DEBATE IN HOUSE

Evening Post, Volume CXV, Issue 39, 16 February 1933, Page 6

DEBATE IN HOUSE

MOSTLY BACK BENCHERS

LABOUR HOSTILITY

• a Tho second reading . debate on the , Sales Tax Bill was continued in the . Houso of Representatives yesterday, < and speakers from all sides of the } House participated. Labour again < strongly criticised the Bill, and the de- £ fen^e of the measure was left to Gov- i ernment back benchers. ■■> , Mr. C. H. Chapman (Labour, "Wcl- \ lingbon North) said • that tho sales i tax would add considerably more than 1 the amount of the tax to the price of commodities to the consumer. Tho , policy of the Government had been to reduce the purchasing power of tho ' people and it was now increasing .the cost of living. The endeavour seemed to be to place the burden on those least able to bear it. In 1922 the income tax revenue had totalled £6.002,887, but in 1931 it had dropped to £4,603,608. During the same period the Customs revenue hads risen from £5,554,344 to £8,184,000, which was another indication of inequitable taxation because the bulk of the Customs revenue was paid by the working people. The sales tax would interfere with business, and would be distinctly unpopular and irritating to all sec-tions'-of the community.- The best thing the Government could do was to throw up the sponge and allow the electors to" choose another Government. Mr. .T. O'Brien (Labour, Wcstland) said the tax would further depreciate the spending power of every wageearner in the Dominion. In the schedule nearly everything used by tho farmer or the squatter had been exempted. Much., hdd been'said about finding employment in gold 'dredging, work,' but dredging machinery was not exempt; and,'in addition, there was an increased gold tax. To assist the industry, he suggested that dredging machinery should bo exempt. The timber industry was another which could be assisted. There. was no effort on-the part r-i the Government to rehabilitate the country, and the effect of the legislation would be to throw the country back further 'than it had ever, been thrown before.

PIECB OF PATCHWORK.

Mr. W. E. Barnard (Labour,-Napier) said that if the opportunity' occurred the Labour Party would not be anxi- l ous to take charge of affairs while things were crashing, but it would not hesitate to assume responsibility and J do its utmost to-restore-prosperity to the mass of. the ..people. .He deplored the Bill, which was merely a piece of ' patchwork, and he urged tho Government to grapple with the major issues. He contended that the best thing for New Zealand would be an appeal,to the country as soon as possible. , Mr. A. Harris (Government, "Wai^omata) said he regretted tho necessity for the legislation. ,Had the policy of a high exchange not been adopted it was possible that the Prime Minister's statement that there would be no further taxation would probably hayo been realised. Tho only tax pbssiblo to raise the necessary revenue was a tax of this nature. The irony of the "whole thing was that it was unnecessary. Having admitted that increased revenue was necessary as a result of the changed circumstances, ho agreed that a form of taxation similar to-the increase now before the House was necessary. The Bill would not make for simple administration, and though, he objected on principle to a primage tax, if that system were used instead of the sales tax tho effect would bo less cumbrous and less costly. A primage duty of 2_ per cent, on imports, and a similar excise' duty on locally-manufactured goods," with the exception of foodstuffs, would yield £1,650,000, .or £150,000 more than'it was proposed to obtain from the sales tax. Last year, imports amounted to £23,000,000, and locally-manufactured goods, other than 'foodstuffs, amounted! to £43,000,000, a total of £66,000,000. Mr. Harris criticised the Bill as being likely to give rise to ambiguities. He asked what was the position where imported igoods woi;o purchased from a wholesaler: the Bill seemod "to .tax those goods twice. Further, what was the position of a j manufacturing retailer who retailed his own goods?-If ho sold them direct to the public did lie escape the tax?

A FLAT TAX,

Mr. W.- Nash (Labour, Hutt) said that during the last three or four years tho Government had gradually placed a flat tax on tho whole of the people, and to a certain extent relieved the wealthy classes.. Tho larger proportion of tho money expended for the rolief of unemployment was paid by the working classes, and he contended that tho Government ought to get the money it required from those who had it to spend,' and not from the mass,of the people. As an alternative, he suggested a guaranteed price. Mr. T. D.. Burnett (Government, Temuka): A guaranteed price would turn us into a-.nation of loafers. Mr. Nash replied that it would /be an incentive to tho farmer, Mr.. W. J. Poison' (Government, Stratford): "Would not a guaranteed price be an inflation? | i Mr. Nash: The' Government knows that it is the only road that can be travelled- in-the ultimate., They are afraid of their own lack of capacity to carry out the scheme equitably. They are'taking the easy road. In Britain, continued Mr. Nash, production and guarantee^ were being organised''as far as they could be. The Minister of Finance (the Et. Hon; J. G.. Coates): To what extent? Mr. Nash: I say that the people in 'Britain aro travelling the right road. There had been a guaranteed price to applegrowers in. New' Zealand, : he added.

TAX ON TEA AKD SUGAR.

Mr. A. E.. Jull (Government, Waipawa) suggested that j the whole of the revenue requirements might,' be obained by the imposition of an increased tax on sugar and tea. That would.ensure that everybody would, have to pay; there would" be no question of exemptions. His. objection to the sales; tax was that it.was costly to administer and a reduction in the amount of taxation could not be brought abont with any reduction in the administrative cost. , He.'did not agree with those who suggested a -more steeply graded income tax, as r,here had already been an increase in. income tax. / The exchange rate was a kind 9f protection to the primary producer j and in this matter the Australians".had been more logical than the New Zealanders. In addition .to the high exchange, Australia also had the Paterson plan «_.ieh provided for a' bounty on exported dairy produce. : In two years the Commonwealth had doubled its exports of dairy produce,' and it was essential that the Now Zealand producer should not be placed at an unfair' advantage with his Australian competitor. There would, be a large, increase in the national income of New Zealand as-the result of the high exchange and every trader would feel the benefit. Mr. W. E. Parry (Labour, Auckland Central): Is that new money 7. .'"Mr. "Jull: It is just as much new money as any of the other, money I have heard mentioned. Some hon. members have suggested hitching our money to the clouds, - and ono other meniber, jvho j*/as; a ■ 3_tu_iste£ is thg

I present Cabinet >: Jias .suggested ; that .we t wait till the clouds roll by. - " ii Mr. R. Semple (Labour, 'Wellington East) said thatj although the-Hon. W_: h Downie Stewart;, had voted against the a high exchange .policy, he intended.:to _ vote for: the ; sales tax which was' the _ crystallised product of inflated - ci- t change. The Labour Party desired to t. save the country from the crash which c ewould be the inevitable result' of the g Government's disastrous and ruinous ( policy. The Government had. confessed i that the sales tax was the last'ditch, ( and yet there was still a deficit of _ £4,500,000. It seemed that the. end. ( was in sight. There seemed to'be a j difference of opinion between the ( Prime Minister, and the Minister of Finance on the question of interest re- • ductions.. : The Prime Minister had • stated thai the. burden •• of interest . . would have to .b6 lightened;. while rhis colleague said that a voluntary Tedue 1, ,tion would take place. . It: was abso : lutely essential for the salvation of tiie i farmers that the rate of interest should i be reduced. ..The competition on the. , markets today .was"becoming increasingly, keen and unless something -was 3 done to bring down the inflated land ) values, then- the New .Zealand farmers 3 could not survive.;. The: world was a also suffering from an antiquated mone--1 tary system which ,was condemned by c the thinkers of xhe world..' p. ; The Hon. A. D.. McLeod (Gdverri- _ ment, Wairarapa): -Who are they? . _ Mr; Semple: T wonld not call the hon. j memßer one, but 1 would be willing to Q consult him on. the .philospphy.-.of. the L . cowyard. ' .' :.. "■'•-..'■•' ""' ■•"■ '• t . Mr. Semple said that-the. sales tax _' was a monstrous piece of class legisg lation. -y^-; v ;.'--;•:•-:-.-■«-' r--

REDUCING EXPENDITURE.

Mr. H. S. S. Kyle. (Government, Ric- * carton) said he- regretted having to J) vote for the- taxation.' With- the _dim.: ? inishing revenue, hebelieved that "Gov- V ernmental expenditure "would have" to r be reduced still.further.. .-' : >'•"-..,, *' Mr. P. 'W.Sdhrainm (Labour, rAuek. v land East) claimed ''.".power's -. "given to the Minister in1 the y Bill were ° too ■ dictatorial. .'-- v.. ' V y-' .'; . _•.' \ ' Mr.v A..Stuart-(Government, Rangitikei) said he.-regretted the tax, but r it had become 'itrnecessity,; and neces- ' sity knew no-law. He hoped, that things would -get no worse; otherwise * there, would have to be further drastic I curtailment in expenditure.. . J ;. The ..Rev. C_ Garr (Labour, Timaru) ; said a tax on sales was suicidal. The ' effects of the Government's policy ' were cumulative in a downward 'and ] disastrous way. ' ~ ' The provision* of the Bill .were criticised by Mr. A. J. Stallworthy (Independent, Eden). „ ' Mr. W x . P. Endean (Government, Parnell):. What is the. .alternative? Mr. Stallworthy: One alternative would be -for members 'who have been sent hero to represent their constituents to represent them. If they exercised their votes along the,lines of ,the^only declared wish of their' constituents it \ would bo impossible for' this GovernL ment to put over a policy "not accepti able to the majority,, of the people. \ Mr. Stallworthy said'he -was* totally opposed to the Bill, which constituted \ a reversal of policy on the ■partI.of the J Government* .He claimed that as a Result of the'sales tax'm'any had already been added to the ranks -of the unem- ' ployed. ' - ' r. The dobate was adjourned on -.the . motion of Mi1. H. ~T. -Armstrong" . (Labour, Christchurch. East). " The House rose at midnight.