NATIONAL INTEREST

Evening Star, Issue 21076, 13 April 1932, Page 2

NATIONAL INTEREST

PREMIER'S BRUSH WITH LABOUR SECOND READING OF ADJUSTMENT BILL NO FLOWERY PATH (From Our Parliamentary Repoutbr.] WELLINGTON, April 12. “ From tho objections and protests coming in, this Bill seems to cover pretty well everything,” remarked the Prime Minister when explaining the National Expenditure Adjustment Bill to the House in moving tho second reading. His speech ivas subjected to so much hostile interruption from the Opposition that Mr Speaker stopped the Prime Minister for a moment with a demand for greater decorum. “ I know there may bo a certain amount of fooling over this measure,” remarked Sir Charles Statham, “ but I muse ask members to refrain from interruption unless it is perfectly reasonable.” Ho suggested that if every member interrupted as much as a few had done tho House would bo a babel. Mr Forbes admitted that the Bill was far-reaching and drastic in its operation, but the very fact that the Government had been obliged to intioduco such a measure showed the crisis to bo an extremely serious one. It was calling upon every section of the people to make sacrifices.

11 1 know,” he continued, “ that there will be objections from those who do not take the national view.” Labour members raised a storm of interjection and protest, Mr Jordan ending it with the declaration: 11 What a miserable attack.”

“ 1 do not wish to exclude the Labour Party from the category of those who take a national view,” countered the Prime Minister.

The Leader of the Opposition: Then would it not bo better to make no insinuations?

Mr Forbes proceeded to describe the alternative to stern retrenchment which had been presented by the Opposition during tho General Election. It was, he said, a flowery picture which they portrayed; but the Government, on tho other hand, said it would do its utmost to balance the Budget, maintain financial stability, and declared that it would require every class to assist.

“ We did not wrap it up,” continued Mr Forbes. “We told them clearly and definitely what they would have to do. These two positions were placed before tho electors. On the one hand we had tho flowery path of Labour, and on the other it was the hard and stony path, but it was straight and right (Opposition laughter); and the public of New Zealand preferred the straight and honourable path, and returned the Government to put into operation tho measures necessary to meet) our obligations; and we can say this measure is the minimum in regard to what is required. It is not asking a sacrifice of one shilling more than is absolutely necessary.”

The Prime Minister went on to deal with pensions. Ho said the Bill proposed to make a reduction equal to a little under 10 per cent. Pensions would then be no less valuable than in 1929, becuase more food and necessities could be purchased for an equal amount of money.’ At tho present time no one wished to reduce pensions, but the expenditure in this respect had been growing like a snowball. The whole system would break down unless it was kept within manageable limits. Ho felt sure that pensioners would be relieved to, know that the system was to be kept on a stable basis, and that pensions would still- be paid. Mr Forbes, then dealt with the proposed reductions in interest and rent, which, he said, demonstrated that the Government was endeavouring to act justly in all directions. It was not asking that all tho sacrifices should be made by one section. Ho pointed out that under tho Bill all rents, wdiether weekly, monthly, or annual, would be reduced 20 per cent., so long as they were not brought below an amount that would return 7 per cent, interest on the capital cost. He admitted that under tho existing Rent Restriction Act there was similar provision, but in this case 7 per cent, interest was based on the Government valuation of property. Under the National Adjustment Bill the valuation had to be agreed upon between tenant and landlord in the light of present-day conditions. If they failed to agree the question would be referred to the court. Mr Forbes explained that if -the Government valuation had been fixed a few years ago it would be higher than tho valuation fixed in the light of present conditions.

Replying to an interjection, Mr Forbes said there would be no reduction in the soldiers’ disability pension. Continuing, Mr Forbes said the Minister of Finance was already investigating a number of anomalies to which attention had been drawn, and when the Bill was in committee it was hoped to bo able to eliminate these. In fact, every endeavour would be made to reduce any further anomalies which might crop up. It was hoped that tho hardship clauses would offer a means of overcoming difficulties in many cases. He characterised the Bill as a step towards tho restoration of confidence. It would enable industry to operate with a lessened load as a result of the reduction in fixed charges. Mr W. Nash (Hutt)Could some arrangement be made with insurance companies to reduce premiums? Mr Forbes said he thought insurance companies might find impossible to make some reduction. The programme embodied in the Bill, he said, would cover a period of three years, after which the Government hoped that conditions would have returned to normal, and it would then bo possible to discard all this legislation and permit trade to go on in the ordinary way. The Government looked to the good sense and spirit of tho people to accept the policy laid down. LABOUR ATTACK OPENS. The Loader of tho Opposition (Mill. E. Holland) reiterated his description of the Bill as the most dangerous and reactionary piece of legislation that had ever been placed before Parliament. Tho Prime Minister had referred to the General Election and had said that the electors had given the Government a free hand. Mr Forbes seemed to forget that a free hand had been given on the strength of definite promises, and it was safe to say that 50 per cent, of those who had voted for the Government were sorry now for having given it a free hand. Mr Holland said it was unfortunate that tho Prime Minister had appeared to make a deliberate attempt to antagonise the Opposition. Ho had later in his remarks flung out a suggestion that the policy of the Opposition was not a straightforward and honest policy. ” I would suggest to him,” said Mr Holland, “ that a straightforward, honest

policy would bo 0110 in which pledges to the doctors ore kepi. Ho says that tho policy now being presented is one that has "the endorsement of tho country. 1 wonder if ho will put that to the test by going to tho country. I wonder if ho will put it to tho test by addressing a series of public meetings throughout tho country.'’ Mr Holland challenged tho assertion that wages had the same purchasing power to-day as in 1929. Tho Prime Minister had referred to tho economists., but it had to be pointed out that the opinions of these men were at variance with the opinions of some of the world’s greatest economists. Mr Forbes was going to accept the opinions of minor economists and reduce' the dominion’s purchasing power. “ This Bill will cut down the purchasing power of tho country by several millions per year,’’ said Mr Holland. “ Farmers, manufacturers, warehousemen, and all other business men will find that their trade will go down, and they will have to reduce the number of their employees. In my opinion we shall have at least 100,000 unemployed during the coming winter. What I 'dread is the revolutionary feeling that is being bred by the Government. What happened in Dunedin yesterday is only a faint rumbling of what is growing up throughout the country.” The Labour Party was in favour of rehabilitation and reconstruction upon a definite plan. The Prime Minister had said the Government must restore confidence. The people had lost confidence in the Government, and would not regain it until the purchasing power of the country was restored. The Prime Minister had said he was sure the cost of living would fall, but ho had said that with his tongue in his cheek. He had told the producers that the prices for their produce would rise, and he had told tho workers that the cost of living would go down. Mr Holland declared that tho way to meet the present situation was to impose _ a steady, steeply-graduated system of income taxation. That was the only way to get somewhere near equality of sacrifice.

Referring to the exemptions proposed in the Bill, Mr Holland said that it salary cuts were to bo made everyone should share the burden. The GovernorGeneral should have been included, and so should judges of tho Supreme Court. “ The Government is starting at the bottom to grade up,” he said. “It should start at the top and grade down and stop before it reaches the bottom.” The Leader of tho Opposition proceeded to deal with tho clauses of the Bill relating to reductions in pensions in detail, and said that tho proposals in that respect were most iniquitous. After referring to old age, widows’, and miners’ pensions, ho said that soldiers’ economic pensions were to bo reduced by 29 per cent., while interest paid on war bonds was to bo reduced by only 10 per cent. Tho Minister of Agriculture (Hon C. E. Macmillan) said it must be obvious to anyone that adjustments would have to be"’ made in tho country’s expenditure. The Bill would be a shock-ab-sorber, and would distribute the shocks of falling prices evenly. Costs were too high, and Labour was largely responsible for the high prices. If the Government simply allowed things to slide, he added, the unemployed would starve. ■ Labour Members; They’re doing that now. Mr D. G. Sullivan (Avon) insisted that the Government had no mandate for the legislation embodied in tho Bill. He said it was freely rumoured that there were already a good dozen members of the Government Party who were feeling very uneasy, and had made no secret of their intention to oppose some clauses at least. Ho hoped the number would ■bo increased from twelve to twenty, and that there would be sufficient to join forces with the Labour Party in sending the Coalition Cabinet about its business and replacing it with a Government prepared to provide a satisfactory solution of the country s difficulties. Tho Minister of Lands (the Hon. L. A. Ransom) concurred in the view that the Bill would result in the restoration of confidence. He declared that there was capital available lor investment which would bo brought into as soon as confidence was restored. The reduction in interest rates and rents would go a long way towards a solution of the farmers’ difficulties. At tire present time New Zealand depended too much on primary industries, and they must foster the secondary industries. Labour members also advocated assistance to secondary industries, yet they demanded a steeply graduated income taxation. The Minister asked what would become of the great manufacturing industries if taxation were increased in this manner. He believed that New Zealand was getting out of its difficulties. He gave members an assurance that any constructive suggestion for an improvement of the Bill would be favourably considered by the Government.

Mr H. T. Armstrong (Christchurch East) said he regarded the Bill as a second instalment of tho wage reducing plan. The Government, was reducing Civil servants’ salaries and giving a lead to private employers to make the way clear for the latter. It had deprived the workers of tho right to anneal to the Arbitration Court. Ho did not sec how the effect of the Bill on the business community could be any better than the result of similar legislation last year. The Bill would cause stagnation in every line of business in New Zealand.

Mr H. M. Rushworth (Bay of Islands) said that in line with the manner in which the Government was dealing with the depression the Bill was deplorably inevitable, and he was afraid the measure was the forerunner of many similar Bills. Ho believed the destruction of the sanctity of contracts and the cutting down of monetary supplies to_ all sections of the community must inevitably weaken and finally destroy the whole social order. There was a world-wide glut of all products and not a single industry was working at full time. Ho believed the system was wrong. The problem confronting the world would have to be faced or there would bo a world-wide revolution. If New Zealand bad set herself out to study the currency problem and its related problems a year ago she could have led the world,"but she had lost her chance, and had allowed other countries to get ahead of her.

Mr W. J. Poison (Stratford) said that tlio question of a managed currency was one of the groat problems for Ottawa. New Zealand, however, was not in a position to-day to apply the proposed remedy within the dominion. Export parity controlled the local price or all the dominion’s principal products, and an increase of money would bring about inflation. Mr J. A. Lee (Grey Lynn) said the Prime .Minister had implies) that those who did not agree _ with the Government’s policy were dishonourable. There were two schools- of thought, but the Labour Party did not say that a policy of merciless adjustment was dishonourable, although it involved the repudiation of pledges.

Mr K. S. Williams (Bay of Plenty) recommended the Prime Minister to consider the. advisability of licensing bookmakers. lie thought at a conservative estimate that this would produce revenue amounting to £250,000. Mr C. L. Carr (Timaru) said that the Labour Party bad long ago ad-

vocated a reduction of what it had designated fixed charges—namely, interest and rent. Tito debate was adjourned on the motion of Mr Bitchcncr, and the House rose at 11.45 p.m.