AGAIN ADJOURNED

Evening Post, Volume CIV, Issue 10, 12 July 1922, Page 9

AGAIN ADJOURNED

ADDRESS-IN-REPLY,

FINANCE AND TAXATION

PROPORTIONAL REPRESENTATION ISSUE. A further five and a-balf hours was given to the Ad dress-in-lleply debate in the House of Representatives yesterday. Seven members, including the Minister of Lands, spoke, but when the House adjourned just before U a'clock the division on the amendment moved by the Leader of the . Opposition had not been reached. Mr. J. A. Young (Waikato) dwelt mainly on taxation, which, he said, was far too heavy., ■■. During the war the country bad been extremely prosperous, but it had been largely an artificial prosperity, in that the country ■ had been living very largely on credit 'and borrowed money. Now it was necessary to get down to real business. The «iaxiinum rate of taxation had been 8s 9d in the S, but in many cases this had been raked to over 10s in the £ because the companies had to pay land tax as well as income tax. The Government had thereby become an equal partner in many businesses. 'It was . wrong that companies should not be allowed to sot off against their income the amount paid in land tax. Another anomaly was the positron of a man making a profit in one part of his business and a loss in another—he was not at present allowed to sot off the loss against the profit, despite the fact that in some cases the loss swallowed up the entire profit. Taxation undoubtedly raised the cost of living. It was a fallacy to say that it was impossible to tax large incomes too much; excessive taxation came right back to the consumer. He defended the giving of „ the rebate of 10 per cent, on land tax as one means of meeting the deflation of land values. The Leader of the Opposition : "What do you think of the 5 per cent, on income tax V Mr. Young : "I have mentioned that . . . when I expressed the opinion that taxation is too high. That takes with it my bob'ef that the rebate of 5 per cent, is quite justified." Passing to the cut in the bonuses of Civil servants, Mr. Young expressed the opinion that the Government' was wise in trying to live within its means. The Government might be wrong in regard to details—he did not, agree with it on every point— but the principle involved was sound, " and was one which should be adopted by everyone. This was a time when one and all should .' examine their positions and so arrange their finances as to live within their incomes. He looked for caution in State borrowing. Referring to the expiry of tho moratorium in De J, cember. 1924, he said that while he did not look for a straight-out extension, he folt that something should be, done to assist those who, struggling hard, were just able to meet interest charges. There was need, he said, foT an amendment of the bankruptcy law to prevent the fraud which was being practised in tho matter .of unregistered mortgages. He supported the following of an immigration policy, but "the new-comers should be men who would add to the country's economic^ strength. .' More of: the back ; country had to be owned np. UNANSWERED CHARGES. Mr. T. E. Y. Seddon (Westland) said the Leader of the Opposition had incorporated in his amendment some of the most serious charges ever levelled against a Government in New' Zealand—so far there had been no reply. In particular, he referred to the promised reform of the electoral system, and said that so far there had not been substituted some fairer method for the first past the post, •which resulted in nineteen Reform, six Liberal, and five Labour members sitting in Parliament as minority representatives. No convincing arguments had been advanced why proportional representation should not be adopted. The Prime Minister, by interjection, had referred to " any idiotic system," but he must have overlooked the eminent people of Britain who we/c keen supporters of the system. Mr. Seddon read the portion of the amendment referring to bad administration of the finances of the country, for which indictment, he claimed, support had been forthcoming from the last Government speaker, who had spoken of the country as having lived on credit and borrowed money. The Government had gone the wrong way about meeting difficulties; the Railway Department, for instance, whenever business fell off, increased charges, whereas the normal business man in such circumstances would reduce his charges to a reasonable thing, and thereby increase returns. The Government, he said in referring to soldier settlement, had made a mistake in not buying land on the West Coast.

Mr. Lysnar: "It is too inferior." Mr. Seddon: "It is not inferior. It is inferior in price only." H. himself had recommended the Government to purchase certain estates there, but th© Government had refused, on'" to soo tho same estates bought and solo at big profits later. Mr. Seddon v urged the Government to remove the amusement tax from agricultural, horticultural, and '■ poultry shows. FARMERS AND ARBITRATION. Mi. J. R. Hamilton (Awarua) maintained that in nono of the Opposition speeches were there . useful suggestions to help the Government to moot the problems of the day. If the' country was to prosper it would be necessary for the Government to introduce at the earliest opportunity legislation to exclude farmers from the operation of tho Arbitration Act. He proceeded to urge that local bodies in Southland should be allowed to sell .rural endowment lands and invest the' proceeds in town property. The conditions of the rural leases did hot encourage improvement. Mr. ' Hamilton complained of the high charges made by freezing companies, some of which, he said, had made enormous profits. He contended that the Meat Producers' Board • had resulted in a great improvement in the return to producers. LAND SETTLiE_YI.ENT MEASURES. Mr. G. W. Forbes (Hurunui) considered that the saluting of the flag by school children ,could be overdone. The Speech from the Throne had been as thin as j usual, tlie only flower in it being the agricultural bank proposal, but that flower had been taken from the garden of the new country. The fact that the banks had been successful elsewhere did not mean they would succeed here, and certainly, until he heard more details, he conld not be optimistic on the point. He agreed that one way of preventing waste was to change the system of revising the estimates; instead of being sent to the one general committee, the estimates far the various departments should bo sent to the appropriate Committees—defence estimates to tho Defence Committee, and so on. Regarding the electoral system, he"said he was qnite satisfied that tho public was sick and tired of the present method. Ho admitted tliat the proportional representation system was faulty, but it was tho most scientific before tho country; therefore be supported it. The .demand wa3 for a thoroughly democratic system. He criticised tho Government's economy proposals, and chafed the Government with failing to deal with the aggregation of land. It was a serious matter that tho

trend of population siiould be to the towns, especially as the country depended almost wholly on its primary products. The Government should concentrate on the settlement of unoccupied Crown land and Native tend—settlement on terms which would give the occupants a chance to live. That would bo more beneficial I than immigra_ion at a time when the country could not employ all the/men already here. The Government, by its soldier-settlement scheme had farced land speculation, which was the main cause of the country's financial troubles to-day. He urged a revaluation of soldiers' properties instead of granting relief, which was in the uature of an unemployment dole and sapped the, independence of the settler. The longer the revaluation was delayed the more demoralised would the soldiers become. Concerning the railways, he was convinced that reorganisation was not possible if the solution were loft to a board of railway officers, who had got the Department ■into its present, mess. The Minister, in his statement, made no reference to the competition with motor traffic, which was a very seriou^ matter indeed. A complete overhaul of the whole system was needed—management by commercial men. LAND AGGREGATION. The Hon. D. H. Guthrie (Minister of Lands), referring to the terms of the amendment, said he could count on the lingers of one hand the members on the other side of the House who had given the Government one hint as to how taxation could be reduced. Ho claimed that the Government had done its utmost to stopi reaggregation. Every attempt had been made to prevent aggregation of land, but as bon. members on both sides of the House knew it was found almost impossible to prove anything, as the land was very often purchased in a name other than that of the real purchaser. A member: "Dummyism." Tho Hon. Mr. Guthrie: "Yes. Dummyism." Tho Government had done everything possible, and he believed.that they shonld stop not only aggregation," but should deal with land speculation as well. (Hear, heai.) The Minister then proceeded to deal folly with the settlement of soldiers on the land, and his remarks in this connection are reported separately. REPATRIATION SUCCESS, Mr.' Guthrie further gave particulars from the latest report oi the Repatriation Department, stating that no country had made more comprehensive provision for its returned men. New Zealand had trained 7468 partially disabled men in new occupations, at a total expenditure of £388,000. Particulars of loans granted for tho purchase of tools of trade or to establish soldiers in business were also given. Out of two millions advanced in this way, repayments already made amounted to £ 1,032,000. Mr. Wilford/: "Then, how did you get in such a mess if this is all right?" The Minister-. "We are not in any mess." The-money now coming in as repayments was enabling .them to carry on. "If tho members of the House wish to help us to do what is right and fair to the soldiers, for heaven's sake help us and do not criticise every little detail that comes up." Mr. Veitoh: "We don't know your secrets; how can we help you?" The Minister denied that he had any secrets. He acknowledged the- assistance received from all sides of the House and throughout the country. ' Mr. W. T. Jennings (Waitomo) asserted.that the.cost of government had been enormously increased by the establishment of boards and commissions. The functions of Government had been hahdcd over to boards. What had the Board of Trade done in New Zealand? The Board of Trade had not justified itself, and should have been turned out long ago. The travelling expenses of the Government departments were enormous, and the Government had no right to cut down salaries, because the cost of government was so great on acoount of such extravagances. Much had been said regarding land aggregation, and the sooner the legislation now on the Statute Book- was made operative the better. Under the old Liberal policy of land settlement the\ Dominion was made prosperous. In \V_itomo and Rotorua electorates there wer^ thousands of acres which could be settled. Why were the soldiers not assisted to go on that land? A member: "They wotdd not havr taken it." ' . Mr. Jennings maintained that they would have done so if properly assisted. THE COUNTRY QUOTA. ■Mr. A. D. M'Leod (Wairarapa) stated' that there had been an advocacy of proportional representation. He knew that some provision was proposed whereby the country quota would be protected, but he believed that the system would be impossible. The weaknesses of the proportional system had been , found out when it was tested. If they robbed the country of the country quota they would be taking away the political strength of the country, and there would be danger of intensifying the drift to the towns. As he had 'oi.-served it in New. South Wales, proportional representation magnified the power of the party political machine; and had it not been that the people of New South Wales rose hoi us bolus against it, the Labour Government would not have been defeated. « A,Labour member: "But it was defeated under proportional' representation. ' Mr. M'Leod: "Under any other system it would, have been beaten by 15 or 20 seats more. It did not get' the beating it deserved." The arguments about the success of proportional representation were purely theoretical. Proportional representation was not a burning question. WRITING DpWN VALUES. -.^S^iS soldier settlement, Mr. MLeod said he felt compelled to join hands with those who said that sooner or later values would have to be written down He did not blame the Government for what had been done. The Government acted under pressure of publio opinion, and mistaken judgments as to values were to be expected. Mr M'Combs: "What will be the loss?

Air. MLeod: "1 say ti lat if we settlf a large number of soldiers on the land *_ lo^ ?, f two or three millions " . Mr. Holland: "Two or three millions is nothing these days." Mr. M'Leod: "If a Government representing your interests were in power loss would have been three times as mnch.^ He did not think the present was the right time for writing down values. The markets would have to arrive at a state of stability first. There were some settlers who could not make their farms pay at tho present price, and their position should be fully reviewed. The Government shou!-. arrive at a basis of valuation which would enable the soldier to become a successful /farmer. Mistakes had been made, and it was unfair to say that they had been wilfully made for the purpose of fattening the friends of the Government. Regarding mistakes, Mr. M'Leod referred to tho purchase in 1905 of the Hall-Jones Settlement, and alleged that tho loss to date on that settlement was £20,000. He next mentioned the Normandalo Settlement (greatly written down since), tho Pitt Settlement, and the Wilford Settlement, all in tlie Hutt electorate. Only three of the settlements in the electorate could be re. garded as - successful. If the soldiersettlement of New Zealand showed a loss in proportion 'to the loss on the

Hutt Valley settlements, then he would be, prepared to walk out of the House with the hope that he wonld never return.

Tho Leader of the Opposition (Mr. T M. Wilford) said that Mr. M'Leod Had inferred that he had been as much to blame for the losses on the estates purchased in the Hutt Valley as the present Government was for the losses in soldier settlement. One of the properties was not in his district when it was purchased, and he was not concerned in any way with the purchase of the others, as the files would show. He knew who recommended the purchases and who made the commissions, but he was not the man.

Mr. M'Leod said he did not blame Mr. Wilford, but ho said they were mistakes of the Government which be supported. The debate was adjourned on the motion of Mr. Statham at 10.55 p.m.