SCOPE FOR SAVING

Dominion, Volume 33, Issue 3, 28 September 1939, Page 11

SCOPE FOR SAVING

Expenditure During Rest Of Year

ADJUSTMENTS URGED

Attitude Of Opposition

Leader

If the Government had transferred to the War Expenses Account some of the expenditure of £75,000,OCX) it proposed for this year, it could have got through at least the rest of this year without calling on the people for more money, said the Leader of the Opposition, Mr. Hamilton, during the second reading debate on the War Expenses Bill in the House of Representatives yesterday. Mr. Hamilton said that the country entered the war with its finances not in a healthy condition after four years of heavy spending by the Government.

Mr. Hamilton suggested that the House might be presented with a complete picture of the legislation proposed for war purposes, as it was at a disadvantage in trying to debate these measures piecemeal. There might, for instance, be highly contentious proposals in the section of the Bill relating to the Reserve Bank. The House should be given some knowledge of what extra taxation was proposed, and also of what it was proposed to do with the produce of the country. “The sale of our produce will be a big deal,” said Mr. Hamilton. “It will vitally affect the wellbeing of the country, and the Minister would be wise to consult the producers as much as possible. Already we hear various rumours about the freezing works and about methods of handling our produce, and these rumours are apt to be disturbing till we know exactly where we are.” Tins Year’s Expenditure. Expenditure proposed by the Government this year was £75,000,000, said Mr. Hamilton. Similar expenditure in 1914-1915 totalled £15,900,000, and in 1918 £18,364,000. War expenditure in the last war amounted to about £16,000,000 a year. It was not a cheap war, as there were about 100,000 men overseas, ,and it was a question whether New Zealand would have to enter into such heavy commitments this time. “.If the Government transferred some of this £75,000,000 one would imagine that it could at least get through this year without having to call on the people for more,” said Mr. Hamilton. The taxation increases recently made were not the first this year, he continued. The Budget provided £2,500,000 more taxation, and with the new taxes, this meant that people had to find an extra £6,226,000 for the year. “Tins is a hefty increase,” said Mr. Hamilton, “but the people will willingly pay if they are satisfied that the Minister is careful with his other expenditure.” The Government’s weakness was that the country’s financial resources were already partially depleted, said Mr. Hamilton. New Zealand was entering the war not with its pockets full and its taxable capacity high, because after four years of spending the country was handicapped badly. The Reserve Bank was already being leaned on fairly heavily, and it was a question how much that could be extended safely. Money had left the country, departmental balances were depleted, and the internal loan had taken .money out of private hands.

Public Works and Social Services. Expenditure on public works and social services bad increased from £25,000,000 to £38,000,000 since the Government came in. The public works expenditure was largely on non-inter-est bearing works. Roads and railways between them were to take £12,000,000 this year, and surely that sum was not essential. If something could uot be saved out of this amount, the public would not be satisfied. The Government could cut this sum down by £5,000,000 to £10,000,000, and if it did so, it would have the full support of the Opposition. Beside a cut in public works expenditure, there should be cuts in relief expenditure, and some adjustment should be made in wages and conditions under industrial awards. The country's two essential services, defence and farm labour, were assessed at about 11/- a day, so there was plenty of room for others to be adjusted. Sacrifice should be universal, and nobody would object if it was fair. Mr. Hamilton questioned if there was any need to borrow when savings could be made in other directions. “Ha's the Minister made any arrangement with Great Britain about loans”? he asked. The Minister of Finance, Mr. Nash: No. None. Mr. Hamilton: Will soldiers have to pay income tax? Mr. Nash: We propose to relieve sol-

diers overseas from -paying income -tax on their pay. . Mr. Holland (Opposition, Christchurch North) : On seven bob a day they won’t be paying any tax. Mr. Nash: Would you suggest that a man liable for £2OOO tax here should be freed if lie is overseas? Mr. Holland: I would free him.

Mr. Nash added that similar arrangements for the relief of soldiers overseas from death duties would lx? made as were made during the last war. Mr. Hamilton concluded by saying that some definite undertaking should be given that war taxes would immediately be withdrawn at the end of the war. “We should then revert at once to pre-war conditions,” he said. REDUCTION URGED Public Works Expenditure MR. FORBES’ ATTITUDE “No doubt we are just starting out on the expenditure that will be required for the prosecution of the war. There may be differences of opinion on how the money should be raised, but on the general principle I think the people of New Zealand would be prepiu’ed to sacrifice a great deal to assist the Government to do its part,” said Mr. Forbes (Opposition, Hurunui), speaking in the second reading debate on the War Expenses Bill in the House of Representatives yesterday. Mr. Forbes said the country was starting off behind scratch so far as normal conditions were concerned because of the past policy of the Government and its expenditure. The feeling of the people was that with the extra strain on the finances a reduction should be made in public works expenditure. A substantial reduction should be made and could be made. The Government should not shrink from difficult things, Mr. Forbes said. It should give evidence to the public that it was exercising every economy it could. The question of expenditure and economy went hand in hand. The Minister of Finance had to convince the people that he was doing his part in handling the finances of the country and show that there was a difference between the country on a peace footing and the country on a war footing.

PATIENCE ADVISED

New Zealand’s Part In War

ECONOMIC FRUSTRATION

The importance of patience at present if New Zealand is to play its most effective part in the defence of the Empire was emphasized by Mr. Lee (Government, Grey Lynn) during the debate on the War Expenses Bill In the House of Representatives last night. Not only must Britain win the war, he said, but it must be careful to conserve all those things that were worth defending.

“I think we must avoid getting ready to hit the 'target and then keeping the people with their finger at the trigger,” Mr. Lee said, “and I believe that the moment we know just what we have to do New Zealand will respond magnificent. If this war lasts a long time there will grow up a war weariness which we must do our best to combat, because we must prevent anything in the nature of anticlimax. Till we know we are going to have an opportunity to hit the enemy, however, we must wait.”

War was the key industry today, Mr. Lee added. It must be realized, however, that in this war it was necessary not only to destroy the creature called Hitler, but also the conditions that had enabled Hitlerism to rise in Europe—misery and starvation in an age of plenty. Otherwise, future Hitlers would arise as quickly as their predecessors were eradicated.

Why was it necessary to place the burden of this war on posterity? Mr. Lee asked. Why pay interest on war destruction? Why not end the war without debt so that people would not have to engage, in that sort of economic frustration that drove them into the hands of Hitlers. “We have not only got to win this war,” he added, “but we must come through with a system that, will give an opportunity to young men and women which we did not have after the last war.”

The Local Legislation Bill, the Otago Presbyterian Church Board of Property Amendment Bill, the Waikato Airport Bill, the Lower Clutha River Improvement Amendment Bill, and the Native Purposes Bill, were passed by the Legislative Council yesterday.