FINANCE MINISTER'S REPLY

Evening Post, Volume XCVIII, Issue 79, 1 October 1919, Page 3

FINANCE MINISTER'S REPLY

WAR PURPOSES SURPLUS.

The Minister of Finance (Sir James Allen) said he did not know whether to take the Leader of the . Opposition seriously, for the latter had started off by being doleful about the expenditure proposed, and then at the end had advocated ali ; kinds of nationalisation and other large expenditure. The £15,000,000 surplus, of which Sir Joseph Ward had made so much, was not a sinking fund, and had been accumulated simply to be used as it was now proposed to use it. Those moneys had been provided by the taxpayers ! for war purposes, and not for beiiig put into a, sinking fund. They proposed that some twelve arid a-half millions of the accumulated surpluses should be used for the repatriation of soldiers—the most important work the country had to do. Where did the Leader of the Opposition propose to find the mo;ney if not'in this way? They were raising a £10,000,000 loan now. The Leader of the Opposition raised a. doleful cry about that, but he thought it would be found that the people had made a satisfactory response. He believed there was no better use for these funds than for investments as advances to soldiers for the purchase of lands, houses, and settlement generally The, interest came into the Consolidated Fund, as it would from any other investment, and' the capital sum was assured. Sir Joseph Ward suggested that the amount for soldiers' settlement* should be cut ! down by half. They w^re spending at ! the rate of a million a month now, 1 and it was claimed they were going i too slowly. What would the soldiers say if th&y were to reduce the amount and slacken the progress ? He did not see how the Leader of this Opposition's proposals would reduce taxation. The sinking fund of war loans, it was provided by statute, should ha ! per cent., which would repay the am cunt in about forty years. It was not too much to ask the people of the country; to bear the cost of the war for forty years. Sir Joseph Ward's proposals would increase the burden upon the people at present in-order|that'the loans might be paid off earlier. NOT A FAIR COMPARISON The Leader of the Opposition's references to the average expenditure on the war was not fair, as the .expenditure.was much heavier in the later than in the earlier years. The table in the Budget as to obligations showed that they could not afford- to borrow money for soldier settlement* and it was necessary to take it from the accumulated surplus. ■ The sum for public works was exclusive of the provision for school-buildings. The Minister of Public Works was satisfied that the amount proposed was sufficient to carry on until August of next year. If more were required for hydro-elec-tric works provision would be made in a Bill which was to, be brought down. The proposals with regard to housing would be made known in. a Bill to be brought down shortly Railways, roads, , and bridges were provided :for under the ! heading of public works. Sir Joseph Ward had said too mud. was being taken for land for soldiers; and that half the soldiers would be ofl the land in four or five years; That was answered by a quotation. from Sir Joseph Ward's own policy statement, in which he said that money borrowed for land settlement gave a return to the' Consolidated Fund, and would' not result in extra taxation. He believed that it was a, wise policy to increase the reservu fund securities to two millions.

NEED FOR INCREASED POPULA-

TION

.As to the references to a surplus of three millions, so far as his knowledge went to-day there was not one million ox* two millions up the sleeve of the present finance Minister. Revenue and expenditure had been carefully estimated. When he received the Budget it showed a deficit, but a careful adjustment had '.beenina.de to alter this. No one-would be better pleased than he if at the end of the year lie could announce a large surplus. He .only wished that they were in a position to reduce taxation. If they had a large surplus* this might be done, with increased production: But they must have move population. It was no use talking about the expenditure of millions, unless they had labour with which to spend the money As illustrating the labour difficulties I/he Minister referred to the cual t&oxtige. fhoy had tried to secure coal-minere, both from

Great Britain and Australia, and though some were available in Australia some of their friends here stopped them. Mr. Semplo: "You ought to provide decent houses."

Sir James Allen: "At this time there were houses available."

Mr. Semple : "That is not true."

Mr. Speaker: Order ! Order!

The Minister alluded to the position of the various superannuation funds on the lines of the Budget references. He stated that in 1912 he . saw the need for a thorough actuarial investigation of the railways fund; but it had not been carried out in the.meantime, and they had now to provide £75,000, so that the capital might not be trenched upon. They were also making grants to the Public Service and teachers' funds. LEGITIMATE USE OF SURPLUS.

Sir Joseph Ward's proposals were that, instead of using the funds"accumulated from revenue for war purposes, they were to borrow on the London market. Tie did not know what the underwriting would cost, or what' the discount or' interest would be; nor did he think it fair, if they had this money, that they should go to the Mother Country, which needed all the money it had. The accumulated surplus .was there for the. legitimate purpose of war expenditure. • •

He did not know whether the lion, gentleman was serious ,in his suggestion that by nationalisation of J.he coal mines they were going to secure a quarter of a million for the Consolidated Fund. He did not know what was proposed by:nationalisation. What mines did Sir Joseph Ward propose to take. He knew something of mines, aiid he could assure the House that no statement would be more satisfactory to the mine-owners than that the State proposed to. take their mines.. k Mr.: M'Callum : "I< depends on the price entirely.'1 .'■'■■

Sir James Allen : "I know, and ■ I warn members and the public against being persuaded into State purchase of the mines." .

Sir Joseph Ward's high finance waa to obtain a million from investments in London. There was three-quarter of a million from the accumulated surplus, and he proposed to add five millions to the reserve to obtain the other quartermillion.. Where was he going to obtain that five millions ? If he was going to borrow it, what would it cost him, and what return would there be above- the cost?

; Sir Joseph Ward.made a personal explanation that the sinking fund he proposed, apart from war loans, was for 63 years. He , did not say that there was too much for public works. The debate was adjourned, and the House rose at 9.40 p.m.