THE BUDGET DEBATE

Evening Star, Issue 19634, 13 August 1927, Page 3

THE BUDGET DEBATE

SPEECHES CRITICAL AND COMPLAISANT [PMt United Tress Association ! WELLINGTON, August 12. The debate on the Budget was resumed in the House ot Representatives by Mr E. D. iM'Lennan (Franklin), who thought the Budget a most satisfactory statement ol the dominion s position. Jlu did nut agree with All it, AlMveen (Wellington South) that indirect taxation was pressing unfairly on the workers. The ligurcs disclosed in the Budget showed that the harden ol taxation was fairly distributed. Hie increase- in the public deut had been criticised, but much ol this debt was revenue-producing, and was no burden at all upon the taxpayers. Similarly, much ol the public works expenditure would become a national asset, lor no less than £5,5-17,(Kit) would become reproductive. Our importations had brought about much of our financial depression, resulting in unemployment. He congratulated private citizens and the Government on the steps taken to mitigate unemployment, which was a tragedy in a country such as ours. Unhnulcd assistance, however, could not be given in the shape ot relief works, as otherwise there would be a tendency to create a class of professional unemployed, who would be continuously looking to the State lor relict. Mo combated the idea.that the Government had any desire to reduce the standard rate ot' wages by means of relief works. The real remedy for unemployment was closer .settlement ot the land and increased production. To achieve this end farm life must be made more attractive by giving the settler means ot communication and other laciJities. Some settlers in the north who had been without roads for many years now had a right to look to the Government to provide them with more cheerful conditions. He congratulated the Agricultural Department on the accuracy of its produce grading, and concluded by asking the Government to provide the farmers with an ample supply of cheap fertilisers. ■ Mr J, A. Lee congratulated the Minister on the success of the Slate Socialistic enterprises, as shown in the-_ Budget, and he hoped this form ol Socialism would be extended in the field ot insurance. New Zealand tor many years had been pursuing a financial “rakes progress.” tt was time constitutional government was established. The public debt by Bill had amounted to £31,U(IUjOtHI. 'then a “ non-borrowing ” Government reached the Treasury benches, and the public debt was now £104,001.1,00(1. Mr Lee. said the point would he made that there had been a war. That was true, and the mistake was that its cost was met by borrowing instead of drawing on the war profits that certain people had made. The sinking fund was described by Air Lee as merely a form of collateral security for loans obtained Irom capitalists abroad. The Reform Party in the 1925 election campaign promised a revision of the incidence of taxation lor the relief of people with small incomes, but no attempt had been made yet to keep this promise. Mr Lee said-the Minister of Defence in 1924 had criticised the amount of borrowing and the remission of income tax; yet he had since attained Ministerial office, and had not used his inllucnco to induce the Government to carry out his election promises. Stiffcr taxation should he imposed on luxuries, such as highpriced motor ears. Relerrmg to wireless, Mr Leo condemned the Government’s action in giving financial assistance to a privately-owned wireless corporation. There was uo reason why a Stale bank should not produce as good results as private concerns if the stall’ gave equally eliicieut service. ■■> Mr D. Jones (Ellesmere) said tha.t Air Lee had suggested the country had gone to the bad to the extent of £lB,OOO.OUU in two years, 1925 and 192 G; that, in fact, we had not received any value for that moiicv. lie reminded Air 1 joe that of the ordinary public debtall but £2(I.OO(',UUO was revenue producing. .Mr Jones said the Reform Administration was such that New Zealand's credit abroad was tbu highest in the world. The Government bad done a great deal to assist (ho fanner. Labor speakers bad defined " organising finance in New Zealand ” as GovI eminent control of all banking and insurance in the country, but Air Al. J. Savage, a member of the Labor Party, bad said quite correctly that a State bank could give bad; only the amount of interest earned. New Zealand banks during the wartime gave the country the cheapest money in the world. Financial difficulties due lo the slump which hurt the fanners so much were duo to excessive importations by our mercantile community. The Government should get into touch with importers’ associations at Homo and secure data about the amount of goods coming to New Zealand. The publicity of such, a. procedure would steady the imports into the dominion. The New Zealand Aleut Board had followed the plan of regulating exports with lie no I it to the meat-producing community. Air Jom>s agreed that the amount of loan expenditure on public works in New Zealand to-day was disquieting in view of the changed condition of the ha la nee of trade, (he value of onr imports having dropped seriously. Interest and sinking fund burdens wore becoming gravely serious, and the country should bo more self-reliant and less dependent upon loans from London: Referring fo telephones, Air Jones considered that users should pay (lie cost of installation, which would mean a saving of about half a million yearly to the public funds. If this system were adopted the provision of telephones could be carried out very much more expeditiously and cheaply. Air Jones urged that expenditure on various phases of public works could ho cutdown by at least ofic-third if done by (he contract system or piecework. By this means workers would obtain better wages, the country would get. better work, and there would be a chance to bring about some reduction in the cost of living. Afr E. A. Ransom (Rafiiaiua), referring fo telephones, said that Air Jones’s suggestion that the people should pay for installations was untenable, and would mean that many country people would have to do without the telephone service. The back country settlers already had to pay very heavily for telephonic communication. He agreed with a suggestion that the AVeraroa and Ruakura farms should be sold and, the proceeds devoted to the agricultural college. A great weakness of the present Government’s land settlement policy was the fact that the lands were not good enough for land settlement purposes. Only good land, suitable for intensive farming, should be considered. Good land was still available,_ and the speaker cited two estates in bis own electorate, owned by absentees, _ that could be cut up and made available for a number of settlers, who would have an excellent elm nee, of succeeding. The policy of the present Government Had been described as borrow, squander, and tax, and certainly it seemed to him that there bad been something very like sqandering, and the logical outcome of that was more taxation. Air J. Alasou (Napier) denied the charge that the Government had done nothing to assist farmers' financially, and that the Government had been squandering and over-borrowing. Members of tjie Opposition should in fairness point out how they would cut down borrowing. Would they curtail the amounts provided for housing or for hydro-electricity ? The Labor Party claimed they would bo able to run the railways at a profit, bntq the experience of Queensland in that direc-

tion was not Ho favored the expenditure on the Singapore and believed it would not be long before the country would turn the corner towards prosperity. Air J. Horn (AVakatipu) attributed the present agricultural depression to excessive mortgaging, in spite of widen fanners had not sufficient capital to carry on, and without that they could not succeed. He advocated the amalgamation of flic various produce boards, ami thought that the Dairy Board (should be able to do something for the farmers by the elimination of the middlemen, who were getting too big a cut out of our buffer in London. He strongly urged the Government to give a, State guarantee 10 inral credit bonds, which would bo the best service they could render to flic fanners.

'fbe adjournment of the debate was moved by Air J. Bitcbeiier (Waitnki). and the House rose at 11.-lo p.m. till 7.-‘SO p.m. on Tuesday.