DEMOCRAT POLICY

Evening Post, Volume CXX, Issue 111, 6 November 1935, Page 14

DEMOCRAT POLICY

MR. COATES GIVES FIGURES

(By Telegraph—Press Association.) WELLSFORD, November 5.

Statements made by Mr. T. C. A. Hislop, the Leader of the Democrat Party, regarding estimates of the cost of the Democrats' programme were the subject of some comment by the Minister of Finance (the Rt. Hon J. G. Coates) in the course of speeches in the Kaipara electorate today. Mr. Coates reiterated the statement that the Democrat programme wduld involve the country in an additional expenditure of at least £22,000,000 annually. . ■ ~ ■ Dealing with the full restoration of civil servants' cuts, Mr. Coates said the Democrat estimate of £500,000 for full restoration was mere guesswork. His own estimate was £800,000 over and above the recent 7i per cent, increase, based on an official calculation. Mr. Hislop also stated that £100,000 annually was more than sufficient to build j up the superannuation funds. His (Mr. Coates's) own estimate of £500,000 was obtained from the Government Actuary and had the merit of being correct. Actually it was quite unnecessary to build up the fund as the Government was well able to meet the annual requirements from year to year.

Mr. Hislop disputed the estimate of the cost of the health insurance and pension schemes. The cost obviously depended on the benefits to be given, but the best guide was the recentlypublished report of an official committee on which the figures were based.

The Democrats' proposed unemployment loan of £8,000,000 annually, presumably additional to the present programme, would mean loan charges of about £400,000 a year for the next 50 to 60 years. If the policy continued beyond the first year the loan charges, would soon reach £ 1,500,000 a year for a similar period.

The exchange premium under the Democrat plan would be replaced by an export subsidy of £3,000,000. Last season the exchange benefit to farmers totalled approximately £14,000,000. The improvement in general economic conditions showed clearly that the rest of the community had benefited as well as. the farmer. The direct charge on the Budget as the result of exchange was £1,600,000, and increased taxable capacity resulting from the improved conditions more than covered this.

Since the 1931-32 season the value of production had increased from £83,600,000 to £98,800,000; since 1933 wages and salaries had increased from £58,900,000 to £65,000,000. Business profits and other incomes had also increased and as a result the Budget had benefited by at least £2,000,000 above the cost of exchange. A subsidy to the farmer equalling the total exchange benefit would involve a direct Budget charge of at least £ 13,500,000 instead of £1,600,000. If only £3,500,000 were provided the farmers would be over £ 10,000,000 worse off and the direct cost to the Budget doubled. The proposal also would involve discriminations between farmers. Administrative difficulties and resentment against individual discrimination would cause the scheme to collapse quickly. "The statement that the Democrat programme will leave a gap of £22,000,000 still stands," said Mr. Coates, "and is based on official estimates. The electors must not be beguiled by impossible promises of political novices."