions seemed to be as wide apart as the poles, and it could not. be good for either country. . The Prime Minister had taken up his stand, but he had to consider the question very carefully. New Zealand was looking for inter : Dominion trade, yet at. the moment she was not in close relationship with a Dominion which had been a good customer in the past. The Government had arranged for a Minister to go to Canada in 1928 to discuss trade, and there was no reason why this could not be done even at this late date. New Zealand merchants did not know where they stood and they were watching their orders being diverted to other countries, uoticeably the United States and Ge-many. The position was most unfortunate and one which should be remedied at an early date. FUSION QUESTION A National Cabinet? MR. COATES UNDER FIRE The proposals of the Prime Minister concerning the formation of a National Givernment, were responsible for several minutes' lively cross-talk shortly before Mr. Coates finished his speech on the Financial Debate. The question was ■ suddenly raised by Mr. A. M. Samuel i (Ref., Thames), when Mr. Coates said it was fully recognised that the position facing the Government was a serious one, and that it behoved everyone to pull | their weight during the critical times. Mr. Samuel interjected: “Do you think the position is so grave as to warrant a National Government?" Mr. Coates replied that he had never heard the Labour Party members say they favoured a National Government, lie thought, however, that the serious economic state of the country called for I unity and co-operntion of every member ' of the Hqnse. The position during the next year or two, lie believed, was going to be exceptionally severe. . Colonel T. W. McDonald (U., Waii rarapa) : The Labour Party has not said

it does not favour a National Government.

Labour Chorus: We have not been invited.

Mr. F. Laugstone (Lab., Waimarino): We were not offered the cake. Another Labour interjector: We might lake it if we were. The Leader of the Labour Party, Mr. H. E. Holland, to Mr. Coates: Are you extending an invitation on behalf of the Government? Mr. Coates: Does the honourable gentleman say he will make one to join in forming a National Government, and assist in dealing with the pressing problems of the 'primary producers? Colonel McDonald: If he does, will you do so? Will Labour Join In? Mr. Coates, to Mr. Holland: Will the honourable gentleman and his party join in such a movement? Mr. Holland: Is the Reform Party willing to join in? Mr. Coates: I am asking the honourable gentleman. (Loud laughter.) Mr. Langstone: Your sins are big enough. Mr. Coates raised a storm of amusement by proceeding: "May I say 1 hope I will always be in this position. . . .” He was interrupted by a renewed outburst of laughter, above which Labour members, who called, "We hope so,” clearly referred to Mr. Coates’s position a Leader of the Opposition. Mr. W. E. Parry (Lab., Auckland Central) : What’s the use of duck-shoving? Mr. Coates laughingly replied: It is easy to turn the scale these days. Mr. Parry: The scale turned easily last time. Mr. Coates, replying to Mr. Holland: As long as I am on my feet on this or any other side of the House it can be taken for granted that no individual consideration will stand in the way of .the country’s interest. (Reform and United “Hear, hears.”) Mr. Langstone: Not more than any other party. Mr. Holland: We might remind you of that at the election. Mr. Coates: This party places the interests of the country before party advantage. You are not in the same position. Mr. J. A. Nash (Ref., Palmerston): They are the cross benchers. Mr. Langstone: We are not members of Parliament like you. . Ready to Discuss Problems. Mr. Coates: If the Leader of the Labour Party is prepared to meet and discuss the problems that lie ahead of us, I will meet him or anybody else. (Hear, hear.) . Mr. Langstone: Tell us when the wedding takes place, and we will come along. Mr. Coates: I understand the Labour Party will not answer a direct question. Mr. Holland: If the hon. gentleman says he is extending an invitation we will ansvx'r it in double quick time. Mr. J. O’Brien (Lab., Westland): New Zealand has been asking you that question for six months. You have not answered it yourself yet Mr, Coates: If you say you are prepared to discuss the question we will be quite ready. Mr. Parry: Discuss what? Mr. Samuel: A 'National Government. Reference to the question was made by the Minister of Lands, Hon. E. A. Ransom, a little later. “We were not invited, either,” he said, "but everyone knows .where the Government stands on the formation of a National Government.” „ .. , Mr. Samuel: Do you favour a National Government? Mr. Ransom: Before this debate is finished the people of the country and the members of this House will realise that we cannot hope to pass through this crisis unless every member of the House puts his shoulder to the wheel, and leaves nobody pulling back on the breeching. Mr. Samuel: Would you ask the Labour Party to join? , Mr. Ransom: Anyone who will come in behind the Government Mr, Parry and Mr. Jordan (together): Yes. behind the Government. But why behind the Government? (Laughter.) DEFENCE OP BUDGET Minister of Lands in Reply ADVANTAGE OF RESERVES Appreciation of the manner in which the Leader of the Opposition had approached the proposals in the Budget was expressed by the Minister of Lands, Hon. E A Ransom, who followed Mr. Coates. He would not say that he agreed with all the deductions made by Mr. Coates, but nevertheless his criticism had been very fair. It was very gratifying to know from Mr. Coates that he ana the party he represented realised the gravity of the present situation. Mr. W. P. Endean (Ref., Parnell): We always have. . Mr. Ransom : It is also very gratifying to know from the Leader of the Opposition that he is prepared to stand in with the Government in the crisis that has arisen. , . Mr. A. M. Samuel (Ref., Thames): What about a National Government? Referring to economies. Mr. Ransom said that as far as possible they should apply so as to cause a minimum of hardship. The Leader of the Opposition had stated that reserves should be build up in good times for use in a time of crisis. He agreed with that, but it seemed to him that there was a hint that the Government had been able to take advantage of reserves created by the Reform Party. Most of the reserves, however, had been accumulated during the time of the late Sir Joseph Ward. It was indeed fortunate that these reserves had been built un in the days of prosperity. He was pleased to hear Mr. Coates give his approval to the balancing of the Budget. That was also the sentiment of the country. It was only by balancing, the Budget that the credit and stab-’lity of the Dominion could be maintained. Primary Producer Considered. Mr. Ransom said that if any member of the House could suggest any method of taxation that would cause less hardship than the proposals set out in the Budget it would be very welcome and readily ! availed of. if it were practicable. It had i been stated that the primary producer must be protected. That, he agreed, was I a factor that could not be overlooked. It was only necessary for one to read the Budget to see that the Government had ■ realised that nrimarv producers must receive more than ordinary consideration. The suggestion had been made that I further savings could be made in departmental expenditure. That was the case, but additional savings could not be made without further hardship, and the point • the House had to consider was whether | that hardship was justified. The Economy Committee was still at work. He thought perhaps it would be a good principle to have such a committee permanently. It need not necessarily be a com- 1 mittee of Cabinet Ministers. It could investigate not only departmental exnendi- | ture. but the cost of works and other | phases of Government expenditure throughout the Dominion. A committee . of that kind, he thought, would be a good i investment. Mr. Samuel: The member for Dunedin , West'suggested that last year. Brief reference was made by Mr. Ransom to education. lie said a suggestion | had been made that £1,000,000 could be taken off the education vote, but the Gov- | ernment valued education too. highly to make any ’■’discriminate reduction in that service. It was felt that the question was one for a committee of experts. No Further Surprises. Rumours that the Government might yet seek to open up a further source of revenue, such as an increase in the petrol tax, were possibly set at rest by the Minister. He had referred to some of the means adopted and set out in the Budget for the purpose of raising the money required for carrying on the business .of the country, and had mentioned one of two items that had escaped. The Leader of tile Labour Party: Will any of these items be touched before the session comes to an end? Mr. Ransom: There will be no further surprises for ths hon. gentleman. I think you know the worst. The difficulties the Dominion were Jip against, said the Minister, were not m- j

ternal but external. Going through the ( records of the sale prices of raw and exportable products it was found the consuming public was not getting the benefit of the low prices. / Trading Conditions.' ) "There is something wrong with the trading conditions in this country when even in the best market it is impossible to buy skein wool for darning at less than 10/- a lb,” declared the Minister. This wool, taken from the finest class merino flock, the Minister added, would cost lOd a lb at the outside. Mr..J. S. Fletcher (Ind., Grey Lynn): Why does not the Government do something about it? A Reform Interjector: Isn't it the Government’s job to fix<that? Mr. F. Langstone; What are you going to do? Mr. Coates: Where are the profits? Mr. Ransom: That’s what I would like to know: Where are the profits? It is worth while establishing a world-wide commission to investigate the differences in cost so we may reach a better basis of trading. High wages are sometimes blamed, but I do not think the cause is anything of the kind. Mr. Ransom referred to the growing restriction of the markets of the world so far as the Dominion was concerned. That was one of the problems that had to be dealt with. Land settlement and land development had to be looked to to meet their difficulties. In conclusion Mr. Ransom referred to the part played by herd testing, calf marking, rotational grazing and the use of fertilisers in increasing production. PECULIAR POSITION Chinese Father’s Petition RIGHTS OF CHILDREN The peculiar position of a Chinese resident of Wellington, a naturalised British subject, in regard to the residential rights of his children is shown in a.petition presented to the House of Representatives by the Rev. C. Carr (Lab., Timaru) on behalf of Mr. C. H. Chapman (Lab., Wellington North). The petitioner, a Chinese laundryman named Shack Horne, came to New Zea- ' land to reside in 1879 and remained until i 1904, when he went to Hong Kong on business, returning to the Dominion in 1906. He was again absent from New Zealand from 1909 to 1917, since when he lias resided continuously in the Dominion. He is a widower with seven. ' children. Two of the sons and the only girl were born in New Zealand, and the other four sons, whose ages range from I 12 to 19 years, were born in Hong Kong. I It is in respect of the latter that the ! petition has been framed. Two of the sons born abroad are at present in New Zealand on temporary permits and the petitioner asks that they be allowed to remain permanently in i New Zealand without the payment of poll-tax, permission having been previously refused by the Minister of Customs. He I asks that the other two sons who are still abroad be permitted to enter the Dominion and reside here permanently without paying the poll-tax. i As evidence of his standing as a reI putable citizen, Shack Horne states that he was for some years Chinese interpreter in the Magistrate’s Court at Wellington and was also an interpreter in connection with the Customs Department. He claims that he was instrumental m introducing legislation for the suppression of the opium traffic in New Zealand and was the first to introduce to the General Assembly the matter of the appointment of a consul to represent the interests of the Chinese residents of the country, having journeyed to China to obtain the permission of the Chinese Government. For manv years he has been actively connected with Chinese Christian miss-on work both here and in Hong-Kong. His only daughter is a missionary in HongKong. nttaclrd to the Chinese Christian Mission. His eldest son served with the New Zealand Expeditionary Force in the Great War. . „ The petition has been signed by IJs residents of Wellington.