A HELPFUL DEBATE

Evening Post, Volume CXI, Issue 83, 9 April 1931, Page 10

A HELPFUL DEBATE

The most striking feature of the debate upon the Hawkes Bay Earthquake Bill yesterday was the complete absence of the party spirit. This was to be expected when the House was considering means of assisting the earthquake districts. The effect of this departure from the usual party method was most marked. Instead of antagonism there was a spirit of co-operation and. helpfulness in the House. It cannot be doubted that this spirit will produce a measure much more useful 'and equitable than one which emerged from a tussle on party lines. The demonstration of the advantages to be gained from non-party consideration of measures may be forgotten quickly in the House itself, but we hope it will be remembered in the country when electors are asked to say by their votes that party is of vital importance—even more important than the country. The debate itself revealed general approval of the spirit of the Government's proposals, but some divergence of opinion upon methods. The most marked differences were on three points: (1) The measure of assistance to be given; (2) the proportion of aid to be given by grant or by loan; (3) the insurance and insurable property tax. There was doubt in the minds of many members concerning the adequacy of the relief proposed, but we do not think this point needs to be emphasised. The Prime Minister has given an assurance that the appropriation of £1^500,000 from the London Reserve Fund is not the limit of Government assistance. It is sufficient for the time being, and further provision can be made as it is required when Parliament meets again. The assurance that a further amount will be available, with the provision of £1,500,----000 for immediate use, should restore confidence and accelerate progress in rehabilitation. The question of grant or loan may also be reviewed later, when a more exact idea is obtainable of the losses sustained and the position of claimants on the fund. We believe that it will be necessary to grant a considerable sum to re-establish credit in the shaken towns, but it is not necessary to state at once the proportion of grant and loan. It can be determined more equitably when there has been more complete investigation. There are many details of procedure which cannot be decided finally until more information is available. Such information will be afforded as the Adjustment Court gains an insight into the position of business in the towns, and is thus able to give useful guidance in- framing further relief measures. Material damage unfortunately is not the sum of the losses sustained. There has been a heavy loss in securities, and credit has suffered accordingly- It is necessary now to establish a new basis of credit, and this involves a readjustment of securities. With this done, and with the provision ot a reasonable amount of new capital from the Government, confidence will be restored and further capital 'will become available from private

sources. Finance, after all, is at the root of the problem. When this question is settled, actual material restoration will be expedited. It is therefore essential that a definite assurance should be given that the country will stand behind Hawkcs Bay in effecting a financial restoration. Tbe criticism of the insurance and insurable property lax is, we feel, justified. When a special lax of this kind is levied ils incidence should be ils main justification. Otherwise the funds should-be provided from general taxation. In this instance the tax does not conform to the principle of taxation according to ability to pay —for the possession of insurable properly is not a measure of wealth. Nor is the tax equitable as a general compulsory insurance against earthquake damage since it takes no account of varying degrees of risk. It may be added that its adoption cannot be advised on the score of simplicity— as if it were a tax on insurance. The inclusion of insurable property —to bring in property-owners who carry their own risk —will make the tax a complicated one, necessitating special returns and assessments by the Taxation Department. While it is desirable to make some provision for reinstating the London Reserve Fund, we are not convinced that the Government has presented a strong case for such provision by means of special rather than general taxation.