THE BUDGET DEBATE

Evening Star, Issue 20555, 6 August 1930, Page 7

THE BUDGET DEBATE

ALL TAKING A HAND NO FINALITY YET [Pis United Press Association.] WELLINGTON, August 5. Tho Budget debate was resumed in the House of Representatives this afternoon. Continuing his speech, Mr C. H. Clinkard appealed for support for local industries, and said that imports were increasing so rapidly in some commodities that it appeared that the time would como when local industries would bo starved out. Tho time was coming, he said, when public works now engaging thousands of men would be finished, and secondary industries would be required. Mr J. S. Fletcher replied to Mr Clinkard’s criticism on Friday regarding Mr Fletcher’s vote against the Government. He asked Mr Clinkard if be had considered his own position in regard to the non-fulfilment of pledges that had been ■ made to his electors. Dealing with the Budget, Mr Fletcher said that many of the savings embodied in it were only deferred liabilities. Tho Government had started a raiding policy and was raiding a number of funds. Some of the departmental savings were the height of political folly Instead of some of the votes being decreased they should have been increased because industry could not expand in a country without expenditure. Ho was ip favour of capitalising the-Highways Fund instead or building’ for ten years and trying to pay in'ono year. If the. Government had increased liquor licenses, increased postage, and capitalised the Highways Fund there would have been no need for other taxation. Mr A. W. Hall (Hauraki) did not think anybody would consider it wise to construct railways purely : for passenger traffic. In this respect motor competition rendered an adequate return unlikely, and it was to the goods traffic that the country had to look for a large share or the railway revenue. lie believed the greatest difficulties in the way of making the railways pay were motor competition and the high administration costs. The latter was by no means a small item. He hoped a genuine effort would soon bo made to secure co-ordination between railway and motor transport, and eliminate wasteful competition. He considered that suburban services could be improved by having lighter and faster trains, and by eliminating first-class carriages, which were quite unnecessary. The people did not want first-class compartments in buses. Mr Hall expressed the opinion that the excuse of the Leader of the Labour Party for not voting against the Government was rather “ thin.” He believed the real reason was that the Labour Party believed that defeat of the Government would precipitate a General Election, and it was not prepared to face tho country at the present time. , , , , TT Mr M. J. Savage (Auckland West) criticised the suggestion that a saving of expenditure could be effected by the elimination of the mail subsidy. This money, was paid to enable the carriage of our mails, and while he did not contend it would be impossible to make a less costly arrangement than at'present he did not see now it would be possible to withdraw the _ subsidy altogether. Mr Savage criticised the administration of the Savings Bank, and expressed the opinion that there could bo no defence of the action in turning away deposits at 3J P er cent, when the Government was at the same time borrowing money at oi per cent. He did not see why tho Post Office Savings Bank should, not accept deposits up to £5,000. Ho stated that New Zealand’s national debt had increased by £66,000,000 in the last ten years, and a largo proportion ol these advances had been brought into the country in the form of manufactured goods. How would this encourage tho principle of “ Buy Now Zealand goods”? How would it help our secondary industries? Mr Savago advocated the negotiation of trade agreements between the fanner,- of New Zealand and the consumers in Great Britain. It would be argued that by doing so the farmers would place themselves in the hands of one buyer. Wo would be burning our boats behind us. Tho reply to this argument, however, was that we had already burned our boats. We were in the hands of trusts. Would it not be better to deal with one buyer representing tho people than with trusts representing a few individuals. The whole community would benefit from trade stabilisation between Great Britain and this dominion. It had never been intended that tho railways should necessarily be run on a profit-making basis. Mr Taverner, as Minister of Railways last year, had stated that the policy of regarding railway construction as a departmental rather than a paying concern had been extended to the operation of the railways. Mr Savage asked how this statement could bo squared with the recent action of the Government in discharging men because the railways were not paying on a balance-sheet basis. Mr Makitanara (Southern Maori) reminded tho House that while unemployment was rife among the pakehas the Maoris alsa were sufferers, but they suffered in silence. He described the successes of Maori farmers in various parts of New Zealand, and urged that the wheat-growing industry should not be allowed to be stifled. • The Maoris had been, producing wheat in the North Island as successfully as any farmers in the South, and he believed that the time would come when wheat-growing in this country would have to be extended.’ It was a mistake to attempt dairy farming on wheat-growing country. Mr Jones pointed out that the Government members still in the House had been elected by about 220,000 electors out of 7-10,000. Their supporters had been materially decreased, two by by-elections having proved this, yet the Government proposed to change the whole fiscal and taxation policy without further authority or appeal. This was not right in view of the failure to observe the promises on which it was elected. Last year there was an increase of revenue amounting to £1,750,000, and the expenditure increased by £1,000,000. This year the proposals in the Budget envisaged over' £2,000,000 increase in taxation and tho refusal to pay large sums that the ratepayers must eventually meet. He contended that this year’s surplus of £500,000 in the Post Office Account might have been paid into tho Revenue Account, and mentioned that in private business, where some departments paid and others did not, all were brought into the General Account in the balance-sheet. He claimed that in times like the present the House should not tolerate a policy of increasing the burden on the producers and the workers while the Post Office-piled up reserves. Mr Jones stated that it would appear that the Treasury had become alarmed at the pace the Government was making in thoughtless expenditure, and ’ had dc-

cided to startle the Government by painting the gloomiest possible picture of the future, and this the Prime Minister had handed on to the people. The alleged three millions delici.t was purely an estimate of the future from the gloomiest standpoint. Balancing the Budget was a desirable object, but it should be balanced on sound, economic lines. It was very apparent that the revenue for the year had been very much under-estimated. The conntry had been expecting a reduction in the price of petrol because of the world’s increased production, but these hopes had now vanished when _ the country was saddled with additional taxation on this item, and there would bo an extra burden passed on to the producer in the whole of the traffic that would go by motor conveyance from farm to rail, and where there were no railways. Mr C. H. Chapman (Wellington North) said there would never be any occasion to speak of the loss on the railways in New Zealand if attempts were made to reimburse the Government for its expenditure and maintenance costs by imposing a charge on the profits obtained by the sale of land, half of which had been greatly increased as a result of the advent of the railway. A reduction of wages or the dismissal of men would not solve the problems at present facing the dominion. The Government could bo congratulated on not having so far suggested a reduction in wages, but it had made the hiistako of discharging men from economic work, and adding them to the total of the unemployed. He urged the Government to adopt a scheme of graduated income tax in preference to other means of raising revenue. Mr H. M. Rushworth (Bay of Islands) said the Budget recognised that the primary products were responsible, for 99 per cent, of this country’s export, and that there had been a decline in their value. He added that it did not seem to be generally realised yet that the exporting primary producers had dropped as much as eight millions in the last six months. Instead of endeavouring to ease the burden on this section of the community the Government was introducing taxation proposals that would add to their difficulties. One felt very uncomfortable indeed for the primary producers, especially those out in the backblooks. With regard to backblock roads, Mr Rushworth said the Budget referred to the provision of a better means of access, but it made no promise of what actually would be done. The debate was interrupted by the rising of the House at 10.30 p.m. till 13.30 p.m. to-morrow.