AID TO BUILDING

Evening Post, Volume CXVI, Issue 146, 18 December 1933, Page 10

AID TO BUILDING

A LABOUR PROTEST

WELLINGTON SUBSIDIES

MINISTER'S DEFENCE

Labour members in the House of Representatives on Saturday afternoon protested vigorously against the granting of a building subsidy for two large buildings which are to be erected in Wellington by insurance companies, and the granting of the subsidy for big shops for two rival firms. The subject arose in the course of the discussion of the Unemployment Board's Estimates. In a reply to the protests, the Minister of Employment (the Hon. A. Hamilton) pointed out that the Unemployment Board, in granting building subsidies, could not differentiate as to the uses to Avhich buildings were to be put. The whole idea of the subsidy was to stimulate industry, and it had been found that about ten times the amount of the board's subsidy was being spent in buildings. Mr. P. Fraser (Labour, . Wellington Central) asked whether the contractor who was successful for the Colonial "Mutual Insurance Company's new building in AVellington was a Sydney firm which had registered in New Zealand for the sake of convenience but which had no building organisation in the Dominion. He understood that that firm was to receive a building subsidy, and he asked whether it wa? bringing some of its staff from Australia. It was to be hoped that the Minister would not allow any outside labour, whether for supervising purposes or not, to be employed on a building, the cost of which was'subsidised by the working people of New Zealand. The Colonial Mutual Company was receiving a subsidy, as well as the Prudential Insurance Company. The latter company was the richest insurance firm yi the world, and yet it was coming here to erect a building subsidised out of unemployment relief money.' There was soinethinjg radically Wrong with a Government which allowed such a policy. However, if the subsidies had . been given it was only right that New Zealand labour should be employed and that Now Zealand materials should be used as far as possible. He would like to sco New Zealand jobs carried out by New Zealand labour, and he certainly objected, to wealthy firms receiving any form of assistance from tho Unemployment Fund when they could well afford to build out of their own profits. COMPETING FIRMS. Subsidies were also being paid- to other wealthy firms which were competing throughout New Zealand, continued Mr. Fraser. In one case they had been subsidised in*- erecting buildings in the same street in Wellington for the purpose of intensifying their competition. Those two firms were competing with each other in all towns of any size in the Dominion, and as Chairman of the Unemployment Board the Minister would have to take his share of responsibility for subsidising their buildings. Mr. A. S. Richards (Labour, Roskill) said that in Auckland wealthy firms were being subsidised to enable them to build large numbers of houses. Mr. AY. J. Poison (Independent, Stratford): AVho are these people? ' Mr. Richards: I will name one of them.- Winstones, Limited. Mr. Richards stated that this firm was building over sixty houses for speculative purposes. It would,, be stated in reply that the firm was. giving work to unemployed tradesmen, but even if the subsidy had not been given there was little doubt that the firm would have built the houses in any case. .It was selling these houses on the time payment system, and was competing directly with the empty houses belonging to the State Advances Department. Surely that policy should not be allowed to continue, as the scheme was not benefiting those whom it had been intended to,"help. Mr. R. Semple (Labour, Wellington East) said that it was absolutely wrong that factories, freezing works, and insurance companies should bo allowed to erect buildings with the help of unemployment money. As a. result of the ' subsidy permanent assets were being created for Wealthy companies, and all the woTkea- was gotting was temporary employment. The wages paid wero only a trifle compared wtih the increased value of the building. It was absolutely unfair. It was never intended that the pennies -of the- poor, of the oia age pensioners, of,the grrls in the factories, and of the small boys selling papers in the street should.go towards the cost of erecting buildings. for wealthy in-surance-oompanies, ."I submit that the policy of allowing, money to be used for these-purposes.is.questionable indeed," said Mr. Semple. The work that • was .created/ .was just a spasm, which would give temporary relief only. ' Mr. Serirple added that the Houso was entitled to a logical and reasouaolc 'statement of the policy that was being pursued by the Unemployment Board, which was ignoring the protests which were coming from one end of the ,country to the other. Mr AY. J. Jordan (Labour, Manukau) said that there was something radically wrong when the Unemployment Board was-subsidising toy shops in order that they might sell Japanese goods. If toy shops were considered necessary ,+hey should be built out of the profits on the Japanese goods, and not out of the money of the people. "We are taxing the people of this country to sell toys," said Mr. Jordan. "What madhouse are wo in?" , STIMULATING BUILDING. Replying to the discussion, the Minister of Employment (the Hon. A. Hamilton) said that had it not been for the subsidy being available, the construction of the large buildings in Wellington would not have been commenced. .' Mr. Richards: They told you that to draw you on. ~ ' , The Minister: That might be the case, and it might not be. # Referring to the suggestion that there was an over-supply of houses in Auckland, and that house builders were using the subsidy to build houses as speculations, the Minister said that he did not think that if there was an oversupply, houses would be built as speculations, especially when the builder had to find about 90 per cent, of the cost. The stimulating effect of the subsidy on the building industry had resulted in about ten times the amount of tho Unemployment Board's subsidy being spent. The job of the board was to stimulate other people to Spend money so that the board's funds would go further. Mr. Poison: Would it not be wise to carry that principle further and subsidise other forms of production as well? The Minister said that in dealing with subsidies, one had to be careful for the final result was often a tangle. Most schemes could be abused, and he had yet to hear of one that could not bo misused. ■ Replying to an interjection by Mr. Richards, the Minister explained that .lie board could not differentiate between one applicant and another in so far as the purpose for which the building was to be used was concerned. He did not think that the subsidy was

granted for the whole of the sixty houses which were being erected by one firm in Auckland. Mr. Richards: I can assure the Minister that that statement is correct. The Minister pointed out, in connection with the insurance companies' buildings, that the conditions demanded that the whole of the labour should bo drawn from New Zealand, and as much J of the material as was procurable in I tho Dominion should be usetf. About j 80 per cent, of tho total cost of these buildings would be spent in "Xew Zealand in labour of one kind or another.