MINISTER'S REPLY

Evening Post, Volume CXXX, Issue 16, 18 July 1940, Page 5

MINISTER'S REPLY

THE PAST REVIEWED

RAISING OF FUNDS

SOCIAL SERVICES TO BE

KEPT UP

Before replying to some of the points raised in the debate, the Minister of Finance (the Hon. W. Nash) gave a sketch of the position dealing with the raising of money by the Government, the expenditure of money by the Government, and the various forms in which it is proposed to raise money, and prior to that surveyed the position facing the Government when it took office in 1935, and the financial policy it had followed up to the time war broke out. It had been suggested by the Leader of the Opposition, quite honestly, that if the Government had followed another policy during the years prior to the war New Zealand's financial position would have been so much stronger when war broke out, and the country's ability to contribute as far as the cost of the war in the United Kingdom was concerned would have been greater than the Dominion had been able to contribute. Going back to 1935, Mr. Nash said that when the Government came into office it was correct to say that there were 57,000 registered unemployed. The Government had set out as a positive policy to find ways and means of putting those men into productive employment. RAILWAY CONSTRUCTION. Dealing with the railway construction work that had been carried out, Tie said that it was likely to be more valuable in the future than at the present time. His third point dealt vJith electrical development, which, he said, had been unprecedented. The fourth point was housing, which he linked up with the employment position. In spite of all that had been said, it was correct to say that there had never been a social action that had brought more justifiable happiness and joy into the homes of the people than the housebuilding by the Government. The man who suggested that the Government should stop building houses had lost his vision altogether. Mr. Nash dealt with the circumstances leading up to the exchange control and import selection policy. From September, 1939, to June, 1940, more goods had been produced in New Zealand factories than in any previous nine months. Mr. W. J. Poison (National, Stratford) : You would expect that because of the restrictions of imports. How else could they get the goods? Referring to criticism of the introduction of the exchange control policy, Mr. Nash said that it was not correct to say that it was a haphazard introduction. The Government had thought it out for twelve months before. Inevitably some importers had been hard hit. There had been some disturbance of a very difficult nature for quite a number of people. Turning his attention to the Budget, Mr. Nash said it placed before the House procedure providing for an expenditure of £102,000,000. Of that sum, the Government proposed to obtain £54,000,000 by taxation, £10,000,000 from other revenue that it collected in various ways, and £38,000,000 by way of borrowing and credit. Mr. S. G. Holland (National, Christchurch North): How much of that is credit? FUNDS FROM CREDIT. Mr. Nash said that the exact sum had not yet been determined, but £19,500,000 had been mentioned. The Government proposed to create funds that would enable it to meet all commitments as it went along in excess of the sum it proposed to borrow.

Was such a sum of £102,000,000

necessary? continued Mr. Nash. He

explained that £37,500,000 was for war. That was the estimate now and it had gone up £4,000,000 in two months. The Government had been budgeting for £33,200,000. The amount might go up another five or ten million' pounds. Then there was £13,000,000 for social security and £18,000,000 for national development. Ordinary expenditure from the Consolidated Fund ' was £33,500,000. An expenditure of £20,500,000 was contemplated for what were called public works. The usual definition of "public works" was grossly unfair both to the Government and to the Minister of Public Works. It was not bridges and roads all the time, as some people thought. "Public works" meant every work carried out by the Government. PUBLIC BUILDINGS. Referring to public buildings, Mr. Nash said that two had been singled out for special reference. One was the new IZB building at Auckland, which was started something like twelve months ago. Two storeys were up and if they put the roof-on now the cost would be wasted when it came to putting up the other two storeys later on to meat the requirements of accommodation. The Health Department said that the conditions under which tha Commercial Broadcasting Service in Auckland worked were unhealthy and should be rectified, immediately. The other building was that for the Internal Marketing Department in Auckland. The first part of the contract, costing £28,000, had been let in May last year, and it was not worth anything unless the building .was to be completed.

The Minister referred to the sum of £700,000 earmarked for school buildings. Much of that was to complete buildings that were under way.

Mr. Poison: At a time like this we should spend money on one thing.

Mr. Nash: There is not a penny being spent on schools which, if it. could have been spent on the war effort, would not have been spent on the war.

Mr. Poison: Do you suggest that the country can stand £100,000,000 and carry on the war?

Mr. Nash: Yes. That is why the Budget is before the House. We will have to go on finding money to maintain our- war effort at its maximum and keep our social and civil services at their maximum after making provision for our war effort. Surely no one suggests that we should stop social

services or expenditure on schools because we are at war. Let members of the Opposition suggest where we can logically and reasonably curtail expenditure.

. Mr. Nash said that the total required for public works was £20,000,000, of which £5,000,000 would be out of revenue. The balance would have to be found either by borrowing or by the creation of money, though he hoped that it woud not be necessary to create it.

Mr. Holland: Is the £15,000,000 going to be free of interest?

Mr. Nash: No

The House adjourned at 10.5. p.m until 2.30 p.m. today.

FLY