THE BUDGET

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

THE BUDGET

OPENING OF DEBATE

SIR JOSEPH WARD'S VIEWS

DISPOSAL OF ACCUMULATED

SURPLUS.

Tho debate upon tho Financial Statement was opened in tho House of Representatives last night by tho Leader of the Opposition (Sir Joseph Ward). Tho Minister of Finance (Sir James Allen) replied.to tho criticisms offered, and the debate was adjourned at 9.40 p.m.

Sir Joseph Ward '(Leader of the Opposition) said that he did not propose to discuss the Budget up to 31st March, 1919, as he was Minister of Finance at that time, and it would not be propel" for him to discuss what happened then. The country, he said, however, had a right to be congratulated upon the fact that it had a surplus after four and a-half years of war of over £15,000,000. When lie had taken over the portfolio of Finance the surplus of his predecessor was £72,142, and the great balance had been built up while he himself was in charge. NOTE OF WARNING: BUT Referring to the Government's proposals, Sir Joseph said he wanted to point out that, although the Minister of Finance had .expressed a note of warning, there was no indication that he had made proposals that could be called safe. By way of comparison, the proposals ci the Government exceeded by a great deal anything suggested during the war. The total raised in New Zealand during four and a-half years for war purposes was ,£42,000,000, making an average of £9,000,000 odd per annum, whereas the Minister of Finance was now proposing to expend £29,326,000 for 'soldiers, £500,000 for public works, £500,000 for rducation buildings, etc., and £600,000 for hydro-electric works in the coming financial year. Incidentally, he said, it was surprising that throughout the Budget there was no mention of any definite sums for the providing of houses, for roads, bridges, telegraphs, and telephones. Again referring to totals,. Sir Joseph Ward said that when the figures were totalled up, it would be "found that the borrowing proposed this year, exclusive of the £12,500,000 from' the surplus, would exceed by ten millions the average borrowing of any of the war years, wherefore he felt that he was right in saying | that there was no indication of that , thrift the Minister of Finance had ndvo- I niitod towards the end of his Budget. ■ Referring to soldier settlement, he said ' the Government was driving the country "headlong to destruction by its policy. The Government was asking for ' f114.000.000 to place men on the land quickly; but to his mind the country, while determined to give the soldiers every opportunity to go on the land, should not hurry the process. The settling of soldiers should be done gradually to .prevent the rapid appreciation of values seen in recent years, which was not fair to the soldiers, and was putting money into the pockets of a few landholders. ' TOO, MUCH FOR ONE YEAR. That brought him to an aspect of the financial proposals on which he had a very strong feeling, on the grounds of the future of the country. They ought not to expend more than £7,100,000' this yeai on soldier settlement, leaving the balance for future years. This country could not stand having £29,000,000 (less £12,000,000 taken out of the accumulated surplus) placed on the market ir New Zealand. Financial men would tell, the Minister that there was an un^ willingness to subscribe to loans, not from any lack of patriotic motives; and were it not for the 'use of compulsion they would not ■ have the money Did the Government propose to continue the compulsory system ? He wae .responsible for initiating the system, so that they ' might have tho money required for the I war; but he would never have contemplated exercising those powers one day after the last war loan had been subscribed. If we were to continue the compulsion system in peace time, v,e would have financial panic before we knew where we were. There would be 1 financial stringency for the merchant and the trader in thte country. The Minister of Finance, as an. excuse for taking money from the accumulated surplusone of the worst proposals ever madesaid that it was impossible to borrow money outside the country. He entirely dissented from that statement. Take the item £600,000 for hydro-electric loans. When in London he had arranged for million for ■ the Southland * and Otago schemes on terms as favourable as those on which ■ the British. Government obtained the money. Had the Minister any information which warranted him in saying that they should not go on the London market? Had the Ministei gone on the London market for the two millions for- lands for settlements, the-money for public works, hydro-electric works, and school buildings—a total of £5,190,000—he undertook to say he could have borrowed it in four or five months without trouble, and on favourable terms. Had they then halved the amount for soldiers' settlement they woxild have had to borrow only £12,290,000, and they could have kept in England the accumulated surplus raised by taxation as a sinking fund. HANDS OFF THE SURPLUS. , Regarding the proposal to take twelvemillions from the accumulated surplus, 1 Sir Joseph said that when Mr. Ballance I took £200,000 from the Sinking Fund, the then Opposition did not leave him alone for months. If the opportunity ever occurred to him again, ho would tie up that money for sinking funds, so that no avaricious Minister of Finance could place bis hands on it, and thus avoid drawing upon other resources for money. What incentive was there to any Minister of Finance to make provision for sinking funds and redeeming obligations, if another Minister was to come along and do this terrible thing, and seize the whole of the amount in two months ? He was glad to see that the Minister proposed to strengthen Now Zealand's position by_ investing £1,200,000 in Imperial securities, but he disapproved of the way in which it was done, by taking the money from the Sinking Funds. It had been his policy to provide a strong reserve in England, but he had not found j the money 'in this way

The Minister of Finance estimated that he would have a surplus of £478,000.. In the balance, he had here three millions preserved that would be available at- the end of the year. Sir Joseph said that lie himself had never made an under-estimate in his Budgets during the war period, and he challenged i\w Minister of Finance, to say that he had not got from two to three millions up his sleeve. He believed that they could reduce taxation, but not in this wa-y. The position was so serious that the Minister did not pufc it in the Budget.' NEGLECT OF PUBLIC WOKKS. Did the Minister of Finance augyesi' thai. £2,090.000 would be sufficient for all the requirements of railway construction, arterial roads, telephone and telsgraph extensions after years of war, in which expenditure lud been severely curtailed? There' was no mention of

money for workers' dwellings. Nor did the Budget disclose the financial position of the country. The country had an indebtedness of 200 millions sterling, and was well able to bear it; but they must know where tljtsy stood. The surplus w-hiSh the Minister proposed to take ■would have brought in at least £750,000 a year in a few years' time. Had he continued in the Government he would have added £5,000,000 to the sinking fund to make the return one million.: He wonld have earmarked that sum for advances to eoldiers, settlers, workers, and local public bodies. Was it not prudent for them under the circumstances to reach out for other avenues of revenue?

NEW .AVENUES OF WEALTH.

■ They should have a State bank, which would bring them an. immediate return of half a million sterling apart from the secret: reserves. There were other means by which he considered the country could increase its prosperity and decrease the taxation chargeable. Personally, he thought that if the hydro-elec-tric power schemes were pushed ahead the Government would soon be making a profit of eight per cent., while if the State controlled the coal mines of the country, he estimated that it wouldsecure in profit an additional £250,000 annually. Incidentally, too, th& conditions of those working in the mines could be improved and prices to the consumer lowered.

Referring to taxation, Sir Joseph said ho had looked forward to the return to ordinary taxation within six months after the war,' but the Minister of Finance had disappointed him. He did not think it was possible to get back to normal pre-war conditions within twenty-five years, and if the Minister of Finance was ,waiting for that before he readjusted taxation it would not be of much benefit to the present generation. He again condemned the financial proposals of Sir James Allen, and pointed out that in the proposals he himself had put before the country recently, he had suggested an expenditure of £7,000,000 annually steadily. The country, he continued, should have its railway lines completed within the next two or three years.

Sir William Fraser: "We have not the population to do it." Sir Joseph Ward said he had been in countries where it had paid to send the railways out into what appeared to be nowhere. :

Sir William Eraser: "We have no labour." •

Sir Joseph Ward: "I say we ought to go in for a progressive immigration policy "■■■■•■.■■ "' .

Sir William Fraser: " Quite so. Exactly. We. noed this labour." Continuing,. Sir Joseph said the expenditure of £800,000 would complete the South Island Main Trunk line.

The Prime Minister: ■.'," You can have the contract at. that figure to-morrow with pleasure." (Laughter.) In conclusion, the Leader-of >the Opposition again appealed to the Minister of Finance not to deal with the accumulated surplus as proposed.