PARLIAMENT IN SESSION

Dominion, Volume 25, Issue 170, 14 April 1932, Page 8

PARLIAMENT IN SESSION

Further Debating on Economic Policy

.GOVERNMENT SHOWING NO HASTE

Taxation Bill to be Introduced Shortly

(From Our Parliamentary Representative.)

No haste has so far been shown by the Government in attempting to dispose of the second reading debate on the National Expenditure Adjustment Bill, and the House of Representatives is being given full latitude to speak at its leisure. Nor does it appear, from what can be gathered of the plans of the Prime Minister, that any effort will be made to rush this highly important measure through before next week as was originally intended, for it seems that the passage of the Bill will be delayed for several days in order to give effect to certain taxing proposals before the Committee stages are readied Judged by the standard of constructive contributions, the remarks made on the Bill yesterday were devoid of any great Interest There were no speeches of real worth among the 13 made, and the chief interest of the day was the display of support for the measure by several members who were known to have been among those seeking to induce the Government to modify its proposals, particularly as they related to wages and pensions reductions. Whatever momentary stir might have been created over the attitude of a section of the Government members, toward the Bin was dispelled in the lobbies yesterday when assurances were given that those opposed to certain parts of the Government’s policy had no intention of creating unnecessary friction, and that they were prepared to stand behind their party. Significance was attached to the remarks of one Government member who laid at rest any fears that serious developments might arise, or that they had ever been anticipated. Another member went so far as to offer the increased wage tax as an alternative to wages and pensions cutting on the scale contemplated in the Bill, but there is a general feeling that differences of opinion will be cleared away pffftc ti vely ■ For the rest, the day produced little of moment. The intention of the Government is to let the second reading debate run on until the end of the week, when a taxation Bill will be brought down, and this will be put through before the most difficult stage of the National Expenditure Adjustment Bill is taken in Committee. Criticism of the measure so far offered by the Labour Party has been couched in general terms, the Government being pilloried for its policy as a whole which, it is asserted, has made it necessary for the present proposals to be put into effect. More detailed comment will no doubt be heard when the clauses are considered tn Committee.

FEES OF STUDENTS 1 A Reduction (Sought -REASONABLE REQUEST” The reasonableness of a request that the Government should investigate the possibility of approaching the New Zealand university colleges with a view to bringing about a reduction of fees was admitted by the Prime Minister, Rt. Hon. G. W. Forbes, in reply to a question on the point by Mr. A. J. Stallworthy (Govt., Eden) in the House of Representatives yesterday afternoon. Mr. Stallworthy asked the Minister of Education, through the Prime Minister, whether in view of the reduced incomes of university students the Government would use its influence to secure a reduction in university college fees as well as those for examinations and registration fees payable to the Government. Mr. Forbes said he inferred the question applied to all classes of students. He pointed out that the university colleges depended largely upon tuition and examination fees to enable them to meet current expenses, and the finances of the colleges had already been considerably affecte'd by the statutory reduction of university funds. However, it appeared reasonable that some reduction of fees might be sought in view of the falling off in the incomes of students and their parents. Mr. Forbes added that he would be pleased to get into touch' with the university colleges on the , question. I . i I NO INVESTIGATION Recent Riots at Dunedin The Prime Minister, Rt. Hon. G. W. Forbes, declined the request of the Leader of the Opposition, Mr. H. E. Holland, in the House of Representatives yesterday to pursue an official inquiry into the clash between the police and the unemployed at Dunedin on Monday. Sir. Forbes said a full report of the occurrence *had already reached the Government, and this- showed that the police had acted in a satisfactory manner and with moderation. Mr. Holland: That is~bnly half of the story. UNPAID LEVIES No Bar to Employment “EACH CASE ON MERITS" * In spite of the fact that the law lays it down that those who have not paid their unemployment levy shall not be entitled to relief work, the Minister in Charge of Unemployment, Rt. Hon. J. G. Coates, gave an assurance to Mr. ,W. J. Jordan (Lab., Manukau) in the House of Representatives yesterday afternoon that work would be given in necessitous cases. Mr. Jordan asked the Minister whether he would give instructions that in cases where postponement of or exemption from the payment of the levy , was granted on account of hardship, the persons affected would be eligible for relief work. He pointed out that many were unable to pay their levies, and it would be a great hardship if they were prevented from getting work and go earning some money. Mr. Coates said the cases of men granted exemption from payment or a postponement would be taken into consideration, and he would be glad to see whether some reasonable arrangement could be made in this respect. There were, in fact, men receiving unemployment relief work who had not paid their levy. Some persons- were almost destitute. Mr. R. Semple (Lab., Wellington East): They cannot pay; you cannot got blood out of a stone. Mr. Coates said some were in very difficult circumstances, but each case would be considered on its merits and work would be found if possible, Mr. Jordan said it was definitely laid down that those who did not pay their levy could not be given work. * Mr. Contes said it was not definite by any means. Although the law might stipulate this, there were instances in which the law wns not. adhered to. BASIS OF RELIEF Plans for the Future Steps have’ been taken by the Government, in conjunction with the Unemployment Board, to arrange a new scale of relief rates under, the scheme now operating, according to a reply given by the Minister in Charge of Unemployment, Rt. Hon. J. G. Coates, to a question by Mr. W. E. Barnard (Lab., Napier), in the House of Representatives yesterday. Mr. Barnard asked the Minister whether in view of the increased amount of money that would shortly be available for unemployed relief purposes be would be in a position to offer work almost immediately under No. 5 scheme for the full number of days—namely, two days for single men, and 'three and four days for married men where the No. 5 scheme was

ting continued, and to single men where work for which they were eligible was procurable. The weekly allotments under the hoard were insufficient, Mr. Barnard said, and some of the men were in such sore need that they were becoming desperate. The Minister said that anticipating the passage of the Unemployment Bill (which is before the Legislative'Council), he had made arrangements in this direction, and he was now in communication with the Unemployment Board with a view to altering the basis of relief payment. He assured Mr. Barnard that such new rates as were possible under the scheme would ba given, but he was not in a position, to discuss the situation of the No. 5 scheme further at the present time. TALK OF DISSENSION Statement Not Justified The suggestion that the proposals in the National Expenditure Adjustment Bill were the cause of dissension among members of the Government was repudiated by Mr. P. A. de la Perrelle (Govt., Awarua), during the second reading debate on the measure, in the House of Representatives yesterday afternoon. Mr. Perrelle said that during the last few days there had been talk of a “cave" or dissension among Government members. He was satisfied that while members of the Government were perhaps not in agreement on all the proposals in the Bill, they were there to assist the Government, and they realised they had to do what was in the best interests of the people. There was no justification for the suggestion of a “eave” in the party. He considered the present a time for constructive ideas and unity of purpose. • “This is a time for earnest co-opera-tion, Mr. Perrelle continued. There was a duty upon the Opposition to face up to the present critical situation. The present crisis was world-wide and deficits were general. . In New Zealand they had reason to be gratified that a genuine attempt had been made to relieve the existing state of affairs. He appreciated the fact that an effective Opposition meant good government, but the present was not a time for destructive criticism. There were three great problems facing the people of the Dominion. These were the precarious state of the farmer. • the state of the country’s finances and unemployment. “NOT JUSTIFIED” Cuts in Pensions and Wages LABOUR' CRITICISM The contention that the Government’s proposals to reduce wages and pensions were out of all proportion to the needs of the times was made by Mr. P. Fraser (Lab., Wellington Central) in speaking on the National Expenditure Adjustment Bill in the House of Representatives yesterday. Mr. Fraser said that if the Government proposed equality of sacrifice its policy would be generally accepted, but it proposed nothing of the kind. The Labour Party would have stood behind the Government if it had adopted a plan whereby everyone would have shared alike in the process of rehabilitation, but it bad failed completely to devise an equitable adjustment. The country had not been told how much was to be taken away in pensions and how much was to be saved by raiding the sustenance of widows and orphans. The Government wns saying that because more goods could not be sent-' out of the country the people should be allowed to starve and be evicted from their homes.

If there were faith in the country find in the organisation of its industrial forces to create a sufficiency for all wants, it: was reasonable to organise credits to assist the 1 , economic position. He did not believe that a wholesale manufacture of paper money would solve all problems, but ' a properly-managed currency wns a first essential. There wns more wealth in the country to-dny than there wns in 1921. Vet the note issue had decreased from £7.500.000 in Hint yenr to £5,700.000 this year. There was no particular magic in note issue, but it wns nn important aspect of the general problem, and the House should take notice of the question. Wns it not possible to devise some scheme whereby the homes of the poor could lie left alone? Tie believed it wns possible to organise the internnl economy of the country nnd its credit, which letter could h’e used to the better adv.nntage of the people ns a whole. 1 Mr. Frnser challenged figures ouoted by previous speakers, nnd ho said the cost of living had fallen bv onlv 7 ner cent, between 1930 and 1931. This fall did not in any way justify tlie attack being made on the incomes of workers and pensioners.

BURDEN ON PEOPLE State Enterprises SOCIALIST TENDENCY Harmful Effects of Policy An attack upon the Socialistic tendencies of the State to-day and the intcrl. encc of the Government iu busiue. s, which lie said was costing the taxpayers more than they could bear, was made in the House yesterday by Mr. H. M. Gampbell (Govt., Hawke’s Bay), in speaking on the second reading of the National Expenditure Adjustment Bill. He said the Bill did not appeal to him, although he intended to vote for it, but he added that he considered it was merely an expediency and that it would not give permanent relief. Mr. Campbell said the State had been going in for enterprises in competition with private individuals far too much, and the harmful effects of this policy were now being felt. The interference by the State in private business was at the bottom of New Zealand’s troubles to-day. The State had piled up expenditure on its departments and the taxpayers had to bear the burden of increasing costs to enable chean services to be given. It was claimed that the Dominion was not Socialistic, but it was decidedly so. Taxpayers Paying. Mr. P. Fraser (Lab., Wellington Central) : Would you specify the services you would do without? Mr. Campbell said he would like to see practically every State service abolished. He said the excuse for building up State activities was that the people were getting cheap services, but actually they were not, for although some might not have to pay as much as thev would otherwise, the taxpayers had-to bear the burden. The country would be far better off under private enterprise, hor instance, it would be very helpful if the Government did not have to pay but interest on the railways, which were proving such a heavy drain on the State finances. It was true that the State Fire Office paid its way, but it was very questionable whether it had been of any real use since its establishment. It was possible to insure far cheaper with at least one company to-day than with the State Office. In addition, one could not be sure that any benefit had accrued from the operation of the State coal mines. They had probably prevented the price of coal from going down, even if they had prevented it from going up. State motor services were all running at a loss, and although figures were not available, the country had yet to find out how much the operation of a State broadcasting service was to cost it. There was-a regular deficiency in the finances of the State tourist resorts, and it was highly problematical whether any benefit had been derived from the State shipping service. The Public Trust Office had grown into n huge and unwieldy concern, and the State might have to bear a large liability in connection with its operations. It was notorious that a business run by the State was always conducted far le-s efficiently than a private enterprise, and the State activities of New South Wales and Queensland proved this beyond doubt. New Zealand was itself suffering from the Socialistic activities of the Government. and there was no sign of expenditure in this direction being curtailed commensurate with the needs of the time. State Advances Office. The State house-building policy had cost the taxpayers large sums, and still the expenditure was piled up in all directions. Large offices had to be erected to house ever-increasing staffs, in spite of the fact that the only two services really necessary were the Post and Telegraph and Police Department. The operations of the State Advances Department had resulted in all loose capital being driven out of the country. All the British companies that had come to the Dominion prepared to lend money at a reasonable rate had been driven out. The department was a serious menace today because it could not find its interest and the general body of taxpayers had to find the money to pay for loans made in England. The time had arrived when it should be clearly understood that the activities of this department should be severely curtailed. It was possible to get cheaper money from the British companies before the State Advances Office started operations 'than it was to-day. The Government should take a firm stand in regard to the expansion of State and local body enterprise. “Let the Government understand that its proper function is to govern and not to enter into competition with private trading,” Mr. Campbell added. NATIONAL DEBT Overseas and Local Tenders REDUCTION OF COSTS Agreement with those who considered that attempts should have been made earlier to get costs down to a level at which industry might be able to revive, was expressed by the Hon. A. D. McLeod (Govt., Wairarapa), during the second reading debate on the National Expenditure Adjustment Bill in the House of Representatives Inst evening. If there were no conclusive evidence that the cost of living had fallen iu a ratio equal to the proposed reduction in pensions, he would have some hesitation in supporting the proposal, he said. The figures, however, showed that the reduction in pensions was no greater than the reduction in the cost of living. Any system of managed currency would have to be conducted apart from political interference. New Zealanders were the greatest international traders per capita in the world. The Dominion also had the second largest overseas debt. He admitted there was repudiation in the Bill, and that they were legislating to break contracts. The debts incurred within the Dominion were incurred with a full knowledge of what was going on, but the overseas lenders had depended on our honesty to meet our debts and left it to the Dominion to say how the money should be spent. The ultimate result of the proposals in the Bill would be to the benefit of the people of the country who had lent their money to the State. Concessions on Debts. Mr. J.; O'Brien (Lab.. Westland), speaking first on the question of international debts, pointed out that Britain received substantial concessions from the United States because she was not in a position to pay her debts. Mr. McLeod: It was by mutual consent. Mr. O’Brien : “Yes; because Britain could not pay.” He had brought before the Prime Minister last year the fact that if New Zealand received from Great Britain the same concession as the Motherland received from America, £480,000 would have been saved to this Dominion. The Prime Minister had not taken any steps to secure this valuable concession. Mr. 11. T. Armstrong (Lab., Christchurch East) : They would not have to bring down pensions then. Mr. O’Brien : I believe Britain would have given us the concession if we had asked for it. The arrangement between Britain and America was not called repudiation. he added, bpt because Mr. Lang in New South Wales chose to feed his own people first he was called a scoundrel. Mr. O’Brien referred to the Government members having apologised for the legislation now being considered. These erstwhile Liberals, he said, apologised for their own legislation, which embraced pensions and wage cuts after several years of the greatest prosperity this country had ever known. Had the affairs of the country been well administered there would have been no need to give a second thought to these economies. The assessable income and the deposits

in the banks had increased enormously, while iu eight of the prosperous years the banks had made a profit of nearly £3,000,000. Despite all this prosperity, however, slashing cuts were being inflicted. What was the reason for it? The present Minister of Lands said two years ago the reason was the profligate expenditure of the Reform Government, and he was inclined to agree with him. Turning to the wage cuts, Mr. O'Brien said that although the lower grades in the Civil Service were cut only 5 per cent., the wage tax of 1/- in the £ made the reduction a round 10 per cent. The Prime Minister said if these cuts were not effected there would be many dismissals; but the Prime Minister had said the same thing last year when the cut was proposed, and the upshot was that the service got the cut and the dismissals as well.* This had resulted in a serious reduction in the spending power of the people, with consequent aggravation of an already serious situation. MONEY ON DEPOSIT Reinvestment by Banks INFLATED LAND VALUES Reference was made by Mr. R. A. Wright (Govt., Wellington Suburbs) during the second reading debate on the National Expenditure Adjustment Bill, in the House of Representatives last evening, to the statements of Labour speakers that the wealth of New Zealand had increased by £40,000,000. Was not that sum represented in inflated land values, which they knew to be the curse of this and other countries? he asked.

The House had also heard arguments about the banks overflowing with money, Mr. Wright said. If times were anything like normal that money would be invested in mortgages, farms, and so forth, but when people could not find safe investments they deposited their money in the banks. Even though money were in the banks it was not idle, for it was reinvested by the banks in some form or other. When the banks gave 4 and 4J per cent, for deposits they lent it out at a higher figure. It could not be said that money was lying idle in the banks. The member for Westland (Mr. J. O’Brien) had suggested that one might as well plead to a group of Egyptian mummies as talk to the Government. That was quite incorrect, and there wns not a member on the Government side of the House that did not detest doing many of the things provided for in the Bill. He himself did not like the Bill. If the Labour Party could produce some scheme which would save the country from bankruptcy he was sure the majority of members of the House would support it. All that the House heard was wild and visionary talk about a plan, and from what he could make out that plan was the mobilisation of ciedit. Mobilisation was a military word and he was surprised to hear it coming from the Labour benches. (Laughter.) So far as he could understand the mobilisation of credit meant wholesale borrowing or wholesale inflation. It was the borrowing of the past that was largely responsible for bringing them to the stage they were at to-day. Money had been borrowed, and he admitted a good deal of it had been wasted. They now had to pay the piper, and if they went on borrowing, the position would be worse still.: They all knew the evils of inflation. Dealing with the reduction in rents, Mr. Wright said that as the Bill stood he thought it would be difficult for one or other of the parties concerned to appeal to the court. He hoped the reductions would apply to all tenancies. As far as the reductions in general were concerned he hoped the benefit of them would be passed on to the public. It was the intention of the Bill that reductions should lie passed on. If that were done they would perhaps be on a lower level, but the standard of living would not be greatly affected, although less money might be handled. He was hopeful of the future and believed that they had now reached rock bottom. This winter would be a distressing period, but after they got through that he believed there would be a glimmer of light. INTERNAL NEEDS Government Policy Attacked MR. SEMPLE’S SPEECH The opinion that the welfare of the 1 pensioners and workers of the Dominion should be considered before the Government insisted on paying money to overseas financiers, was expressed by Mr. R. Semple (Lab., Wellington East), in the House last evening, when discussing the National Expenditure Adjustment Bill. He attacked the Government for its wage and pensions proposals, which were declared to be the only means of restoring equilibrium. Germany had been loaned £110,000.000 bv London financiers, yet the ex-soldiers of New Zealand were to be robbed of a part of their pittance to pay these same financiers in London, Mr. Semple said. First things came first, and the first thing New Zealand should do was to feed and clothe its own people. The overseas bondholders could wait if the pensioners of the Dominion, who had served their country, were to go short because interest obligations were to be enforced. The Minister of Lands had said the Bill would restore confidence, and result in money being brought out into circulation again. Did he mean that the ' country had to rob the widows and orphans, the soldier and miner pensioners, that they had to attack the kindergartens and family allowance, and to take money from the old and crippled in order to do that? Was there no other way that the money could bo brought out of “cold storage” than by inflicting social torture? Policy Details Withheld. The Prime Minister said the Government. was keeping to the straight road, inferring that any other road was crooked and that there was only one road to follow —that being mapped out by the Government. The Government had not told the people at the elections that it would take the drastic steps now proposed. All the details of the policy had been withheld, and all that the Prime Minister had said was that ho would do the right thing to restore whnt he called stability. The proposals had •been kept in the background, and the very reason for withholding the Government's intentions was to secure the “blank cheque.” There had been a definite betrayal of confidence and the Government had no right to put into effect a policy about which the public knew absolutely nothing. They had been told the financial position of the country was in a .serious state. It wns true the country was passing through a world-wide crisis, but one had to nsk who had been responsible for the immediate position in New Zealand. During the war period the Government of the day made fearful blunders, hut if anyone had then dared to disagree lie would have been regarded as a criminal and imprisoned. ■ If it wns a fair thing to . conscript a man’s body, it wns equally right to conscript wealth from those who had made huge profits. The crisis had not been accidental : it had been caused through the blunders of the politicians who had borrowed £50.000.000 during the war. and by the men who' had extracted millions of pounds from the people in wnr profits. A Question of Trust. The Minister of Public Works, Rt. lion. J. G. Coates: The grapes are sour. The country did not trust the s hon. gentleman. “Just ns many people trust me as trust you,” Mr. .Semple said. “The hon. gentleman need not make that interjection. The men on this side of the House represent, the confidence'of nearly 250.000 people, and by all the rules of the game,

crooked and otherwise, they tried to get me out. If they had put this programme before tlie electors they would not. be on the Treasury benches to-day. I make this definite challenge to him: Will lie and his Government go to the country and get the endorsement of the criminal tilings tliey are doing to-day? Tliey concealed from the people the cruel, wicked and reactionary programme. They dare not go to tlie country. By those methods they got into power.” INFLATED STANDARDS False Prosperity Ideas REPLY TO LABOUR VIEWS Some of the arguments used by the critics of the National Expenditure Adjustment Bill were replied to by the Minister of Internal Affairs, Hon. A. Hamilton, when speaking during the secondrending debate on the measure in the House of Representatives last evening. The Leader of the Opposition, he said, had advocated a steeply graduated income tax but that was already in operation. There was no doubt, in the minds of think:ng people that New Zealand wns on an inflated standard in comparison with the stniuTurd in Clrcflt Britmii. Wlmt vrlug was there in maintaining a standard higher than Great Britain enjoyed? he asked. The Labour Party contended that New Zealand could enjoy local prosperity despite the world depression, but that seemed to him to be a contradiction of terms. The Bill was designed to meet conditions in New Zealand to-day. The Labour Party would demand nnd accept benefits when prices were rising, but objected to adjustments when prices were falling. If services were increased in prosperous times surely it was not morally wrong to reduce them in times of depression.