ON A STRONG BASIS

Evening Post, Volume XCIV, Issue 59, 7 September 1917, Page 3

ON A STRONG BASIS

NEW ZEALAND FINANCE

LOCALLY-RAISED LOANS

SIR JOSEPH WARD ON THE

PROSPECTS

ABNORMAL DEMANDS AND A

FINE RESPONSE.

When the Finance Bill came up for its third reading stage in the House of Representatives yesterday afternoon the Finance Minister (Sir Joseph Ward) made a speech which was of considerable importance and interest.

He expressed appreciation of the way in which the House had dealt with such a very difficult measure, and he was very pleased at the shape in which it had emerged from Committee. Some points were' still liable to review, and those would be .considered while the Bill was passing throagh the Legislative Council. As to the cost of living, he said that the decreases in taxation asked for since the Bill came before the House amounted to £1,840,900, and it was absolutely impossible to meet that demand. The legislation that was before the House was brought down for war purposes; as a matter of fact it was war finance. The requirements of the country during the war were abnormal; they were abnormal because the conditions were abnormal, and the provisions proposed were designed to enable the Government to deal satisfactorily with the situation. New Zealand "must not be in any position of uncertainty in regard to finance. We must be sure of our ground. It was not in any way like normal finance. In normal times such proposals would not be submitted. Sir Joseph Ward contended that it was useless to go on with tho profits tax. They must depend on the land tax and the income tax. In any case they must make certain that they were going to get all the revenue they required. If the war profits tax was added they would have to reduce the land tax and income tax and mortgage tax, which fell on the same people. The Government might have to ask the people to meet further obligations, and heavier obligations. Bnt the present financial structure w&s founded on a basis of great solidity, and members should remember tiro herculean task that the people of New Zealand had undertaken and the readiness they had displayed in meeting the increased taxation.

FINANCIAL AID.

Sir Joseph Ward added that he wanted members to realise that there were tremendous things being done for the people of New Zealand, due very largely to the troubles caused by the war, and that some of those things could not be done without financial assistance being derived from avenues which were only now available. . , „ In regard to soldiers' pensions, he said they could not afford to have any sentimentalisro. It had been no pleasure to him to resist pressure in this matter. As the result of necessities and a strong sense of duty, he had had to consider the matter from the point of view of the financial stability of the country.

NEW ZEALAND SOLID.

There could be no doubt that New Zealand was on the strongest basis of any of the countries engaged in the war, and, it required to be in that position more than any of the others. It was thousands of miles away from the scene of operations, and its populatien was only just over,a million. New Zealand was an exporting country, and would very quickly feel any difficulty in regard to the supply of steamers for the carriage of our produce. For that reason it was absolutely essential that New Zealand should be in a position to face years of difficulty. He felt confident that at the end of the year he would hay« a considerable surplus. When, the war was over the surplus which had been built up in London would come in very useful in paying off our loans and developing our resources. ;

LOCAL BORROWING.

The War Loan, Sir Joseph Ward added, had been a great success, and the point they were entitled to learn was that in the future the country should go in for raising loans loca%. New ZeaJand would have to depend on itself for raising its loans locally for its own internal purposes. He was surprised to find how many people had subscribed to the loan in sums of £100 and up to £1000. In that respect the result had been quite remarkable. It was splendid to find what a number of people of small means had subscribed. . ' .

NATIONAL CABINET CRITICISED.

Mr. J. T. M. Hornsby said he was .keenly disappointed in the step taken by the Government in imposing the tea tax. He had been an unwilling adherent to the National Government, but he gave in his allegiance because ( of the agreement that the cost of. living was to be decreased. That agreement had been broken, and he had to state that he could no longer be relied upon as a supporter of the National Government. The sum of £90,000 was to be provided out of the taxation, but people who drew revenue from shares in companies had been granted exemption, up to £400, although they did not earn those incomes. He went on to urge that the purchasing power of the sovereign had nove been reduced to about 13s, so that even with the increase of 5s on pensions the pensioners were still about 2s short. The Board of Trade was a farce, just as he ha-d said from the beginning that it would be. The Government had broken its trust. ' The people were suffering from the operations of gangs of' people who were robbing them, "and we stand silently by and see this sort of thing going on." From his place in the House he said he could not now bo considered a follower of the National Government, although he was prepared to support it in matters relating to defence.' By increasing the tea tax .the Government had increased the cost of living.

TOO MUCH HASTE.

Mr. W. H. Field expressed the view that the Bill was being unduly rushed through the House. He failed to see why more taxation should not be imposed on motor-cars—those which were used for pleasure purposes. After reading correspondence which he had received from Sir Joseph Ward, Mr." Field said he was quite sure that all farmers were only too anxious to pay their share. He agreed with the -proposal to increase the tax on tea.

Further discussion evoked the expression of opinion by Mr. R. A. Wright that, from the Minister's point of view, tho tax was a sound argument, but there were medical reasons why the tax should not be adopted.

COST OF LIVING.

Mr. J. .M'Combs complained of the increases that had taken place in connection with the pi'ice of commodities. Ho referred to the constraint to which the Board of Trade had been submitted by those who had authority. Mr. M'Combs also dealt in detail with the taxation proposals of the Government,

, and quoted a case in which a firm which ■ last year had, under the excess profits tax,' to pay £25,590, and this year only had to pay £20,922. In another case the taxation of an individual would be changed from £1152 to ,£1431. He contended that the taxation on the salary of a wealthy man by way of income tax was nothing like so hard as that of ithe man who had to spend all his earnings in directions I which meant an increase of the Customs returns. He added that the wool export' of New Zealand in 1916 was six and a-half millions more than the amount exported in 1913, and he reckoned that the producers of New Zealand had I made a profit of some £20,000,000 as the result of the war. ! COMPLAINT OF DELAY. ! Mr. H. G. Ell contended that the Treasurer's proposals would extract more taxation from the wealth of the country than the proposals of last year. The action of the Government in dealing with meat and hides and sugar, and so on, had resulted in a great saving to the country, which was paying far less for produce of certain kinds than was being paid in England or in Australia. He complained that there wafi no sign of the new Parliament Buildings being ready for use next session. He remarked that he had seen one man employed on the Speaker's end of the building. At the present rate of progress the building would not be ready until 1920. He complained that the dawdling in connection with the building was deliberate, and thai 45 roome would be available in a few months if the work was carried on expeditiouely. OVERRIDDEN?

Mr. Hindmarsh said it was all very well to suggest that the Bill was "a marvellous Bill" as far as taxation was concerned, but the Minister had gone out of his way to meet the men who paid thfe mortgage tax. He was perfectly certain that the LibeTal section of the Government should not be overridden by the other section of the Government. The Hon. Mr. Mac Donald was not worthy of. his office

Mr. Speaker: Tha honourable membei is departing from his subject. Mr. Hindmarsh retorted that it must have been very humiliating to the Minister of Agriculture to be thrust aside by the Prime Minister.

Mr. P. C. Webb said it was strange that the Ministers had not dealt with the figures that members had referred to.

Sir Joseph Ward : Nonsense. I have referred to them half a. dozer times in the course of the debate.

Mr. Webb went on to complain that, tons of cheese had been sent to the destructor instead of being sent to the homes of the people.