BUDGET DEBATE CONTINUES

Evening Post, Volume CX, Issue 32, 6 August 1930, Page 4

BUDGET DEBATE CONTINUES

MANY SUBJECTS! TRAVERSED

LOSSES ON THE RAILWAYS

■ Few Indeed were the new questions raised in the Financial Debate, which was continued in the House of Representatives yesterday afternoon and evening. For the most part it was a day for ihe back-benchers;of the three parties.1 'Two Labour members. Messrs. M. J. Savage (Auckland Wesi) and-C. H. Chapman (Wellington North), made pleas for the development of the secondary industries, and put forward the suggestion that the railways, although stowing a balance-sheet loss, had shown a profit in service to the Dominion. A detailed criticism of the Government's financial proposals by Mr. D. Jones (Reform, Mid-Canterbury) is reported elsewhere/ v. --.- ■; '■: ■ ■••' .... '.-■ - -;.■"■■,

• Continuing his speech after "The •Post" went to press, Mr. C. H. Clinkard ■J (United, Botorua) said it could not be ; said that there had been any reckless on public works on the part :' 'of the present Government. ;'■'■ Mr. J-A. Na.3h (Reform, Palmers- '■■■ ton): "What about the South Island

; main trunk?" Mr. Clinkard; "I'll tell the honourable gentleman all about that." He deprecated any suggestion that _ there should 'be •a. line of demarcation be- ■' :tweon the North and South Island jus; : because Cook Strait ran between. Fig- ; nres were quoted by the speaker to show that the South Island had not 1 received favourable treatment. It was "wrong that members should oppose a ■ railway just because it did not happen "to be in their electorates. The country through which the South Island mam trunk was to run was capable of carry- •; in" a much larger population than at ■; present, and it was a reasonable proposition to link up the two terminals. l;<Mr Clinkard condemned the expendi- •' imi on public works which had been initiated-by the Reform Government. ■'V Referring to the petrol tax, Mr. : bliikard said the oil companies were '"' bearing a portion of the cost, as it did 1 -not'suit'them to put the price up beyond a certain level. It was idle to ' say that the tax was going to put small 1 business people off the road. The tax would be of great assistance to the 'backblock roads; Concluding his speech, f, Mr. Clinkard made a plea for assistance ; for the timber industry. ■ • DEFERRED LIABILITIES. ;

' ' Mr. J. S. Fletcher (Independent, Grey : Lynn) criticised some of the savings i spoken of in the Budget, and suggested ■ that they ware not savings but merely ' "deferred liabilities. He instanced the ' removal of the additional superannuation subsidy, the decrease in the hospital subsidy, the decrease in the subsidy -on voluntary contributions, and the ■ elimination of the transfer to the Dis- • charged Soldier Settlment Fund, all of '"which he regarded as part of a raiding ■';■ process on the part of the Government. ■' ' "Political burglaries," interjected Mr. A. M. Samuel (Reform, Thames). . There was no provision made in the ' accounts, said Mr. Fletcher, for dealing • with the unemployment subsidy should tho Unemployment Bill be passed this ' aossion. The Government was very op- ' timistic in regard to the railway reve- , hue and the anticipated savings in expenditure.' The £5000 saving that was being made on scientific and industrial : research was tho height of political ;'folly at the time when that Department was being developed. Similarly, in, stead of curtailing the work ..of the 'Industries and Commerce Department .' to the tune of £13,000, they should be •extending its activities. He criticised also the "savings" by curtailing the - expenditure, on the Plunket Society and K&ritane Homes. . Turning to.the "highways,1 hesaid ho.thpughj; it; .was 'highNyayTObbery, rather than highway ::-finance, - He:asked whether top much ' was not-being done in respect of highj • ivayfc. The funds should be capital ised, so relieving the ratepayers. The ■" petrol tax would spell, doom to, many :In the smaller industries. Touching on • tho reduction in the duty on imported -tobacco leaf, ho said he had boon mi formed that a cigar factory in Auckland had had to close down, for they ' |ad to compete against cheap Gorman cigars mado by prison labour. !'l Mr. A.iM.Samuel (Reform, Thames): '^'1 think' that will bo altered." =; : | MORE SAVINGS SUGGESTED. '' The liquor licences could have been ' /used to bring in an enormous sum in extra revenue, said Mr. Fletcher, who •iitlded that further enormous savings •could be effected in tho Public Works .I Department. For instance, both Public "■tybrks and, county, engineers were engaged in looking into the specifications ifor roads, work which could be done •:by one body of men. Mr. Fletcher : twisted a well-known question into the -form "Chancellor, what of the future?" 4nd added that all the deferred liabilities involved in the Budget proposals

would all have to be faced next year. He deprecated the haphazard methods adopted by the Government in its Budget proposals, taking a bit here and a bit there. ; . :- Mr. Samuel: "A game of blind man's

buff." i ■■',' The time had come, said Mr. Fletcher, '>?hen a recasting of our taxation sys■.tem should be undertaken. It should be put on a much safer basis than that 'existing at present, which was haphazard in the extreme. He suggested 't|iat a committee should be set up this session to recast the system and put it ,on an income-tax basis. Land taxation shouia only deal with betterment values, i,ln conclusion, he advocated, the .prosqeution of a rigorous land development scheme,' which he said he would, .pursue-to the limit. The Government: !had';not given effect to its policy in that respect. Coal resources should also be developed for tlio benefit of the secondary industries.

■X TOO MUCH EXTRAVAGANCE, fMr. A. W. Hall (Eeform, Hauraici) siid he was sure a feeling of alarm had pervaded the Dominion when the Budget proposals of the Government were •made known.'-. Particularly was this ■the case in view of the rosy picture that had been painted by United Party Ministers during- tho Parnell by-elec-tipn. The United Party had claimed tcj have restored the national credit, Tout he elainied that the .national credit had never stood higher than it did during the Reform regime. If the Govornment was anxious to effect economies itf should overhaul the various Departments, starting at the head. The economic position which they found themselves in at present was largely due to national and private extravagance, and it' was to be hoped that the people would see the folly of their ways. The Government bad dealt with the unemployment problem in a very futile manner. Referring to the railways, Mr. Hall said they should regard the railways as performing a great national service, and they should be careful that their-efficiency was not reduced. Motor to;inpetition, over-capitalisation, and too costly administration wero the chief causes of tho failure of tho railways to show a return, and he hoped a genuine effort would bo made to bring about (jo-ordination between road and rail. H<3 did not favour the prosecution of live South Island nioin trunk railway. It;-was.a pity the order of reference of j&eTlteHlwax Gommisßion was so restrict-

Ed, and.he was afraid it was going to prove a, very expensive joke. It had been suggested that the Commission was set up to condemn the past Administration, and its personnel certainly gave colour to that suggestion. ■He did not think the Commisdon was justified. Mr,, Hall condemned the dismissals ;of' railwaynien, and said the Railway Department had treated its employees in a way in which no private employer would have treated them. High taxation would not improve the economic position of the country; in fact there had been no science used in the system which had been adopted. It was just a matter of money-making all the way through. He advocated a higher duty on imported timber, particularly American and Canadian. Dealing with-the petrol tax, Mr. Hall said he had also.been in favour of the principle of the user of the roads paying for their upkeep, but he did not favour the present proposals, as they would not assist the backblock roads one iota. Before any more taxation was put on there should be a complete investigation of the'transport problem. CHEAPER MONEY. Mr. M. J. Savage (Labour, Auckland West) criticised the policy of the Post Office-Savings Bank in allowing interest on money only up to £2000. He could not see any reason why it should not be allowed up to £5000. The higher amount would . give the Government more money at 3i per cent., and as it wasi paying 5J per cent, this was very desirable. ..< He had no doubt that the pressure'■'brought to bear by the associated banks had been responsible for the people not being given adequate facilities to invest their money.; The £1,000,000 excess of withdrawals over deposits in the Post Office was one of the consequences of the Government's short-sighted policy. People were investing their; money elsewhere. The Bank of New Zealand had not carried out its obligations in respect of longterm loans, and it was time that the Government reviewed the position. In tan years the Public Debt had increased by .£66,000,000, and there was little but liabilities to show for it. ' These loans had come into the country in the form of manufactured goods to the detriment of the Dominion's industries. Would it not be possible for the Government to extend credit facilities to the local manufacturers? This would make the country richer and reduce the amount of taxation per head. What the: country desired was stability. It would be much better .if the farmer could look forward to a fixed price for his" products, and could not the farmer make a direct bargain with the British consumer and so cut out the speculator? There was only one excuse for Government action in the commercial field —when the people's interests were in danger—and there was ample excuse for action at the present time. Members of the present British Government had advocated action along these lines, and why should not New Zealand give these men a chance to carry out the scheme? Here was a ehanco to achieve stability. What was the country doing towards investigating the Dominion's industries in order to put-them on a sound basis? There was no reason why many of New Zealand's secondary industries could not bo profitably developed. Unless this was done, there would bo no room for increases in;population and they would never balance future Budgets. Mr.. W. J. Poison (Independent, Stratford): "Jf it not a question of costs?" Mr. Savage: "It is a question of costs, but I am not going to bo drawn by that red herring." He said that they had mountains of iron ' ore in New Zealand, and yet they imported pig iron from India. Why could they not allow the British motor-car chassis in free and develop a motor body; industry?.. Would it not be better to establish factories for the manufacture of clothing than to have people attending on the charitable aid boards? Sufficient was not being done by private banking institutions to encourage industry, and it had become more apparent every day that the State would have to take a hand. The co-ordinat-ing of the Government lending institutions would revolutionise the industries of the Dominion. Who would say that the railways had outlived their: usefulness? The railways had played1 a tremendous part in the development of the country and provided a social service that could not be expressed in money. They had always been intendod for public service and not for profit. Thus, how could the Government justify the dismissal of men? The speaker drew attention to the AuditorGeneral's comment on the raising and converting of loans at a discount. This system was increasing the national indebtedness without providing one penny for developmental purposes. MAORI WHEAT GROWERS. Mr. T. Makitanara (United, Southern Maori) pointed out that the Leader of the,. Opposition had promised to sup- j port any legislation which would bo for the benefit of the Dominion as a whole,- but instead ho had movod two I no-confidence motions. Mr. Fraser. (Labour, Wellington Conteal): "How would the honourable, gentloman like tlio votes of no-, confidence —'one aftor another or due i before the other?" Mr. Makitanara referred to the unemployment among the Maoris, and said that they were suffering in silence. The Government wa3 waiting for. the co-operation.. of all parties to solve the problem. He congratulated the Minister of Native Affairs on his policy, for as a result a large number of Maoris had been placed in agricultural or pastoral, pursuits. He urged that surplus Native lands should be bought by the Government and brougHt under the land settlement scheme of the Government. The money derived from these landsi could be expended by the Native Minister for Maori land development.' The Maoris to-day were proving successful in all branches of farming, and were entitled to encouragement. He referred to the splendid results obtained by ; the Maori wheat growers in Tpanaki. The Ratana wheat-growers grew; 38.bushels to the acre, and'why couldn't the pakehas do the, saifte'?;;; He urged tlie : Government to prevent .the importation of foreign wheat, which would ruin'tho New Zealand growers by placing them in the hands of the: speculators..' •'THE REAL BURDEN." Mr. C.-H. Chapman .(Labour* .Wol-lingtoa-Kflrtli^ said that since 1931

there had been reduced taxation and reduced wages, and thus there could bo no cause for grumbling by the omplayers. In the last twelve months the Bank of New Zealand had made a profit of £1,000,000. This had been mado from the toil of the workors, and ho would like to remind; the member for '■. Mid-Canterbury that it was the financial institutions, not the workers, who wero making tho burden for the farmers. Tho speaker advocated assistance to secondary industries which would free the country from the evils of. the.Jhictuatioiis on foreign markets! Tho motor-body building industry . was one that deserved the earnest consideration of the Government, because in: :«l.short time it would give employment to a large number of men. Obviously tho Government had had to take steps to meet the Budget deficit, but in; his opinion there was room for great, improvement .in the methods propbsed by the 'GpYernnieni to make up tho-balance/and/he pointed out that it was remarkable that, notwithstanding the depression, the financial institutions had made big profits. The trading departments of tho Government had prospered during the year, and, although the railways had shown a loss on returns, there was not really a loss when service value, was taken into account. Those who owned the railways were entitled to some of the enhanced value of the; land, and thus it was only just that the States should take a betterment tax. If this was done-there would never be any cry that the railways were showing a loss. Instead of this the Government was discharging men. These men would swell the ranks of the ■ unemployed. It was the duty of the Government to taeklo tho unemployment problem by providing economic work for those seeking it, and if they d»d this they would get the support of the Labour Party. The. reducing of wages or the dismissing of men would nof. solve the problem. On the steeper graduation of income tax his. party advocated there would be an. increase of over £600,000 in revenue. This would enable a modification of the Customs proposals such as a reduction of the petrol- tax. The Customs in-creases-would be passed on, and the standard of living of the people would be lewered. There was no doubt that the Budget was a blow to the working people. He regretted the proposal to reduce the hospital board subsidies, especially, in view of the large amount of money the boards had to find for social welfare.: Notwithstanding the necessity for ' economising, Mr. Chapman thought' that something more should be done for old-age pensioners. He considered that pensioners should be allowed to earn more than they were allowed to to-day without a reduction in their pensions. He would also like to see more generous treatment to the widows of superannuated Civil servants. Captain H. M. Rushworth (Country Party; Bay, of Islands) congratulated the Government on its attempt to carry out aii' impossible task. The burden that: wasObeing placed on some of tho Ministers-was more than any one man could' bear. Mr. I'; Lye (United, Waikato): "And yet you say they need the whip." Captain Kushworth: "I am referring to those who are carrying the burden for the others." Discussing the industrial depression, Mr. Kushworth suggested that the gold supply of tho world-had something to do with the problem.' The reason why he had voted for the no-confidence amendment "Was that-he had made certain pledges to his electors. The Budget would add considerably to the burden of those people who were under the taxable limit. Captain Rushworth pointed to certain passages in the Budget which he contended required further explanation by the Minister of Finance. Although the Minister stated in the Budget that the Government wished to Sive encouragement to the primary industry, there was no indication of how much v the Government was prepared to spenctin that direction. If tho Government had any serious intention m the matter they might have given some small figure for the producers to look forward to. In view of the mimber of cases of hardship that existed amongst taxpayers, would the Government consider such cases so far as the taxes on necessities were concerned? They might say it was impracticable to do such a thing, but they; had.no right to create gross hardship when it was not practicable to offer relief. Tho debate was adjourned.