THE BUDGET DEBATE

Evening Star, Issue 20253, 14 August 1929, Page 7

THE BUDGET DEBATE

WIDE RANGE- OF TOPICS (Ter United Press ' AssocimaN.i WELLINGTON, August 13. In tin House of Representatives, the Minister of Public Works (the Hon. E. A. Tlansoniy continued his interrupted speech on the debate on the Budget. He' stateo that it was not desirable that largo sums should continue to bo expended on relief works. The Government was ' making every possible cndeavoin to place men on more productive works than they had been engaged on during tbe past twelve months. A special committee had been sot up to inquire into the causes jof unemployment _ The Governm .nt had decided to consider the recommendations of the committee as they were brought forward, ana to put them into operation immediately if they were acceptable. One oi the first acts of the present Administration had been to raise the standard rates of pay to relief workers, and the .opinion had been expressed that many woufd throw up their positions in ordoi to take on relief works. The Government had got over the difficulty _ by employing men on the cooperative system. The result was that the work being done at present time was costing the country less than it did under the lower rates of pay Mr D G Sullivan (Avon), in his opening remarks, expressed his desire to see seconda' S education made available for every boy and girl, and advocated an increase in old-age pensions, so that old and needy people need not ho forced into institutions in which they feared a certain amount of hard-

ship. He agreed with the Prime Minister that there was little opportunity for a reduction in expenditure. Jn fact, while not advocating a policy' of extravagance he thought' it would ho only fail to increase expenditure in sonic directions, and ho instanced the salaries of the Police Force. The Prime Minister wa. justified in seeking additional revenue, bub Mr Sullivan said lie did not agree with some of the methods employed Ho thought it was wrong to increase the primage duty. Had there never been a primage duty it might nevci h.. V-c happened that this means would be employed to raise revenue on this occasion, and now that it had once be-ui increased there was a precedent for a further increase. It had bee- stated that the cost per head would be only 3s. This, .added to the original tax, would make 6s, and over the period ni a full year (as the amount

estimated was oniy lor six imimiisi u would amount do 12s. l > rim:s"o duty would tliercfoi cost a working man’s family of five n total of £'3 per year, and this did not represent an inconsiderable burden. He agreed with other spealto’-a that once this duty was imposed it would be almost impossible to get it off. He would hare preferred additional taxation in oilier quarters, such as on-foreign motor cars and on certain' other imports, and in such cases it would also aid the development of our industries and provide additional employment. Mo had heard suggestions of Froefcrado within the Empire, but lie did not consider this practicable. Mr A. Hamilton ('Wallace) staled that much bad been said about the Government having provided cheap money for settlers, and he asked where it was He contended that the previous Minister of Finance could have found plenty of money under the same terms as Sii Joseph Ward had, but ho had known that there was a genera! desire throughout the country for a steadier borrowing policy. Hir Joseph Ward himself had criticised life Reform Administration for borrowing. Air Hamilton described the Budget as ungenerous in places and boastful in others. It was ungenerous of Sir Joseph Ward to ascribe the deficit to the Budget of .his predecessor in office, it had been stated that the Government was not going to embark on a programme of reckless expenditure, hut bo pointed out that the expenditure for,tile first quartei of the present year had shown an advance of £600,.000. He was inclined to think that the South Island railway extension might also prove an extravagant undertaking. The Government had claimed that it had a mandate to carry out this work How could a party that had obtained only 30 per cent, of the votes throughout tiie country claim that it had a mandate ! J He ascribed the success it had achieved to the promise of cheap money, and that cheap money was yet to be provided. The Budget had paid a tribute to the Reform Administration when it had described how, in May last, New Zealand’s credit in Londoi (after Reform’s term in office) had been such that ib f .had been possible tr raise a loan on favourable terms He wondered if the terms would he equally favourable when the country next went on to the market. Had Six Joseph Ward as .Fitianoial Ministe. in the National Cabinet adopted a statesmanlike attitude lie would have paid for the war out of taxation yeai by yoai as it wont on, and tlie soldiers would then have returned and

found Now Zealand as they had .left it. In summing up, Mr Hamilton stated that tho Budget indicated a policy of honow, tax, and spend. Mr H. M. Rushworth (Bay of Islands) stateu that private financial institutions had been becoming shyer and shye- in regard to lending money on rural securities. That was not shrprising in view of the fact that the gross produce was .stationary while the costs of production wore on the up grade, Tho margin between tho two was continuously shrinking, and nobody would bo particularly desirous of lending money on such security. However, it now appeared that the State Advances Department was adopting the same procedure He had had numerous complaints ot this department’s refusal to advance loans to people in the country on tho ground of unsatisfactory security, and he suggested _ a more liberal policy in relation to the valuation of these securitiesMr Rushworth protested against the raising of the cost of Jiving by an increase in the primage duty. He agreed with certain aspects of the increase in the land tax. It was desirable that certain kinds of estates should be broken up, but the proposals might involve some hardship. It was not pleasant for a man to pay tax on his debts, which seemed a possible outcome of the proposals relating to mortgage exemption. Mr Rushworth outlined the activities of certain financial institutions, and slated that in view of the size.of their profits they should besubjected to increased taxation. FinnncialV’uistitutions had'secured a stranglehold on tho dominion. This was the problem that would have to bo tackled. The Prime Minister had stated that .banking legislation would be reviewed, but why was he delaying? The Bank of New Zealand’s license to issue notes i had recently expired, but tho Prime Minister, instead of extending the 1 license for six months while lie considered tho position, had renewed it till 1932. Mr Rushworth contended that this problem should be faced forthwith. He" was strongly, of the opinion thof the income tax should he increased, while the indirect taxation and the

burden on the farmer should be reduced. . n Mr J. S Fletcher (Grey Lynn) said he wished to ask Mr W. D. Stowart (Dunedin West) some questions. I Was lie negotiating at the end of his term of oliiee for a loan of £5,000,000? Was ho going to take the money at a higher or a lower rate of interest than that at which it was eventually borrowed by (ho Prime Minister? The Reform Government had estimated over £7,000,000 for public works. How was it going to carry on these works with a loan of £5,000,000 when the programme called for over £7,000,00, and what would have been left for the State Advances Office for advances to settlors? Mr Fletcher said lie disagreed with the contention in the Budget that the heavy losses on the publicly-owned railways were being largely. _ brought about bv good motor roads being built with public money to facilitate direct competition with the railways. It had 'been indicated that motors bad not been paying their share for the provision of good roads, and he hoped the Minister of Railways, when he brought (town his Statement, would ho able to furnish some. better reason than this lor the failure of the railways to pay. Ho was not satisfied with the progress that had been made in the past towards the .settlement of the unemployed problem. What was required was a big constructive programme of works to induce men to go out to the country and subsequently settle naturally on the land. He suggested that a bigger subsidy slum Id he provided for the Department of Scientific and Industrial Research, and he imped for pood results from the Government's intention to develop the secondary industries. Air J. W. Munv'o (Dunedin North) alleged that the farmers’ unions, the employers’ associations, and the Reform Government had schemed following the war to adopt a policy of immigration with the object of bringing down the workers’ wages. The result was the present economic position, and the question was whether the Labour representatives could now trust the United Party. Referring to pensions, lie suggested that the Prime Minister should appoint a committee representative of all parties to go into the whole question of reform of the present system, and to make recommendations to the Government. This would be an excellent opportunity to break down the narrow party spirit and place the interests of the country first, and it was particularly to be. recommended af a time when "the, parties were so unusually evenlv represented in the House. Mr .< * t ii i i I-_ j .-j ~i.

Munro challenged the statement that there were 10,000 more men employed on public works to-day than during the Deform -Administration. He considered there were very low more. than formerly. and ho would bo glad to have an assurance that the public works employees were not being paid only the relief rate of wage. Ho expressed an opinion in favour of tho construction of the South Island railway extension, and described tho decision to write j down the railway capital account as one I of the wisest things the Prime Minister had done. He said ho had passed through three generations of rolling stock," 5 but had never set anything aside for depreciation or renewal. The railways had not been given a chance to pay, and lie wished the amount written oil' had been larger. Dealing with the land policy, Mr Munro contended that the Government had always had the right to acquire compulsorily such land as it considered was not being employed in the best interests of tho country, and ho would support the Prime Minister in his effort to break up large and comparatively unproductive estates. The debate was adjourned on the motion of Mr A. W. Hall (Hauraki), and "the House rose at 10.18 p.m.