BUDGET ATTACKED

Dominion, Volume 32, Issue 262, 3 August 1939, Page 10

BUDGET ATTACKED

Taxation And Public Credit LABOUR’S PROMISES Failure To Make Them Good Charged “This is the breach of promise Budget,” said the Leader of the Opposition, Mr. Hamilton, when opening the financial debate for the Opposition in the House of Representatives last night. Mr. Hamilton detailed a list of promises made by the Government, and claimed that in each case it had failed to make its promise good. “The Government promised not to increase taxation,” Mr. Hamilton said, “but it. has actually been increased by £16,000,000 a year. It promised to use the publie credit, but new loans are being raised in London and in New Zealand and further internal borrowing is contemplated. The Government promised to reduce overseas debt, but it has just borrowed £9,000,000 iu London. It said it would not increase the cost of government, but actually it is up by £28,000,000 a year. “What lias happened to the Government’s promise to cure unemployment?” Mr. Hamilton asked. "Last year £6,500,000 was spent on the relief of unemployment. To provide free doctors it promised to set aside £1,200,000, but actually only £100,009 has been provided for that service.” “If the medical men agreed to provide the service the money would be there,” said the Acting-Leader of the House, Mr. Fraser. Mr. Hamilton said that the Government had promised to increase production, but because its policy had made unproductive work more attractive production was falling. » It had promised houses for 12/6 a week, but. the rents of Government houses ranged from 16/6 to 32/6 a week. Contradictions.

The Budget was one of contradictions While the Government claimed to be trying to raise the standard of living generally, the taxation proposals of the Government were a direct blow at the standard of living of a typical New Zealand family. The Budget drew attention to the necessity for tapering off public, works, but the public works proposed were on the same large scale as hitherto, so that the statement in the Budget was just another example of platitudinous talk that, had no expression in practical or constructive effort. The Government talked about the necessity for reabsorbing men into industry, but one of its most recent acts had been to introduce a scheme for the relief of unemployment in which between 600 and 800 men were to be provided with work constructing tracks for hikers over the Cashmere hills in Christchurch. In addition, the Budget singled out the primary producer for further increased costs. Examining the increase in the cost of government, Mr. Hamilton said that Parliamentary votes, both permanent and annuaj, had risen from £25,890,000 in 1935-36 to £38,042,000 in 1939-40. In the same period public works expenditure had gone up from £10,450,000 to £23,917,000, and unemployment and social security costs from £4,882,000 to £9,000,000. The Government had actually increased the cost of running the country by 70 per cent., and had robbed almost every hen roost in an endeavour to stem off the day of reckoning. New Zealand had certainly sown its financial wild oats in the past few years. The Prime Minister had said that borrowing meant debt in perpetuity. Mr. Hamilton added, and as recently as December of last year he had scouted the idea of borrowing overseas, but now it had actually done that. Mr. Lee (Government, Grey Lynn) : Because of the gangsters aud footpads who raided us. Public Debt Increased. During the past four years, Mr. Hamilton said, the Government had increased the public debt by £46,000,000, taking into account the £24,000,000 to be borrowed this year. That was the Government whose Prime Ministe 1 * bad stated that borrowing was debt in perpetuity. Reference was made by Mr. Hamilton to what he described as unfavourable financial alterations during tinpast year. These included the increase in the Reserve Bank overdraft and the note issue, decreased post office de posits, the drop in London funds, the increase in the local body interest rate, the deficit in the Dairy Industry Account, the increase in the national debt, increased unemployment expenditure and borrowings, and a flight of capital. These were very serious changes in the financial structure of New Zealand, and it was no wonder the Government was in a tight corner INTERNAL LOAN Question By Mr. Hamilton Curiosity as to who it was oversubscribed the £4,500,000 internal loan raised by the Government recently was expressed by the Leader of.the Opposi tion, Mr. Hamilton, when ofteiiiug the debate on the Financial Statement in the House of Representatives last night. He inquired whether the loan had been oversubscribed voluntarily or whether the big financial institutions had come to the Government’s rescue Very likely it was the big institutions who had saved the Government's face lie said.

Referring to the national savings scheme mentioned in the Budget. Mr Hamilton said the Government was now after the small fry. < It was trying to encourage the wage-earners to save, whereas a few years ago it had put forward the philosophy that the people had to spend their way to prosperity. Mr. Carr (Government, Tiinaru): We have given the workers something to save. Land settlement. Mr. Hamilton said, had received very scant consideration in the Budget. Why. he asked, had Hie Government not stated what had been done last year in the way of land settlement. He was sure that if it had had any good news at all on that sub ject it would have trotted it out