MILLION WITHHELD FROM WORKS

Evening Star, Issue 18263, 1 May 1923, Page 3

MILLION WITHHELD FROM WORKS

LABOR LEADER REPLIES TO PREMIER. ACCUMULATED SURPLUSES LARGELY FICTITIOUS. Mr H. Holland, 'leader of the Labor Party, replied at Westport yesterday to Mr Massey's Windsor speech. t . . Ho said he was sorry that his mild criticism should have perturbed tho Prime Ministeb to the extent that ho deemed it nocessary to have recourse to uis old i method of calling names. With respect i} o the Public Service reductions, Ho 1 pointed out that during the debate last vear both the Labor Party and tho present Speaker had conclusively shown that both wages and bonuses were to bo re- . duccd. At no time did the bonuses granted i to the public servants equal the nee in tho cost of living, and now as a result ot tho reductions tho average public servant was in a far worse position than at the ! outbreak of tho war. Indeed, many of the State employees were quite _ unable to I maintain their wives and families on wages they were now receiving. Mr Massey s statement regarding the agreement between the Government and the public servants was misleading, aa a reference to either ‘ Hansard ’ or tho official journals of the various organisations of the Public Service would show. Mr Massey had not denied that tho money voted by Parliament for necessary public works had been withheld, but ho had argued that that fact could not affect the surplus. _ At his ‘Pukeuri meeting, said Mr Holland, tho Prime Minister had told his hearers that during the financial year 192223 a sum of £3,850,948 had been expended on public works, as compared with £5,286,687 in 1921-22. The difference between the two amounts, he said, was due to the fact that was an exceptionally heavy year, owing to post-war accumulations. But what Mr Massey had not disclosed was that the Estimates for 1922-23 provided for an expenditure of £5,085,798 on works, all of which were regarded as urgent, nor did ho mention that of the amount so approved Jay Parliament tho enomons sum of £1,256,750 had not been made available for expenditure. That sum nearly equalled tho year’s alleged surplus. It was quite clear that if it had not been withheld the Government would have had to find nearly a million and aqnarter more for works than was spent, whether it was borrowed or taken out of the Consolidated Fund. Mr Massey’s statement was, in effect, that if they had authorised the amount they would have used borrowed money, and therefore his statement of the financial position would have been exactly the same as at present. It was quite true that if the work had been done and Mr Massey had used borrowed money in doing it, he could have added tho amount to the Public Debt, and still claimed to have a surplus of one and a-third millions on tho year’s operations. Mr Massey might even have found it possible in such a case to contend that there was nothing inconsistent with his conception of honest finance to meet current liability with borrowed money, and then present the amount so “saved” as a portion of the year’s surplus. But in his opinion a surplus so obtained would be as much a “paper surplus” as the oats (which never had an existence, and were yet sold by northern grain gamblers) were “paper oats.” With four and a-hnlf millions of the previous year’s cash balance in hand, and with a prospective cash balance of more than a million and aquarter on the year’s operations, statesmanship might be expected to be able to avoid loading the country with an additional interest bill of nearly £I,OOO a day. In the face of hostile criticism from the Labor Party, Mr Massey had first buried his financial head in the loose sand of the Government’s borrowing policy, and then Indignantly proclaimed that his critics were either ignorant or dishonest if they refused to admit that they could not see as much of him as, politically speaking, was not under the sand. Mr Massey’s denial that the heavy increase in Customs taxation would materially affect the rank and file of tho people was half-hearted, and his promise to reduce certain of the impositions was an indication that he recognised the strength of the Labor Party’s objection. He (Mr Holland) had not suggested that the surplus was derived from land and income tax concessions, but he was waiting to hear how Mr Massey would explain away the divergence between the infinitesimal relief in the form of reduced taxation to the small farmers and the huge sums represented in tho relief accorded to men with largo estates and immense incomes.

Air Massey had been somewhat reckless when ho implied that ho (Mr Holland) did not know that the major portion of the accumulated surpluses was invested in soldier settlement lands. In the House, with Air Massey present, he had declared that much of the accumulated surplus was fictitious for this very reason. The Government had bought land at the inflated prices of war years, and now' it was faced with the fact that sooner or later the capital values of many of the soldier settlors’ lands would have, to be written down by well on towards 50 per cent. When this happened a largo proportion of the accumulated surpluses would have disappeared with an honest stroke of the pen. In his criticism of Air Massey’s speech lie had not once suggested that the accumulated surpluses were wholly in cash. No one with a knowledge of the dominion’s coin and bullion and State guaranteed hank notes would be foolish enough to do that. But even Air Massey would admit that, whatever the real amount of the surplus was, it must ho in values, and if there was a bona fide surplus in values there could bo no real difficulty with respect to the currency, always assuming that we possessed statesmanship capable of organising the nation’s credit and controlling its finance. Air Statham had once declared that “ we never could get the Government to do one statesmanlike act during the war,” and it would bo a thousand pities if in these post-war days the Government should persist in endeavoring to live up to that reputation.